Key Takeaways:
- A £100m ENABLE Guarantee has been agreed upon between the British Business Bank and Oxbury Bank.
- The guarantee will facilitate up to £45m of new loans for SMEs in the farming and food sectors.
- This transaction is among the first to offer immediate capital relief, boosting additional SME lending.
Transaction Announcement:
The British Business Bank has finalized a £100m ENABLE Guarantee with Oxbury Bank, a fintech institution dedicated to the agricultural sector, to enhance lending to small and medium-sized enterprises (SMEs) within the UK’s farming and food production landscapes.
Guarantee Mechanics:
This transaction is pioneering in its approach, applying the guarantee to an existing lending portfolio. This strategic move allows Oxbury to immediately leverage the capital benefits of the guarantee, enabling approximately £45m in new lending for agricultural SMEs.
Oxbury Bank’s Growth:
Since its inception in February 2021, Oxbury Bank has committed over £750m in lending and attracted £1bn in savings deposits, achieving break-even profitability. The bank aims to reach a £1bn balance sheet by 2024.
Investment and Support:
Backed by significant investment and institutional support, Oxbury Bank has raised over £120m since its launch, with additional capital-raising plans to sustain lending growth. This includes a £25m Tier 2 capital facility from British Business Investments, supporting over £100m in SME lending.
Specialized Services:
Oxbury Bank offers custom lending and asset finance solutions, enhanced by its digital platform, OxburyEarth, and the expertise of dedicated relationship managers well-versed in agricultural banking.
Sustainability Initiatives:
Oxbury’s “Responsible Impact” strategy and initiatives like Oxbury NewGen demonstrate its commitment to addressing environmental challenges and supporting a new generation of farmers.
Leadership Commentary:
Tim Coates, Co-Founder and Chief Customer Officer of Oxbury Bank remarked on the expansion of their relationship with the British Business Bank, highlighting the additional £45m in SME lending as a testament to Oxbury’s growth and commitment to the agriculture sector.
British Business Bank’s Statement:
Reinald de Monchy, Managing Director at the British Business Bank, expressed satisfaction with the transaction, emphasizing the quicker provision of additional lending to SMEs as a significant outcome.
The collaboration between the British Business Bank and Oxbury Bank through this ENABLE Guarantee transaction represents a strategic boost for the agricultural sector, promoting growth and innovation while addressing the dual challenges of food security and sustainable production.
Photo by Veronica White on Unsplash
