Earlier this year, Lenvi supported ThinCats, one of the UK’s leading SME finance providers, to deliver standby servicing to their latest funding facility. The facility with Citi and Barclays Bank PLC supports lending of up to £696m for mid-sized smaller businesses in the UK. The facility was guaranteed by the British Business Bank’s ENABLE Guarantee programme.
The Bank’s ENABLE Guarantee programme was launched with a clear mission: to enhance the availability of finance for smaller businesses by encouraging banks and non-bank financial institutions to expand their lending capabilities. By reducing the capital or junior funding required, the programme makes it easier for these institutions to support SMEs.
A subsequently launched programme, ENABLE Build, uses a similar mechanism to support lenders supplying finance to smaller developers in the housebuilding sector.
Despite their significant potential, these ENABLE programmes remain two of the lesser-known government-backed support schemes. In this article, we provide a refresh on the programmes and explore the opportunities they offer to lenders who may not yet realise how they can benefit from these impactful schemes.
What are the two programmes?
ENABLE Guarantees:
Suitable for: Banks and larger non-bank financial institutions that already have SME lending portfolios, including asset-based finance providers.
Purpose: ENABLE Guarantees is designed to reduce the risk of lending by providing partial guarantees on portfolios of SME loans. It is particularly suitable for institutions looking to expand their lending to SMEs, including those that might be considered higher risk. To be eligible, lenders must contribute materially to the UK economy and meet specific criteria regarding SME lending.
Benefit: By mitigating risk, lenders can broaden their customer base and offer loans to a wider range of SMEs, including those with less traditional profiles.
ENABLE Build:
Suitable For: Lenders that serve smaller housebuilders and property developers.
Purpose: ENABLE Build specifically targets the property development sector, helping smaller developers access finance who often struggle to compete with larger firms.
Benefit: ENABLE Build supports the construction of new homes and developments by easing the financing process for smaller developers, thereby contributing to housing supply and local economic growth.
For further information visit the British Business Bank website.
ENABLE programme performance to date
The British Business Bank has provided substantial support under each of the areas of the programme over the last decade. As of March 2024, the ENABLE Guarantee and ENABLE Build programmes had completed 17 transactions, committing approximately £2.95bn of commitments to smaller finance providers, including £771m committed in the 23/24 financial year.
Opportunities for the future
Despite the programmes’ maturity, the breadth and depth they offer against a range of asset classes and funding opportunities is not widely understood, including bridging and development support and SME lending, among others. The support that they provide can open funding avenues to lenders that they wouldn’t have previously considered and that businesses may not have realised they could access.
As an experienced supplier of standby services to lenders utilising British Business Bank’s programmes, we have seen first-hand the benefits that the programme can have on lending capacity for our client.
Owain Chambers, Senior Business Development Manager – Capital Markets for Lenvi, comments: “The ENABLE Guarantee programme presents an excellent opportunity for the investment community to fund a diverse range of asset classes. It offers both assurances and new opportunities for emerging market lenders as well as established players. We thoroughly enjoyed working with the British Business Bank on this transaction and look forward to more as lenders increasingly recognise the programme’s potential.”
Michael Strevens, Head of Structured Guarantees, British Business Bank, adds: “We are encouraged to see the continued expansion of the ENABLE Guarantee and Build programmes. They provide crucial support to lenders and by extension smaller businesses, which are vitally important to the UK economy. Experienced backup service providers such as Lenvi play a valuable role in giving us additional confidence in these transactions.”
