The UK Budget on 28 Oct 2026 allocated £450m of capacity to the British Business Bank to establish a new venture debt product for innovative firms.
According to the Bank, the product is intended to help fill a gap in the UK financing landscape for innovative scale-ups, where venture debt has historically focused on smaller ticket sizes. It will support high-growth companies in Industrial Strategy sectors, including defence and dual-use technologies, seeking growth finance without giving up equity. The Bank will work with commercial lenders to unlock facilities for these companies. The Budget document describes the allocation as "providing non-dilutive finance to innovative firms".
The Bank has not said when the product will launch, what ticket sizes or pricing it will offer, which commercial lenders it will work with, or how the product will be structured.
It estimates the venture debt product will create 500 jobs and support 1,200 existing jobs over the lifetime of the finance.
David Hourican, interim chief executive of the British Business Bank, said of the wider package, "This increased capacity will help more ambitious businesses start, scale and stay in the UK, driving economic growth and creating jobs across the country."
The £450m forms part of a wider £5bn uplift to the Bank’s financial capacity. The same package includes £1.4bn of additional capacity to invest in equity funds, a £165m expansion of Community ENABLE Funding for community development finance institutions, and delivery of the £6.5bn Growth Guarantee Scheme expansion announced at Mansion House.
Separately, the Budget confirms that the National Wealth Fund and the Bank will deploy up to £5bn of investment and lending over the next four years into defence, dual-use and other sectors supporting national security. It also launches an Innovative Defence Financing Taskforce.