British Business Bank backs Beach Point SME fund with £59m

The British Business Bank has committed up to £59 million to Beach Point Capital UK's new small business lending fund, forming the cornerstone of a £65.7 million first close.

The fund, BPC Europe SME DAC, is the fourth in Beach Point's UK and Ireland small and medium-sized enterprise direct lending strategy. It will target businesses with annual turnover of less than £25 million, offering loans of £500,000 to £10 million.

The commitment adds to earlier backing from the state-owned development bank, which invested £20 million in 2022 and £30 million in 2025 in Beach Point's first dedicated UK SME lending fund. With the new allocation, the British Business Bank's total potential commitment to Beach Point is expected to exceed £100 million.

The new fund will provide senior debt to smaller businesses seeking finance for investment, expansion, acquisitions and hiring. It will invest across the UK and Ireland, focusing on growth-oriented companies.

Beach Point's previous UK SME lending fund has already invested in 26 businesses across all UK nations and regions. The British Business Bank said that vehicle placed particular emphasis on Northern Ireland, Scotland and the North of England, where smaller companies can face tighter financing conditions than those in London and the South East.

The move reflects a broader policy effort to channel more capital to smaller businesses outside the UK's main financial centres. Access to non-bank lending has become an increasingly important part of the funding mix for SMEs, especially for companies seeking to raise capital without giving up equity.

Business Secretary Jonathan Reynolds said the latest backing should help spread finance more evenly across the country.

"Small businesses are at the heart of our communities, creating jobs and driving growth. This new funding will help more of them access the finance they need to grow, particularly in areas like Northern Ireland, Scotland and the North of England.

"Our mission is to deliver growth in every postcode, and we want every business, wherever they are based, to have the tools they need to succeed."

Regional focus

The British Business Bank was set up to improve access to finance for smaller companies and attract private investment alongside public money. In its latest annual figures, it said it supported £9.4 billion of finance for UK smaller businesses in 2025/26, including £1.3 billion of public funding, £4.3 billion of private capital and £3.7 billion of guaranteed lending.

That funding reached 38,000 UK businesses, including about 30,000 the Bank had not previously helped to finance. The latest Beach Point commitment sits within that wider mandate to expand lending options for smaller firms across the country.

Adam Kelly, Managing Director and Co-Head of Funds at the British Business Bank, said the partnership with Beach Point had already delivered lending nationwide and would now be expanded through the new vehicle.

"By building further on our strong partnership with Beach Point Capital, this new fund will provide much-needed growth capital to smaller businesses across the UK's nations and regions, particularly in areas where access to finance can be more limited. By providing ambitious companies with the flexible finance they need to invest, expand and create jobs, we can help unlock local economic potential and support growth in communities across the UK."

Debt market

The fund is sector-agnostic, though it is expected to continue Beach Point's past lending pattern in digital and technology businesses, as well as financial services companies. The lender focuses on profitable businesses or those on a clear path to profitability, according to background information provided by the firms.

For founders and owner-managed businesses, debt funding can offer a way to finance growth while retaining control. That route has drawn more interest as some companies seek alternatives to venture capital and private equity, particularly in a higher-rate environment where funding choices have become more selective.

Beach Point Capital UK is part of Beach Point Capital Management, a global credit-focused investment manager with more than $20 billion in assets under management. Its UK unit specialises in non-dilutive finance for smaller businesses in the UK and Ireland.

Shane Lanigan, Portfolio Manager and Head of European Lending Solutions at Beach Point Capital UK, said: "We are delighted with the British Business Bank's continued support and its recognition of the important stimulus our strategy can bring to local and regional growth. The challenge is not simply to generate growth, but sustainable, productive and broadly distributed growth.

"Viable SMEs with the ambition and capacity to scale are exceptionally important to that process. By providing flexible capital at critical points in their development, we can help businesses invest, expand and create employment in the communities in which they operate."