Small loans of £25,000 to £100,000 from the British Business Bank's £1.6bn Nations and Regions Investment Funds were running at 66% of their deployment target, and were behind target in every area that offers them, according to an independent evaluation the Bank published on 13 October 2026.
The early assessment, carried out by research company SQW, covers activity up to the end of September 2025. It found the programme as a whole was on target, but with wide differences by type of finance and by area. Equity investment was at 110% of target and larger debt deals at 100%.
Where the money has gone
By the end of September 2025, the Bank had committed £1.1bn to 16 fund managers across six areas, and £294m had been invested. That is 26% of the committed funds. The money went into 951 investments in 877 businesses, alongside £233m of private sector investment, or 79p for every £1 from the funds.
The pace varied sharply between areas. The Investment Fund for Northern Ireland had deployed 45% of its funding, the highest proportion. The Investment Fund for Wales had deployed 20% and the Midlands Engine Investment Fund II 18%, the lowest.
Northern Ireland and the North of England were ahead of target. The South West was slightly behind, and Scotland, Wales and the Midlands were further behind.
Why small loans lagged
The report says the Midlands came close to its small loans target, while every other area was considerably behind. It gives a mix of reasons. Some fund managers were new to their area or had staffing problems, and awareness of the funds was low in Wales, the South West and Scotland.
On the demand side, the report cites low levels of financial readiness and a reluctance to take on debt in Scotland and the South West, and high existing borrowing and low confidence in the North. The funds' own quarterly reports point to US trade tariffs, higher taxes on business and rising employment costs leading smaller firms to pause investment plans.
Rejections vary by nation
Fund managers declined 372 applications and 359 were withdrawn. In Northern Ireland, 8% of applications were rejected or withdrawn, against 52% in Wales. A third of small loan applications (33%) were declined, compared with 52% of debt applications and 46% of equity applications.
Of the businesses surveyed, 81% said they would either not have secured finance without the funds or would have got less, or got it more slowly.
Adam Kelly, Managing Director of Debt & Regional Funds at the British Business Bank, said: "While it remains early in the programme's lifetime, it is encouraging to see strong evidence that the fund is supporting businesses that may otherwise have struggled to secure finance and helping to create the conditions for long-term economic growth."
The Bank said that by July 2026 the funds had invested more than £465m in 1,254 businesses, with a further £417m of private investment.
About the evaluation
SQW used the Bank's monitoring data, around 80 interviews, an e-survey with 84 responses and a telephone survey of around 170 businesses that received finance, a 32% response rate. The report notes that much of the evidence is self-reported. Value for money will be assessed in an interim evaluation in 2027/28.
Key facts
- Small loans (£25,000 to £100,000) at 66% of deployment target; equity 110%; debt 100%
- £294m invested by September 2025, 26% of £1.1bn committed
- Northern Ireland deployed 45% of its funds; Wales 20%; Midlands 18%
- 8% of applications rejected or withdrawn in Northern Ireland, 52% in Wales
- £465m invested in 1,254 businesses by July 2026, the Bank says
Source: British Business Bank, Evaluation of the Nations and Regions Investment Funds: Early Assessment (SQW), published 13 October 2026 (british-business-bank.co.uk). See also: Funding, Data & Surveys and how to send us your news.