Secure Trust Bank receives £20m Tier 2 investment from British Business Investments

Ellie Duncan
07 Mar 2023

Specialist lender Secure Trust Bank has received a £20 million Tier 2 investment from British Business Investments, a commercial subsidiary of the British Business Bank, to help boost its lending capacity.

The new £20 million subscription provided by British Business Investments to Secure Trust Bank’s £90 million Tier 2 note issuance follows a previous £25 million subscription to Secure Trust Bank’s £50 million Tier 2 note issuance in 2018, which has now been repaid.

The funding has been provided through British Business Investments’ Investment Programme, which intends to “increase the supply and diversity of finance for smaller businesses by boosting the lending capacity of challenger banks and non-bank lenders”.

Secure Trust Bank plans to use the funds raised from the Tier 2 issuance to increase its lending volume to small businesses.

David McCreadie, chief executive officer of Secure Trust Bank, said: “Secure Trust has shown sustained commitment to helping UK business through its real estate finance, commercial finance and motor vehicle dealer stock funding financial products.”

At the end of June 2022, the bank’s lending to UK businesses was £1.5 billion of a total customer lending book of £2.8 billion.

“We have demonstrated our capability to capture significant growth opportunities across our diversified specialist lending businesses,” he said.

“We are pleased with the support we have received from British Business Investments and new investors in our new Tier 2 issuance. With this enlarged regulatory capital base we are strongly positioned to continue to help consumers and businesses fulfil their ambitions.”

British Business Investments has committed more than £3.3 billion to providers of finance to UK smaller businesses since its inception in 2014.

Judith Hartley, chief executive officer of British Business Investments, added: “Independent operators like Secure Trust Bank help diversify the UK’s smaller business finance market and provide more choice for businesses.

“Following our earlier subscription in 2018, we are pleased to be working with Secure Trust Bank again to support increased smaller business lending across the UK.”

Recent figures published by the British Business Bank in its Small Business Finance Markets 2022/23 report revealed that challenger and specialist banks now have a 55% share of the market, having lent £35.5 billion to small businesses in 2022.

The amount outpaced that lent by the incumbent banks to UK SMEs last year.