Oxbury Bank the UK’s first and only AgTech bank – has secured £25m in Tier 2 capital funding, with the investment made by British Business Investments, a wholly-owned commercial subsidiary of the British Business Bank.
British Business Investments aims to increase the supply and diversity of finance for smaller businesses across the UK by boosting the lending capacity of challenger banks and non-bank lenders. Since it was established in 2014, British Business Investments has committed over £3bn to providers of finance to UK smaller businesses.
The new funding will support Oxbury’s forecast growth in lending across the British farm and food sector, as farmers look for more flexible finance to support their sector as they address the challenges of on-going security of the UK’s food supply and also the transition to long-term sustainable supply.
Break even by end of 2022
Oxbury’s strong performance since launch means it is forecast to break even by the end of 2022. This Tier 2 Capital facility from British Business Investments will enable Oxbury Bank to support additional lending of £250m to small and medium British businesses across the remainder of 2022 and through 2023.
The new funding follows on from a further £20 million in new Core Tier 1 equity raised in July from new and existing investors, with total capital raised and secured by Oxbury Bank having now reached £93 million.
Oxbury has been lending to SMEs in the rural economy since March 2021. In its first 16 months the bank’s strong performance has underlined the strong demand for a true alternative to the incumbent banks in the farming and food sector:
- Converting an initial £650m of business since launch
- Targeting £1 billion in lending to farming, food businesses SMEs and the rural economy by 2024
Tim Coates, co-founder and chief customer officer at Oxbury Bank said: “This important investment from British Business Investments is another exciting milestone in Oxbury’s development. Additional funding from British Business Investments will help accelerate Oxbury’s support for the rural economy and help farmers and food producers addresses the twin challenges of food security and the transition to low-carbon nature-friendly production.
“Oxbury’s relationship-led approach, enabled by our proprietary Oxbury Earth Agtech banking platform, is essential in serving the needs of the small and medium business that are the lifeblood of this crucial part of the British economy.”
Judith Hartley, CEO at British Business Investments said: “This £25m Tier 2 commitment to Oxbury Bank supports British Business Investments’ mission to increase the diversity and supply of finance for smaller businesses in the UK. Specialist banks like Oxbury help diversify the UK’s smaller business finance market and, in turn, help smaller businesses across the UK to access the finance they need. This commitment to Oxbury will help unlock up to £250m of additional finance for smaller businesses across the British farm and food sector, helping them to grow and succeed.”