The UK government is to inject £200m into a state-run scheme designed to provide financing for business amid concerns over a reduction in funding from the EU after Brexit.
The British Business Bank, which works in partnership with other financial institutions to leverage private capital, offers to share the risk of certain losses on a portfolio of new loans made to companies.
The government has faced calls to encourage the publicly owned bank, set up by the Conservative-Liberal Democrat coalition government in 2014, to invest in start-ups and help offset the impact that Brexit will have on funding for the tech sector.
Last year it emerged that the European Investment Fund, a subsidiary of the European Investment Bank that specialises in financing small and medium-sized enterprises, had slashed deals with UK venture capital and private equity groups by more than two-thirds following Britain’s vote to leave the EU.
The UK had previously been the main recipient of EU venture capital funding, which is the single largest source of early-stage capital on the continent. [...]
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