British Business Bank Boosts Funding for Compass Finance to £45m

Key Points

• British Business Bank has raised its loan facility with Compass Business Finance in Kent to as high as £45 million.
• The new facility represents a fresh £15 million investment, which was increased to £30 million in 2022.
• This is the third rise in the facility since a partnership was established between the two organisations six years ago, and one that has been progressively strengthening.
• The money comes from the British Business Bank’s Investment Programme, which aims to help create more competition and fund supply for small businesses that are not served by it.
• The deal will enhance the availability of funds for smaller companies nationwide, said Michael Strevens, Managing Director, Structured Financial Institutions Solutions at the British Business Bank.
• Mark Nelson, co-founder and director of Compass Business Finance, stated that the facility will enable the lender to serve SMEs across the UK better.
• With head office in Tonbridge, Kent, Compass was established in 2005 and offers finance leases, hire purchase and business loans to the smaller businesses of the UK.
• Compass is also a member of the government-backed Growth Guarantee Scheme by the British Business Bank, which guarantees loans given to eligible smaller companies.
• The bigger operation will also enable Compass to expand its portfolio and provide loans to more SMEs for equipment and technology.

Kent (Britain Today News) September 01, 2026 – The British Business Bank has extended its debt facility with Compass Business Finance to up to £45 million, in a move designed to strengthen the Kent-based lender’s ability to support small and medium-sized enterprises (SMEs) across the United Kingdom. The increased facility, confirmed on Tuesday, September 1, 2026, builds on an initial £15 million commitment made in 2020, which was subsequently raised to £30 million in 2022, marking the third expansion of the partnership in six years.

The latest agreement is delivered through the British Business Bank’s Investment Programme, a scheme created to increase competition in the smaller business lending market and widen the supply of finance to firms that may otherwise struggle to access mainstream funding. Compass, which is an independent asset finance funder and broker, is expected to use the expanded facility to grow its loan book and extend support to a larger number of smaller UK businesses investing in equipment, machinery and technology.

What Has the British Business Bank Agreed With Compass Business Finance?

The core of the announcement centres on a debt facility increase from £30 million to £45 million between the state-owned British Business Bank and Compass Business Finance. The facility is not a one-off grant but a revolving line of credit that Compass draws upon to fund onward lending to its own SME customers. This structure means the British Business Bank does not lend directly to small businesses in this instance; instead, it channels capital through an established, accredited intermediary that already has relationships with thousands of smaller firms across the country.

The deal was formally completed as part of the British Business Bank’s ongoing efforts to widen access to finance for businesses that are often overlooked by traditional high-street banks, particularly those seeking asset-based finance for equipment purchases.

Who Is Compass Business Finance?

Compass Business Finance is an independent finance company headquartered at Compass House, Medway Wharf Road, in Tonbridge, Kent. The company was incorporated on 8 December 2005 and has spent nearly two decades building a reputation as a relationship-focused lender and broker rather than a purely transactional one.

Compass provides a range of products including finance leases, hire purchase agreements and business loans, with a particular focus on asset-based finance for sectors such as print, packaging, engineering and renewables. The firm describes itself as taking a relational rather than transactional approach to business, aiming to guide clients through financial decision-making with tailored support rather than off-the-shelf products.

Over the years, Compass has worked with the British Business Bank on a succession of government-backed schemes, including the Regional Growth Fund, the Enterprise Finance Guarantee programme, the Coronavirus Business Interruption Loan Scheme, the Recovery Loan Scheme and, most recently, the Growth Guarantee Scheme.

How Big Is Compass Business Finance’s Reach?

The lender has backed thousands of companies across the UK investing in equipment and technology, according to information published by the British Business Bank. Its client base spans a range of sectors including construction, engineering, and print and packaging, with the firm positioning itself as a specialist funder for smaller businesses that need flexible, sector-aware lending solutions.

How Has the Compass Facility Grown Since 2020?

The £45 million facility represents the third increase in the relationship between the British Business Bank and Compass Business Finance since the partnership began.

• 2020: An initial £15 million commitment was agreed, providing Compass with its first significant funding line from the British Business Bank.
• 2022: The facility was increased to £30 million, doubling the original commitment as Compass expanded its lending operations.
• 2026: The facility has now been raised again, this time to up to £45 million, representing a further 50 per cent increase on the 2022 figure.

This pattern of steady, incremental increases suggests a long-term, deepening relationship between the two organisations, rather than a single opportunistic transaction. Each increase has coincided with periods of growth for Compass as it has sought to scale its lending book to meet demand from smaller UK businesses.

What Is the British Business Bank’s Investment Programme?

The facility has been delivered through the British Business Bank’s Investment Programme, a scheme specifically designed to increase competition and improve the supply of finance available to underserved smaller businesses across the UK. Rather than lending directly to SMEs, the British Business Bank works through accredited partners such as Compass, using its balance sheet to support lenders that in turn provide finance to smaller firms that may struggle to secure funding through conventional high-street banking channels.

This model allows the British Business Bank to extend its reach into regional and sector-specific markets without having to build direct relationships with every smaller business in the country. By backing established, specialist lenders like Compass, the Bank aims to ensure that businesses in all parts of the UK, not just those clustered around major financial centres, have access to the finance they need.

What Did Michael Strevens Say About the Deal?

Michael Strevens, Managing Director for Structured Financial Institutions Solutions at the British Business Bank, commented on the significance of the transaction. He said:

“Completing this transaction with Compass Business Finance represents an important step in strengthening the flow of finance to smaller businesses across the country.”

He added that the partnership carries wider implications for business resilience, stating:

“This partnership will support more businesses to invest, grow and build resilience.”

Mr Strevens went on to explain the broader regional and economic ambitions behind the facility, saying:

“Through this, we can ensure that smaller firms across all regions have access to the finance they need to drive productivity and contribute to a thriving local economy.”

What Did Mark Nelson Say About the Facility?

Mark Nelson, co-founder and director at Compass Business Finance, also issued a statement welcoming the increased facility. He said:

“We are delighted to further strengthen our relationship with the British Business Bank.”

Discussing the practical impact of the new funding, Mr Nelson added:

“This is a significant facility that will increase our ability to support SMEs across the UK, enabling more businesses to access the funding they need to invest, grow and achieve their ambitions.”

He also framed the facility within the context of Compass’s own growth trajectory, noting:

“It is an important step in supporting our continued growth while maintaining the service and flexibility our customers value.”

How Will Compass Use the £45 Million Facility?

According to the details of the announcement, the larger facility is expected to allow Compass to grow its loan book and extend finance to a greater number of small and medium-sized businesses. Given the lender’s specialism in asset-based finance, much of the additional lending capacity is likely to flow towards businesses seeking to invest in machinery, equipment and technology upgrades, particularly within sectors such as engineering, manufacturing, print and packaging, where Compass has an established track record.

The increased headroom also gives Compass greater flexibility to respond to demand fluctuations, allowing the firm to take on new lending commitments without needing to renegotiate its facility with the British Business Bank in the short term.

What Is the Growth Guarantee Scheme and How Does Compass Use It?

Alongside the new debt facility, Compass Business Finance also participates in the British Business Bank’s Growth Guarantee Scheme (GGS). Under this scheme, the government provides a 70 per cent guarantee to lenders against the outstanding balance of a facility once the lender has completed its normal recovery process, although the borrower always remains 100 per cent liable for the debt itself.

The scheme is open to smaller businesses with a turnover of up to £45 million on a group basis, and finance can be used for a wide range of legitimate business purposes, including managing cash flow and funding investment. Term loans and asset finance products under the scheme are typically available with repayment periods ranging from three months up to six years, while overdrafts and invoice finance facilities tend to run for shorter terms.

By combining its enlarged British Business Bank facility with its participation in the Growth Guarantee Scheme, Compass is positioned to offer a broader suite of funding options to smaller UK businesses, spanning both unguaranteed commercial lending and government-backed products.

Why Does the Growth Guarantee Scheme Matter for Smaller Lenders Like Compass?

For specialist lenders such as Compass, participation in government-backed schemes like the GGS can help de-risk lending to smaller, less-established businesses that might otherwise be considered too high-risk for purely commercial facilities. This, in turn, can widen the pool of businesses that Compass is able to support, particularly those without extensive trading histories or substantial collateral.
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Why Does This Deal Matter for UK SMEs?

Access to finance remains one of the most persistent challenges facing smaller UK businesses, particularly those outside major financial hubs or operating in specialist sectors that require asset-based funding solutions. By channelling capital through an established regional lender like Compass, the British Business Bank aims to reach businesses that might otherwise find it difficult to secure funding through mainstream high-street banking routes.

The steady escalation of the facility, from £15 million in 2020 to £45 million in 2026, also signals sustained confidence from the British Business Bank in Compass’s lending model and its ability to deploy capital responsibly to viable smaller businesses across the UK.

What Does This Mean for the Future of SME Lending in Britain?

The increased facility fits within a wider pattern of state-backed investment aimed at addressing gaps in the UK’s smaller business lending market. As traditional banks have, in some cases, scaled back their appetite for lending to smaller and specialist businesses, institutions like the British Business Bank have increasingly stepped in to work alongside independent lenders and brokers to keep capital flowing.

For Compass Business Finance, the enlarged facility represents both a vote of confidence and a practical tool to scale its operations further, while for the wider UK SME sector, it represents one more channel through which smaller businesses can access the funding needed to invest, grow and build long-term resilience.