The Federation of Small Businesses (FSB) said that the British Business Bank (BBB) should be prepared to take up the role of the European Investment Bank (EIB) and European Investment Fund (EIF) after Brexit.

In the FSB Brexit report, it was proposed that the BBB should receive extra resources from government to allow it to promote access to finance for SMEs. In June, the EIF, a subsidiary of the EIB, stated that it was considering the future of investing in the UK post-Brexit.

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Mike Cherry, FSB national chairman, said that European investment had been a “crucial lifeline” for SMEs, and urged the government to ensure that SMEs have access to finance.

He said: “Both the EIB and EIF have helped develop commercial expertise and improved access to finance in less economically developed regions of the country.
“If the new administration is serious about developing an Industrial Strategy that promotes growth and productivity in all areas of the country, it must ensure our small businesses have the resources they need to invest, expand and scale-up.”

In its Brexit report, the FSB recommended that the expanded BBB work closely with the Treasury, and recommended the government require all finance providers to publish regional lending data to identify gaps.

The FSB also warned that EU financial passporting must remain in place, and that UK financial services should seek equivalence status after any post-Brexit transitional phase.

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Cherry added: “Without a transitional arrangement that allows European investors to continue supporting our small businesses the UK economy is in for a real shock. It’s incumbent on Brexit negotiators to preserve the ability of small firms to access finance.”