Allica Bank has secured GBP 350 million through the British Business Bank's ENABLE Guarantee scheme to expand SME asset finance lending.
Under the arrangement, Sonia Asset Management will act as junior investor, while the British Business Bank holds the senior risk position. The structure materially reduces Allica's capital requirements, increasing the volume of lending the bank can extend relative to the capital it holds.
Scheme design and eligibility
The ENABLE Guarantee scheme is open to all UK-incorporated banks and UK branches of foreign banks, positioning it as a broad-based instrument rather than one targeted exclusively at challenger institutions. Allica Bank is among the first to access funding through the programme.
Allica Bank achieved unicorn status earlier in 2025, reflecting the scale of its growth within the SME lending segment. Challenger banks as a category now account for 60% of total small business lending in the UK, a substantial shift from the market share traditionally held by incumbent lenders.
In addition, the scheme arrives at a point of sustained pressure on SME credit access. Loan approval rates for small businesses have declined to below 50%, compared with 67% in 2018, a trajectory that has drawn attention from policymakers and industry participants alike. Asset finance, covering equipment, vehicles, and machinery, represents a segment where access to capital can directly affect business investment and operational capacity for smaller enterprises.
Through the process of reducing the capital cost of extending loans, the guarantee mechanism is intended to allow participating lenders to increase lending volumes without a proportionate rise in balance sheet risk. For Allica Bank, the arrangement effectively doubles the lending capacity unlocked from the funding secured, with the GBP 350 million guarantee supporting up to GBP 700 million in new SME asset finance.
The British Business Bank operates as a government-owned economic development bank focused on improving finance markets for smaller businesses in the UK. The ENABLE Guarantee scheme sits within its broader set of wholesale finance programmes designed to support lending by banks and alternative providers to the SME segment.
