British Business Investments has announced an initial £20m funding facility to speciality lender, Sprk Capital.

The facility will allow Sprk to provide capital to smaller businesses in the UK engaged in innovation.

British Business Investments, a wholly owned commercial subsidiary of the British Business Bank, aims to improve access to alternative finance for smaller businesses across the UK, while supporting the transition to a net zero economy.

Since it was established in 2014, British Business Investments has committed more than £3.8bn to providers of finance to UK smaller businesses.

Since it launched in 2021, Sprk has provided funding to innovation projects totalling over £150m. Although the firm has a sector agnostic lending strategy, 80% of its loans to date broadly represent the UK innovation market, with lending focused on the manufacturing, IT, and the professional scientific and technical sectors.

Managing Director at British Business Investments, Adam Kelly, said: “This £20m funding facility will enable Sprk to back UK smaller businesses in the innovation sector, providing them with cashflow solutions at critical points in their journey.

“We look forward to working with Sprk to help innovative smaller businesses across the UK to access the capital they need to scale up and become successful, high growth companies.”

Sprk has become the first lender focused on the innovation lending sector to receive funding from British Business Investments.

The firm’s CEO, Dominick Peasley, added: “Today’s announcement demonstrates the commitment of British Business Investments to provide funding to SMEs that are critical to advancing UK-led innovation.

“The funding provided also enables us to work even closer with UK Research & Innovation through Innovate UK to provide additional capital to grant projects, accelerating UK-led innovation further.”