The British Business Bank has agreed a £100m ENABLE Guarantee transaction with leading fintech Oxbury Bank, the only UK bank with a singular focus on farmers, food production and the rural economy.
This will be one of the first ENABLE transactions whereby the guarantee provides protection to an existing portfolio of lending. This means that the capital benefit of the guarantee is achieved from day one, allowing the lender to originate around £45m of additional lending to SME agricultural businesses.
Oxbury launched as a fully regulated bank in February 2021 offering a range of flexible lending and asset finance solutions tailored to the specific needs of farm businesses. Oxbury combines its own proprietary digital banking platform - OxburyEarth - with a team of dedicated relationship managers providing a wealth of agricultural experience and banking advice for clients.
In less than three years Oxbury bank has exceeded £750m in total committed and in-progress lending. In addition, it has attracted £1bn in savings deposits from farm businesses and consumers wanting to support the rural economy and has reached break-even profitability. The bank has a target to achieve a £1bn balance sheet in 2024.
The Chester-based bank is backed by institutional agriculture and AgTech investors, as well as other stakeholders in the sector. In total Oxbury has raised in excess of £120m in investment since inception with further capital-raising initiatives planned to support ongoing lending growth.
Oxbury’s existing capital stack includes a £25m Tier 2 capital facility from British Business Investments secured in August 2022, which has so far supported over £100m of additional lending to SME farming and food businesses.
By offering tailored funding and data solutions, Oxbury is helping farming and food businesses to make improvements in efficiency and productivity, reduce carbon footprints, produce renewable energy, grow high quality crops and livestock for home consumption and export, as well as helping to diversify income streams.
In September 2022, the bank launched Oxbury NewGen - a new, first-of-its-kind initiative to provide funding for new farming ventures and the advice to give a new generation of farmers the best possible chance of success.
Oxbury also has a committed and embedded approach to Environmental, Social and Corporate Governance issues.
Oxbury’s “Responsible Impact” approach aims to actively help farmers to adapt to the rapid changes in land transformation and food production that are required in the face of the climate change and nature crises.
Tim Coates, Co-Founder and Chief Customer Officer at Oxbury Bank said: “We’re delighted to be expand our relationship with the British Business Bank to support more lending to SMEs across the farming and food system. The ENABLE Guarantee will directly support a further £45m in lending to SMEs and is a further boost to the rapid progress Oxbury has made in becoming the bank of choice for farmers the length and breadth of Britain.
“As the UK’s only dedicated agriculture bank Oxbury is on a mission to help farmers and food producers address the twin challenges of food security and the transition to low-carbon nature-friendly production. Our relationship-led approach, enabled by our proprietary Oxbury Earth Agtech banking platform, is essential in serving the needs of the small and medium business that are the lifeblood of this crucial part of the British economy.”
Reinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank, said: “We’re delighted to have completed this transaction with specialist UK agricultural bank Oxbury. Allowing Oxbury to seed the transaction with existing lending allows them to provide additional lending to small businesses more quickly.”