£700m in New Asset Finance. Here's Who Can Access It.
The British Business Bank just backed a £350 million ENABLE Guarantee deal with Allica Bank — and the structure is designed to unlock up to £700 million in asset finance lending for established UK businesses. If your company needs to finance equipment, vehicles, plant or machinery in the next 12 months, this matters.
What Was Announced
On 18 May 2026, the British Business Bank confirmed an ENABLE Guarantee transaction of up to £350 million with Allica Bank — the first ENABLE Guarantee to include a third-party institutional investor alongside the government. Sona Asset Management, a UK-based credit fund, takes the junior position in the deal, while the British Business Bank covers the senior guarantee. Allica retains a portion of the credit risk across each underlying loan.
The mechanics are deliberately clever. By bringing in Sona to absorb the riskier junior tranche, Allica frees up more regulatory capital than a standard guarantee structure would allow — which is why the £350 million guarantee translates to up to £700 million in actual lending capacity.
Michael Strevens, Managing Director at the British Business Bank, said: "This transaction will also help unlock the potential of smaller businesses and stimulate vital growth in nations and regions throughout the UK."
Why Allica for This
Allica isn't an obvious candidate for a government asset finance scheme unless you've been watching its trajectory closely. The bank obtained its licence in 2019, has since lent over £4 billion to UK businesses, and reached unicorn status — a valuation above $1 billion — earlier this year. CEO Richard Davies has built it specifically around relationship banking for established SMEs: businesses with 5–250 employees, typically generating £500k–£30m revenue, that banks either won't serve or service badly.
That profile is precisely who asset finance is most useful for. These are companies buying vehicles for a growing fleet, upgrading CNC machinery for a manufacturing contract, or replacing equipment that's become a bottleneck. Not startups — operational businesses with cashflow, assets, and a clear case for finance.
The ENABLE Guarantee programme exists for exactly this reason: to incentivise institutions to lend to smaller businesses they might otherwise price out or decline. By taking a government-backed guarantee on the senior position, Allica can offer more competitive pricing and approve businesses that might sit just outside its normal risk appetite.
What Asset Finance Actually Does
Asset finance lets a business acquire equipment, vehicles or machinery without paying for it upfront. The asset itself acts as security, which is why rates are typically lower than an unsecured business loan — the lender has a tangible thing to recover if the loan doesn't perform. There are two main structures:
- Hire Purchase (HP): You pay in instalments and own the asset outright at the end of the term. Works well for long-life assets you intend to keep.
- Finance Lease: The lender owns the asset; you use it and pay a monthly rental. Works well for equipment that becomes obsolete quickly, or where you want the option to upgrade at the end of a term.
Asset finance is almost always cheaper on a monthly basis than the equivalent unsecured loan because the security reduces the lender's risk. The question of which structure suits you — secured asset finance, unsecured working capital, or something else — depends on your specific situation: comparing the two is worth doing before you apply.
The Bigger Context
This deal sits inside a wider structural shift in how government-backed lending reaches UK businesses. Challenger banks and non-bank providers now deliver over 62% of government-backed SME loans — up from a fraction of that a decade ago when high street banks dominated the ENABLE Guarantee programme entirely.
The British Business Bank's rationale is consistent: the high street banks have retreated from relationship-intensive SME lending, and government guarantees are more effective when channelled through institutions that actually want to do this kind of business. Allica's geographic spread matters here too — the ENABLE Guarantee is explicitly designed to stimulate lending in UK nations and regions, not just London and the South East.
For established businesses outside major financial centres — a transport company in Yorkshire, a food manufacturer in Wales, a specialist contractor in the East Midlands — this creates a meaningful improvement in access to well-priced asset finance.
What This Means If You're Considering Asset Finance
The £700 million isn't a fund you apply to directly — Allica originates the loans through its normal application process, backed by the guarantee structure behind the scenes. What changes is Allica's lending appetite and pricing: the guarantee absorbs risk that would otherwise push rates up or trigger a decline.
In practical terms: if you've previously been quoted rates on asset finance that felt too high, or been declined by a bank that didn't understand your sector, Allica's expanded capacity is worth a conversation. They're building a track record specifically with the kinds of businesses that high street relationship managers no longer prioritise.
There are also over 300 other active asset finance lenders in the UK market — from specialist vehicle finance houses to equipment leasing divisions within larger banks — each with different sector expertise and risk appetites. Getting quotes across several, rather than going direct to one, is almost always the approach that produces the best terms.
The Finance Brokers arranges asset finance across a panel of 300+ UK lenders, including Allica Bank. If you're looking to finance equipment, vehicles or machinery — or you want to compare asset finance against other working capital options — get in touch for a no-obligation conversation.