British Business Bank backs Soho Square SME fund with £50M

What's the deal? The British Business Bank, the UK government's economic development bank, has committed £50m to Soho Square Partnership Capital Fund II, a fund that aims to help scale founder-owned small and mid-sized businesses. It joins as a cornerstone investor, gaining the opportunity to co-invest alongside the fund.

The fund's details: Soho Square CapitalDealroom has a profile for this one. Try Dealroom →, a UK-based partnership capital firm, will lend to companies with EBITDA of up to £15m and turnover of up to £200m. At least 75% of the fund will be invested in the UK.

Targets are established firms making acquisitions, investing in technology, or undergoing succession events in sectors flagged by the government's industrial strategy — digital and technology, plus professional and business services. Soho Square will also advise investee companies, offering support typically found in private equity teams.

Why now? Traditional bank lending is often too rigid for SMEs, while private equity can require heavy dilution or a sale. Soho Square positions its capital as a way for owners to scale and stay in control.

"The bank's backing lets us do more of what we set out to do: give founder-owned businesses the institutional capital they need, on terms that let them stay in control and keep building," said Walid FakhryDealroom has a profile for this one. Try Dealroom →, co-managing partner at Soho Square Capital.

What's the endgame? The bank frames the commitment as filling an underserved niche. "This commitment is directly addressing a gap in the debt market," said Adam Kelly, managing director and co-head of funds at the British Business Bank. "It will unlock flexible capital solutions for established businesses with strong growth potential."

The fund also drew several US institutional investors alongside the state-backed lender.

The signal: The commitment reflects a wider policy push to channel institutional capital into UK growth companies. "This commitment backs dynamic SMEs in key sectors, helping them scale, create jobs and drive growth, to raise living standards across the UK," said Blair McDougall, minister for small business and economic transformation.

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