Oxbury Bank secures up to £500m guarantee for farm lending

The British Business Bank, which is wholly owned by HM Government, announced on 24 September 2026 that it had agreed a new ENABLE Guarantee transaction of up to £500m with Oxbury Bank, an agricultural specialist lender. The facility is intended to support agricultural term lending to small and medium-sized farming businesses across England, Scotland and Wales as they invest in their operations, productivity and long-term growth.

The figure is a maximum transaction size, not a cash payment, loan or grant to Oxbury. It describes the scale of a guarantee arrangement under which the British Business Bank guarantees the senior position on a defined portfolio of Oxbury's farm lending, in exchange for a fee. The British Business Bank said the structure and scale make this its largest single-facility exposure to date, though it has not published the method it used to compare exposures across its portfolio.

For UK farming businesses, the practical effect is that Oxbury may have more capacity to lend against agricultural projects than it would carry on its balance sheet alone. It does not mean farms can apply to the scheme directly, and it does not mean the government is endorsing Oxbury's products.

How the guarantee works

Under the ENABLE Guarantees programme, run by British Business Financial Services Ltd on behalf of the relevant Secretary of State, the British Business Bank guarantees part of the losses on an agreed portfolio of a lender's debt-finance facilities. The lender pays a fee for that protection. Under the programme's published general framework, the guarantee applies to an agreed percentage of credit losses above an agreed first-loss threshold, though the specific percentage and threshold for any individual transaction are not routinely published, and Oxbury's are not disclosed here.

The commercial benefit to a participating bank is potential capital relief: because part of the credit risk sits with the guarantor rather than the lender, the arrangement can reduce the regulatory-capital burden associated with the guaranteed loans, which may free up capacity for further lending. This is the general mechanism the programme describes; the British Business Bank has not quantified the capital benefit specific to Oxbury's new transaction.

Farming businesses cannot apply to ENABLE itself. They apply to Oxbury through its normal lending process, and any loan remains subject to Oxbury's own underwriting and to the eligibility rules agreed for the guaranteed portfolio. The guarantee protects the lender's balance sheet; it does not alter a borrower's obligation to repay, and a farming business that takes out a loan still carries the usual risks of business borrowing, including affecting its credit standing if it cannot keep up repayments and, where a loan is secured, the possibility of losing pledged assets.

Who carries the credit risk

The transaction sits across three parties. The British Business Bank guarantees the senior position. Davidson Kempner Capital Management, an investment manager, provides a junior investment. Oxbury itself retains part of the credit risk across each underlying agreement.

The British Business Bank describes this as the second ENABLE Guarantee transaction to combine a bank and a junior investor in this way, though it has not identified the first.

What the announcement does not disclose is more significant for anyone trying to judge the risk-sharing than what it does. There is no published figure for the proportion or amount of losses the senior guarantee covers, no figure for the size of Davidson Kempner's junior commitment or its pricing, and no figure for the share of risk Oxbury itself retains. The order in which losses would be allocated between the three parties, any first-loss threshold, and the transaction's maturity have not been made public. That means a reader cannot currently establish how exposed the public purse is if farm loans in the portfolio default, nor how much skin Oxbury itself keeps in the game beyond the general statement that it retains "part of the credit risk" on every agreement.

What it could mean for farm lending

The British Business Bank said the facility would grow support for farming and rural businesses in England, Scotland and Wales. The announcement does not mention Northern Ireland, and it is not clear from the material available whether that reflects ineligibility, Oxbury's operating footprint, or simple omission.

The arrangement continues a pricing discount for Oxbury lending that meets specified sustainability metrics, with reduced carbon emissions and use of renewable energy given as examples of qualifying measures. The complete criteria and the size of the discount have not been published in the 24 September announcement.

No deployment timetable, target number of borrowers, expected average loan size or projection of how much genuinely additional lending the new facility might generate has been disclosed. A comparable ENABLE transaction with Oxbury, once increased to £300m in February 2025, was said at the time to support around £150m of additional agricultural-sector lending capacity once fully utilised; that ratio should not be assumed to carry across to the new, larger and differently structured transaction.

Oxbury's growing relationship with the British Business Bank

The new transaction follows an earlier, separate ENABLE Guarantee arrangement between the two organisations.

As stated on 24 September 2026, the earlier transaction had by that date facilitated more than £425m of finance for more than 400 small and medium-sized farming businesses. The announcement does not define exactly what "finance facilitated" measures, so it is not possible to say precisely how that compares with the £150m of additional lending capacity cited for the same facility in February 2025; the two figures may describe different things, but the source material does not reconcile them.

The British Business Bank has also invested £35m in Oxbury since 2022 through Tier 2 capital facilities. This is a separate form of support, involving capital investment in Oxbury itself, and is distinct from the ENABLE guarantee arrangements covering Oxbury's lending portfolios.

It is not explicit from the available material whether the new £500m transaction replaces the earlier £300m facility, runs alongside it, or supersedes it in some other way. Readers should not treat the two figures as simply additive without further confirmation from the parties.

Not a government endorsement

Although ENABLE Guarantees are delivered with public financial backing, the British Business Bank states explicitly that the Oxbury transaction is not an endorsement, warranty or recommendation of Oxbury, Davidson Kempner or their products. The programme is a wholesale risk-sharing arrangement between the British Business Bank and participating lenders; it does not amount to the state guaranteeing the safety of a farming business's loan, promising a lending rate, or vouching for the commercial soundness of Oxbury's products.

Oxbury Bank Plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, under Financial Services Register number 834822. The British Business Bank is wholly owned by HM Government, but it and most of its subsidiaries are not banking institutions and are not themselves authorised or regulated by the FCA or PRA. The two organisations sit in different regulatory positions, and the guarantee arrangement does not change Oxbury's regulatory status or the protections that apply to its lending customers.

Across the wider ENABLE Guarantee programme, more than £7.1bn of finance had been provided to more than 15,000 small and medium-sized enterprises between 2017 and March 2026, according to the British Business Bank's own reporting.

What to watch next

The transaction-specific detail that would let a reader properly assess the risk-sharing here, including the guarantee percentage, the size of Davidson Kempner's junior investment, the share of risk Oxbury retains, the first-loss threshold and the guarantee fee, has not been published. Confirmation of whether the new £500m transaction sits alongside or replaces the earlier £300m facility, a deployment timetable for lending under the new transaction, and clarity on the position of farming businesses in Northern Ireland would also sharpen the picture. Farming businesses considering a loan from Oxbury under this or any other facility should rely on Oxbury's own terms and the official British Business Bank programme pages, rather than treating the guarantee as a signal about the merits of any specific product.