Big businesses can tap the stock market for money. Small businesses can scrape by on their overdrafts. Between the two, a gap yawns. It needs bridging.
It was first spotted some 80 years ago, when the economy was, as now, in a deep hole, and the government, as governments do, responded by setting up a committee of inquiry, to be chaired by a judge. This was Lord Macmillan, who wisely let John Maynard Keynes draft most of his report, but gave his name to its most important finding: the Macmillan gap.
Better still — though only after a long pause for thought — the bridge-builders were set to work. The Bank of England rounded up the High Street banks, and together they funded a new entity, soberly called the Industrial and Commercial Finance Corporation. Its customers were the middle-size businesses caught in the gap. Typically, ICFC would put capital into them, or lend to them, or, probably, do both.
With offices up and down the country, ICFC knew its markets and was no soft touch. It could not afford to be. Its disciplines were salutary. It was respected and effective, but over time it lost its distinctive purpose. A process of merger and rebranding saw it disappear into 3i: not a typographical error, but some badge engineer's bright idea. The banks took their money out. These days 3i is a venture capital company with more than its fair share of misadventures.