LDF and the British Business Bank agree £51 million facility to increase asset finance for small businesses
- Transaction is second of British Business Bank’s new ENABLE Funding programme
- The European Investment Fund will guarantee 50% of the facility
The British Business Bank is pleased to announce that it has agreed to provide a £51m facility to LDF, a non-bank finance provider, to fund a portfolio of newly originated small business asset finance receivables.
The transaction, which is 50% guaranteed by the European Investment Fund, is the second of the British Business Bank’s ENABLE Funding programme, which aims to increase significantly the supply of leasing and asset finance to smaller businesses in the UK. It follows a £100m facility provided to Hitachi Capital (UK) Limited in October 2015.
Peter Alderson, Managing Director, LDF, said:
“LDF are delighted to be working with the British Business Bank on this exciting initiative. Access to finance, particularly for asset procurement, remains a critical barrier to success for many smaller businesses and making this more readily available is something that we are fully behind.
“We already deliver significant support to this sector, providing over £40m of finance in January alone. With strong ongoing support from our shareholder, Cabot Square Capital, and our recent acquisition of asset finance specialist, First Independent Finance (FIF), we have very ambitious plans for growing our presence in the SME market.
The combination of LDF’s scale and stature, teamed with the strong asset finance heritage of FIF, increases both our geographical presence and our potential client base. With 5000+ clients, our special expertise lies in finance for professional firms and corporate SMEs. We believe that this facility will enable us to further grow that base and also provide a higher level of support, to a significant proportion of that client base.”
Reinald de Monchy, Managing Director, Wholesale Solutions at the British Business Bank, said:
“This second transaction in the ENABLE Funding programme will further boost the availability of asset finance for businesses across the UK. We are particularly pleased to be able to be working with LDF, which is a high-growth lender, to help it expand its funding programme, which has already supported so many businesses across the UK.
“We now have provided two facilities totalling £151 million and we anticipate further transactions throughout 2016. Our intention remains for these facilities to be refinanced through the capital markets once we achieve a required critical mass of circa £300 million or more.”
Pier Luigi Gilibert, EIF Chief Executive, said:
“We are delighted to be partnering with the British Business Bank again and to be guaranteeing this innovative finance facility for the benefit of SMEs. Through the ENABLE Funding programme we can help UK non-bank finance providers to offer additional financing solutions for SMEs and small MidCaps. This EIF guarantee now brings the total finance available under this programme to over £150 million which is a substantial boost for UK entrepreneurs. We are very pleased to support both the British Business Bank and LDF in their financing campaign for businesses.”
The ENABLE Funding programme, which has been developed as an aggregation vehicle, will allow LDF to expand substantially its provision of asset finance to smaller businesses.
In order to build the critical mass necessary to refinance the assets, the programme will be announcing similar agreements with other funders during 2016. Facilities will range from around £25m to £150m, and the programme will aim to refinance the warehouse facilities when receivables total approximately £300m or more. This refinancing will allow institutional investors access to a large and highly diversified pool of SME debt.
For more information please contact:
British Business Bank
Scott Shearer, Scott.Shearer@british-business-bank.co.uk
Nick Taylor, Nick.Taylor@wearesevenhills.com
0207 199 2200
Natalie Powell, Natalie.Powell@ldf.co.uk
01244 527 300
European Investment Fund
David Yormesor firstname.lastname@example.org
+352 24 85 88 346
Notes to editors
About ENABLE Funding
The ENABLE Funding programme seeks to incentivise the provision of finance to viable UK companies by providing funding for smaller bank and non-bank providers of asset finance, many of which are unable to access cost-efficient funding from the capital markets. The ENABLE Funding programme is delivered by British Business Bank Financial Services Limited on behalf of the Department for Business, Innovation and Skills.
About the British Business Bank
The British Business Bank makes finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity. Its objectives are to:
- increase the supply of finance available to smaller businesses where markets don’t work well
- create a more diverse and vibrant finance market for smaller businesses, with a greater choice of options and providers
- build confidence in the market by increasing smaller businesses’ understanding of the options available to them
- achieve this whilst managing taxpayer resources efficiently and within a robust risk management framework.
British Business Bank plc is a development bank wholly owned by HM Government. The British Business Bank operates through a number of subsidiaries, including British Business Financial Services Limited. Neither British Business Bank plc nor British Business Financial Services Limited is authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. More information can be found at www.british-business-bank.co.uk
The LDF Group, owned by Cabot Square Capital LLP, consists of LDF Operations Limited and First Independent Finance Limited. Collectively the group are the UKs leading independent provider of SME finance solutions. This year LDF celebrate 30 years in business and continues to deliver innovative financial options designed to assist businesses to spread the cost of asset purchase and business expenditure. LDF remain focussed on delivering improved access to finance across an expansive lease and loan portfolio and plan to provide over £400million of finance to UK small to medium sized businesses in 2016.
About Cabot Square Capital LLP
Cabot Square Capital specialises in investing in, building and growing businesses within the financial services and operating property sectors. Over the last 20 years, the firm has helped build over 25 companies, with a particular focus in developing platforms to provide finance to the SME and consumer sectors. Cabot presently has circa £800m under management and is currently investing its fifth institutional fund.
About the European Investment Fund
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 8.8bn at end 2014.
With investments in over 500 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6bn in over 350 operations at end 2014, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.