Asset finance boost for small businesses

The transaction is being made under the bank’s ENABLE Funding programme, which aims to increase the supply of funding to smaller businesses in the UK.

The British Business Bank’s commercial arm – British Business Bank Investments – is providing £6.6m of mezzanine funding under its Investment Programme.

The British Business Bank is the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively to encourage growth.

British Business Bank programmes support more than £3.4bn of finance to more than 54,000 smaller businesses and participate in a further £5.1bn finance to small mid-cap businesses.

The latest agreement will allow Shire to grow and diversify its funding base.

The transaction follows on from the £40m block line funding provided by the British Business Bank’s commercial arm in late 2014.

Keith Morgan, CEO of the British Business Bank, said: “Our ENABLE Funding programme is an important part of our support to smaller finance providers as they look to scale up their provision. Helping Shire take the step up from reliance on block funding to being able to access the ENABLE Funding offer is a great example of how we are increasing both the amount and diversity of funding available to smaller businesses.”

Mark Picken, Shire Leasing’s managing director, said the agreement was the latest stage of a developing relationship with the bank.

He said: “When we embarked on our initial match funding relationship with the British Business Bank’s commercial arm in 2014 it was always our intent to access the capital markets. The commercial journey we have made with British Business Bank Investments, and the support we have received from British Business Bank ENABLE team, has helped us realise this strategy.

“This predicted evolution has been an entirely natural one and we are very proud to have trailblazed the path from match funding to ENABLE Funding.”

Picken added that Shire Leasing was the first finance provider to have made such a journey with the British Business Bank group.

He said: “Over the last three years we have all learnt a great deal and I am pleased to say that both our team and theirs have come to trust and respect each other. Trust and respect are vital components for building the solid foundations that will lead to a prosperous future together as we continue to support and develop UK SMEs.”

The ENABLE Funding programme, which has been developed as an aggregation vehicle, allows smaller SME finance providers to expand substantially their provision of finance to smaller businesses.

In order to build the critical mass necessary to refinance the programme’s receivables, the British Business Bank will continue to make similar agreements with other funders. Facilities will typically range from £25m to £150m, and the British Business Bank will aim to refinance these ‘warehouse’ facilities to allow institutional investors access to a large and highly diversified pool of SME debt.