The government-owned British Business Bank (BBB) is to issue Propel Finance, an independent asset finance provider, with a new line of SME funding.
The facility will allow Propel to provide around £165m of finance to smaller businesses under the BBB’s Enable Funding programme, launched in 2014 to encourage additional lending to smaller businesses.
“Providers of finance to smaller businesses often lack the scale required to access capital markets – a key source of funding for lending institutions – in a cost-efficient manner,” according to a press release.
“The Enable Funding programme warehouses newly-originated finance receivables from different originators – bringing them together into a new structure. Once the structure has sufficient scale, it will refinance a portion of its funding on the capital markets, helping smaller finance providers to tap into institutional investors’ funds,” the BBB said.
In other news, Propel recently completed its first private securitisation, consisting of £275m provided by Citibank and a £35m mezzanine working capital facility provided by Quilam Capital.
Propel, a credit broker and lender for business customers, providers HP, leasing and refinancing support on equipment purchases to around £2m and funds equipment types ranging from telecoms and technology to commercial vehicles and industrial plants.
Reinald de Monchy, managing director, guarantee and wholesale solutions, British Business Bank, said: “Continued funding via Enable, as well as Propel’s first refinancing transaction, will allow them to provide smaller businesses with greater access to a wider range of finance options and help create a more diverse finance market.”
Mark Catton, CEO of Propel, said: “We are an important funding partner of the British Business Bank and are excited by the growth opportunities the new funding lines with Citi and Quilam will provide.”
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