Specialist commercial lender DF Capital has secured an initial £175m in SME funding under the British Business Bank’s (BBB) ENABLE Guarantee programme, the lender said in a statement.
Under the ENABLE Guarantee programme, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.
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The Guarantee will enable Manchester-based DF Capital to provide up to £225m of additional inventory finance annually through its commercial floorplan and unit stocking solutions for UK SME dealer and manufacturing businesses.
“This is the first time the ENABLE Guarantee programme has supported inventory finance. This specialist form of lending is critical to supply chains, supports the availability of working capital and improves cashflow across product distribution cycles,” the statement said.
DF Capital received its banking licence in September 2020. One of the objectives of the BBB is to increase the diversity of supply and type of finance available to smaller businesses. In supporting new market entrants in this way, the Bank can help rapidly build the number of businesses supported and provide more choices across the market.
The Guarantee commitment may be increased to £350m, which would support additional finance of around £450m annually.
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By GlobalDataReinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank, said: “Supporting lenders in providing finance for smaller businesses is key for us at the British Business Bank. This is a significant facility and has the capacity to generate growth for dealerships and manufacturers across the UK as well as providing greater choice of finance for smaller businesses.”
Carl D’Ammassa, Chief Executive Officer, DF Capital said: “We are delighted to have worked closely with the British Business Bank to utilise an ENABLE Guarantee for inventory finance for the first time. This sizeable facility gives us a runway to grow our lending and support more manufacturers and dealers in the years ahead. This has been an important milestone in our capital strategy, giving us increased capacity to scale the bank.”
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