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British Business Bank’s Investment Arm Provides £18m Funding To North West Asset Backed Lender, In Search Of Yield For Tax Payer

The commercial arm of the British Business Bank, British Business Bank Investments Ltd. has announced that it has made an £18m pound investment into Praetura Asset Finance, a provider of asset-based finance to sole traders, partnerships and limited companies, based in the Northwest of England.

The BBB says it will support at least £36m of smaller business finance by providing £15m of matched funding, plus an additional £3m of expansion capita – the first time it has combined both matched and unmatched funding in the same deal.

Praetura provides asset-based finance, hire purchase, finance leasing and refinancing facilities between £10k to £2m to businesses in sectors such as construction and plant hire, engineering, printing, transport, waste and recycling and agriculture.

The BBB’s investment arm either makes loans to or investments into finance providers to smaller businesses, “acting as a catalyst to increase both supply and diversity of finance for smaller businesses”, it says, whilst earning “an attractive, commercial return for the UK tax-payer.”

According to figures from the Finance and Leasing Association, the asset finance industry experienced 11% growth in 2015 to £28.1bn, excluding high value deals, it’s second consecutive year of double digit growth.

Catherine Lewis La Torre, CEO of British Business Bank Investments said of the deal “The British Business Bank’s recent Small Business Finance Markets Report indicated strong growth in asset-finance volumes over the last two years, and we see asset-finance as an important option for smaller businesses looking to realise their growth potential.”

“We are pleased to be making this investment in Praeture Asset Finance – by supporting relative newcomers to the market – Praetura was established in 2014 – we are actively increasing lending choices for smaller businesses across the UK.”

Praetura may be a new company but it’s management team are not short of experience. Between them, MD Mike Hartley, Company Secretary and Operations Director Daryl Johnson, and Credit Director Mike Dalzell have more than 85 years’ financial services experience between them.

The company works with brokers, accountants auditors and insolvency practitioners, adding value, they say on the company website, “to professionals who are seeking to streamline a company’s operations, organise expansions or management buy-ins and buy-outs, and mitigate short term cash flow issues.”

Unencumbered assets that will be considered for asset based lending range from HGVs, trailers, mobile cranes, drilling machines, crushers, storage silos, cutting and printing machines, tractors, combine harvesters and even milking machines.

Says MD Mike Hartley “we are delighted to be partnering with British Business Bank Investments Ltd. The syndication of our senior debt, alongside the expansion capital facility, provides us with real stability to support our continued growth.

“Like our other institutional funders, British Business Bank Investments Ltd. shares our aim of providing suitable and targeted finance solutions for SME’s. These facilities will help meet the objectives of both parties, and to secure Praetura’s market position in the coming years.”

Praetura’s offices are in Blackburn, Lancashire, and Manchester.

The British Business Bank, which is 100% Government owned, works with more than 80 finance partners and says it will unlock up to £10 billion of new finance.

The company’s 3 main areas of activity are “Start Up”, providing mentoring and loans to new businesses through its Start Up Loans programme, “Scale Up”, providing funds to fast growing businesses or those with the potential to do so, through the Angel Co Fund, Enterprise Capital Funds and Help to Grow Growth Funds, and “Stay Ahead”, which enables guarantees to banks lending to smaller companies, funding for smaller asset finance providers, Enterprise Finance Guarantees and Finance platforms and Credit Reference Agencies.  

 The BBB are behind The £400m Northern Powerhouse Investment Fund, Midlands Engine Investment Fund. British Business Bank Investments is the agencies commercial subsidiary.

 

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