TWO Yorkshire corporate financiers have secured £30m to launch a new SME (small and medium-size enterprise) lender.
Fresh Thinking Capital has been established by Melanie Hird and Andrew Walls, who have a strong track record of investing in and supporting SMEs.
The firm, which has offices in Leeds and London, will offer secured lending loans of between £100,000 and £2m to help bosses at small and medium sized businesses who are looking for finance.
“There is still a gap in the lending market to SMEs here and across the UK, and the first fund we have established has given us £30m to lend immediately to these businesses,” said Ms Hird. “We know that good businesses often have urgent lending needs and quite often an opportunity arises, such as winning a new contract or acquiring a business or asset, but the slow speed at which funding can traditionally be raised results in the opportunity being missed.
“The level of governance and red tape in place in financial institutions means it is impossible for many lenders to move quickly and this is hindering the growth of businesses.”
Fresh Thinking Capital has the backing of a private investor and has secured deposits of £30m initially for five years, with a view to deploying further funds.Ms Hird said the “like-minded” investor was a perfect fit for the business and was allowing them to take a flexible approach.
The firm is initially launching loans secured against assets, including property both inside and outside the business, that can be signed off by Ms Hird and Mr Walls and drawn down to clients within five working days of the initial meeting.
Co-founder Mr Walls said: “We are already working with other lenders including banks, ABLs and equity funders to bridge gaps to ensure refinances and transactions complete.
“We are encouraged following a number of discussions we have already had with banks and management teams, who see the benefit of utilising short-term funding to be able to take advantage of opportunities which can be refinanced in a more normal timetable in due course.”
Mr Walls continued: “We have set up the business in order to streamline the lending process, and having the full fund on deposit, together with a completely flexible approach to structuring loans.
“We listen to the customer’s requirements and tailor the funding to suit, rather than ‘one size fits all’.
“Even when deals don’t suit our secured debt offering, we work with our London office or introduce them to our network of equity investors, asset based lenders or alternative funders. In most cases, we find a solution for the client,” he said.
Having been the founders of investment management firm Seneca in Yorkshire, Ms Hird and Mr Walls said they will continue to work with the firm on potential equity requirements, as well as introducing opportunities.
Ms Hird adds: “We have invested in laying the foundations for this business properly, with the right systems and processes to scale up to be a national network of offices very rapidly.
“Unlike many loan funds, we don’t have to keep ‘going back to the well’ and pitching to our backers for each deal as we have the full value of the fund on deposit to lend to deals that meet the criteria.”
Fresh Thinking Capital’s offices in Thorpe Park Leeds will be its headquarters and, together with the London office, provides a “solid platform” to start the business, according to Ms Hird and Mr Walls.
There are plans to build a network of five offices nationally within two years.
Ms Walls said: “We have already seen interest from a number of financiers keen to get involved and establish our network of regional offices, and we fully anticipate significant growth this year and the opening of more offices.”
Many SMEs believe that access to funding is their biggest barrier to growth.