The British Business Bank will provide a £100m facility to Hitachi Capital UK to fund a portfolio of new asset finance deals for SMEs.
The transaction is the first of the British Business Bank’s new ENABLE Funding programme, which aims to increase the supply of leasing and asset finance to smaller businesses in the UK.
The European Investment Fund will guarantee 50 percent of the facility.
Reinald de Monchy, managing director at Wholesale Solutions at the British Business Bank, said: “This £100m transaction with Hitachi Capital is the first in our new ENABLE Funding programme, which aims to boost the availability of asset finance.
“We are planning a number of further transactions over the next 18 months, and to refinance these facilities through securitisation once they achieve the required critical mass.”
Bernard Skivington, director of wholesale solutions/asset finance at the British Business Bank, said: “Asset finance is vital to many high-growth small and medium sized businesses.
“As these businesses grow and scale-up they will look to buy or replace plant and equipment, and it is essential that they are able to get the funding they need to do so.”
George Passaris, head of securitisation at European Investment Fund, said: “We are very pleased to be participating as guarantor in this innovative facility for Hitachi. The involvement of EIF in the ENABLE programme signals EIF’s attention towards the UK non-bank finance providers.”
Hitachi Capital UK works through finance brokers to provide a range of products to smaller businesses including hire purchase, operating lease and finance lease solutions.
The programme will allow Hitachi Capital UK to expand its provision of business asset finance.
Gavin Wraith-Carter, general manager at Hitachi Capital Business Finance, said: “Being the first funder to take part in an ENABLE funding programme transaction reinforces our commitment to understanding the specific needs of SMEs, and offering tailored financial solutions for their business requirements.”
The ENABLE programme aggregates asset finance portfolios from mid-market providers in a warehousing financing facility.
In order to build the critical mass necessary to securitise the assets, the ENABLE Funding programme will be announcing similar agreements with other funders over the next 18 months.
Facilities will range from around £25m to £150m, and the programme will aim to refinance the warehouse facilities when receivables total around £300m.
By Marcel LeGouais