When the alternative becomes mainstream
The raising of lending limits is as welcome as the Spring sunshine
The invoice finance and alternative lending sector used to be the wild west of business finance.
On the supply side of the finance market this week we’ve seen some fairly tasty developments.
Thin Cats, who I’ll be doing a longer interview with soon, have announced that they’re upper limit has been raised its maximum initial loan size from £15m to £20m.
The change follows increasing demand from what ThinCats says is a funding gap in this part of the market.
ThinCats’ average initial loan size has increased to more than £6m over the last 3 years and during this time ThinCats has provided more than £500m in funding for loans above £10m in size.
The minimum initial loan size remains at £1m, but the increased loan size will be available to three main borrower types: owner managed businesses, private-equity sponsor-backed business and healthcare businesses.
Funding can be used to support growth capital, acquisitions and refinancing.
ThinCats also provides follow-on funding beyond £20m – the largest exposures to date have been £35m.
Ravi Anand, Managing Director, ThinCats, said: “Solidifying our position to provide £20m in initial funding is a response to clear demand from our nationwide network of advisers and sponsors wanting the same flexible and pragmatic approach for more of their clients and portfolio companies. Furthermore, to support future requirements we will provide follow-on funding above £20m.”
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WeDo, which Mark Lindsay set up in 2019 with Chris Robinson, has secured £50m in funding from the American alternative investment manager, Waterfall Asset Management.
Its overall lending now exceeds £50m, and chief executive, Mark Lindsay said Waterfall’s funding would enable it to achieve significant growth as it aims to reach £100m within the next three years.
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On the demand side, asset-based lending has supported the expansion plans of Sykes Seafood, the Warrington-based frozen seafood supplier, which is targeting a 20% increase in sales over the next 12 months, and 40 new jobs, following a £50m asset-based lending facility and a £12m loan from HSBC UK.
Over in Leeds Mach Recruitment has sealed a £45m invoice finance facility with Metro Bank to support the acquisition ambitions of the ecommerce and food sector specialist.
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This week on Rainmakers I took a much closer look at the market dynamics behind the wave of consolidator activity in the accountancy and legal sectors.
There’s a link to the piece here, but I’m sure it won’t be the last time we write about it in the next couple of months.
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HELP WANTED
The reaction to our piece about Jo Sellick, the recruiter and business owner who shared his story with us has really struck a chord.
Jo served a five year earn out period when he sold to a French group, but the loss of a sense of purpose as it came to an end led to him knocking on the door of the private health clinic The Priory seeking help as his mental health deteriorated.
I’ll have another piece next week about how the advisory community needs to raise its game and rethink some of its service offerings.
If you have something to add, or strong feelings on this, please let me know.
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As it’s a shorter working week, this is our free end of week piece, which is free to everyone.
Next week we’ll have two long pieces, focusing on happenings going on in the advisory and funding market - what it means and where things are going.
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OUR NEXT RAINMAKERS EVENT
Our next Rainmakers lunch will feature special guest Ruth Percival, above, CEO of Contollo Group, a buy and build consultancy group backed by private equity investor NorthEdge, a deal that also made the shortlist for this year’s Rainmakers awards.
We’re giving subscribers to Rainmakers the first shot at tickets for this event, which you can register for here.
As she embarks on this new venture, this seasoned leader with extensive expertise in the corporate finance, power/energy, and healthcare sectors, will share her strategic ambitions for Contollo and the lessons learned from her impressive track record of leading multi-disciplinary teams across diverse professional service disciplines including commercial/sales and operational/service delivery roles.
She describes her leadership as values-driven, emphasizing integrity, kindness, and collaboration.
Her latest venture, Contollo is a progressive new consultancy that works with commercial developers to offer consulting services in Cost Management and MEP, with particular expertise in smart buildings.
As reported on TheBusinessDesk.com at the time, Contollo made its first acquisition in February 2024 to acquire Abacus, a Manchester-based cost management consultancy which has worked for Vita Student Living, Sunderland AFC and Bolton Wanderers FC.
Contollo sees Ruth once again working alongside entrepreneur Oliver Dennis, as she did at medcomms consultancy group Fishawack.
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