SME borrowers to benefit from new and extended facilities, 1pm says
Independent specialist finance provider 1pm has secured new and extended facilities to provide further funding for UK small to medium enterprises (SMEs), it announced on Tuesday.
The AIM-traded firm said the new facilities were primarily for its loans division, with an increase on the current £7.5m secured medium term note programme to up to £25m.
In addition, it said a further £5m of funding specifically for its loans business had been established with some of its long-standing funders.
First established in 2017 through LGB Corporate Finance, 1pm said the the MTN programme offered loan notes to institutional, wealth management and private investors.
The MTN programme would continue to provide the group with the flexibility to issue notes with a range of maturities, repayment profiles and fixed interest rates, the board explained.
It said the first issue of notes under the new and increased programme, amounting to £3m, had been placed with an institutional debt facility provider.
The funds raised would continue to be used primarily to meet demand for loan finance from the group's SME customer base, but would also provide it with the flexibility to fund related products and acquisitions.
Alongside the increase in the MTN programme, 1pm said it recently negotiated increased block discounting facilities totalling £5m with a number of existing funding partners.
That additional debt funding would be used exclusively for the purpose of writing new business in the financing of loans to UK SMEs, offering improved flexibility.
As with all of the group's existing leased asset and loan funding, the new borrowing facilities were 'matched' with the term of the lending facilities the group provided to UK SMEs.
As such, the funding would amortise over the length of the group's lease or loan term, which was typically three years.
That matching policy was said to be a “key element” of the group's risk management and governance.
The company said it was continuing to experience “robust demand” for finance, including loan funding which would be provided through the new and extended facilities.
It explained that the deployment of those facilities would enable the loans division to increase the amount and to diversify the range of lending for business-critical loans used by SME businesses, while maintaining its strict underwriting criteria.
“I am delighted that the group has further strengthened its relationships with a number of key block discounting funding partners as well as reaffirming and significantly expanding the MTN programme,” said 1pm’s chief financial officer James Roberts.
“We now have sizeable funding facilities in place across all our divisions, affording comfort over our funding capabilities for the foreseeable future as well as providing a wide range of cash flow solutions to the UK SME market.”
Roberts noted that in 2018 it announced its £35m partnership with the British Business Bank to fund its hard asset leasing business, and in March it announced its extended and consolidated £37m facility with NatWest to help grow its invoice finance businesses.
“Now we are delighted to be able to announce our combined £30m of funding facilities for our loans division.
“Given the wider macro-economic uncertainty, our partners' desire to support and work with us and to provide larger and more flexible facilities is extremely pleasing and reflective of the group's reputation within the industry as an ambitious and growing business.”
At 1339 GMT, shares in 1pm were up 2.08% at 33.18p.