BBB invests in UK asset finance group

The UK-government owned entity aims to unlock £36m of investment into SMEs based in the northwest of England through its backing of Praetura Asset Finance.

The UK government-owned British Business Bank has invested £18 million (€21.3 million; $23.9 million) in Praetura Asset Finance, an asset financing firm based in the northwest of England.

The investment, according to the BBB, will unlock a total of £36 million of financing to small and medium-sized enterprises in the region. Under the terms of the agreement, Praetura will match the BBB’s investment pound-for-pound.

Praetura, established only two years ago, has offices in Manchester and Blackburn and provides funding for hire purchases, leases and other types of asset-based financing. Deal sizes range between £10,000 and £2 million and the firm targets industries such as construction, agriculture, engineering and transportation.

Catherine Lewis La Torre, chief executive of the BBB, said: “We see asset finance as an important option for smaller businesses looking to realise their growth potential. By supporting relative newcomers to the market, we are actively increasing lending choices for smaller businesses across the UK.”

Mike Hartley, managing director at Praetura, said: “We are delighted to be partnering with the BBB. The syndication of our senior debt, alongside the expansion capital facility, provides us with a real stability to support our continued growth.”

The BBB has invested in a number of firms specialising in asset-based financing this year.

In July, the bank set up a £16.5 million revolving credit facility for the Manchester-based Kingsway Asset Finance, which was preceded by a £51 million investment in LDF, a firm that provides asset-based and leasing loans to UK SMEs.

Simon Goldie, head of asset finance at the Finance and Leasing Association, said that the BBB’s latest investment is part of a growing interest in the asset-based lending market. “This latest announcement shows the increasing prominence of asset finance in small business funding.”