Responding to demand for private equity lower-mid market funding
When covid-19 first hit the UK in February, leading to the national lockdown beginning on 23 March, the immediate impact was on business revenue as many businesses were forced to close whilst others faced reduced demand, supply chain problems or delayed payments from debtors.
Government support schemes were designed to help businesses retain cash by reducing or deferring their outgoings such as tax payments and business rates whilst keeping on staff through the Job Retention Scheme. The Government also encouraged lenders to provide additional funding to businesses through four schemes; BBLS, CBILS, CLBILS and the Future Fund.
Lenders accredited for these schemes by the British Business Bank have so far provided more than £57 billion in funding. The Chancellor’s Winter Economy Plan included confirmation that all four schemes will close for new applications at the end of November.
One of the consequences of processing more than 1.6 million government backed loan scheme applications of which more than 1.3m were accepted is that the banks and alternative lenders have been limited in how much “business as usual funding” they could support. This is especially so for those type of deals such as MBOs or some private equity backed deals that were ineligible for CBILS or CLBILS funding.
For the mid-sized businesses that we focus on, we are looking forward to addressing this pent up demand.
For example, in the lower mid-market private equity sector we are gaining increasing support from private equity investors seeking funding for their existing portfolio companies or funding to acquire new businesses for their portfolios. To meet this demand we have created a specialist private equity deal team comprising origination and credit experts to help deliver the speed, certainty and flexibility that is required.
