Lender completes £1.5m funding round with Future Fund
Assetz Capital, the Manchester-based peer-to-peer lender, has completed a further £1.5m fundraise, after the Government’s Future Fund matched its overfunded crowdfunding round on Seedrs of more than £750,000.
The secured business lender – which lends to UK SMEs and small housebuilders – is using the funds to further support its growth and also help fund the set-up of its lending under the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS).
Assetz Capital has a growing portfolio of institutional investors and those funding CBILS loans include Aros Kapital, the Nordic bank, and British Business Investments, a subsidiary of the British Business Bank, with other new institutional lenders presently being onboarded.
By mid-September the company had seen hundreds of millions of pounds of CBILS loan enquiries and had already worked through the approval process for more than £200m of those.
The Government has also extended the window for applications until the end of November with further time after that to get facilities drawn.
Earlier this month Assetz Capital also restarted retail lending and is aiming to scale that up again to past levels and beyond over time.
That is expected to help it lend its second £1bn to UK SMEs before December 2022, an acceleration from the seven years to lend the first £1bn.
Chief executive, Stuart Law, said: “We are proud to bring the UK government into our shareholder base through the Future Fund, sitting alongside new retail investors after our latest crowdfunding round.
“We have our momentum back in the business again after the necessary pause for the pandemic.
“COVID-19 has thrown up significant challenges for all business, but we feel that we are already entering the next up-cycle where we are again focused on growth and getting back to providing UK SMEs much needed capital at scale.
“We are fully supportive of the extension to CBILS and remain ready and able to also deliver under the new government scheme that follows CBILS in the New Year.
“It is great to see our furloughed colleagues returning to work and the team’s professional management of the crisis that hit the country in March.
“We look forward to a strong finish to this year and a very strong 2021 as we fulfil growing demand for funding from quality borrowers.”
He added: “Our retail investors were originally attracted to both the healthy loan interest rates on offer and also the sectors we support through funding. Whilst the pandemic was a bit of a shock to everyone initially, we are seeing most investors getting comfortable that our property-secured approach – and the sectors that we lend to – provides them a degree of comfort and a fair return for their investment.
“The debate on negative interest rates is intensifying and Bank of England data published last week shows deposit rates continuing to decline in July.
“We note banking sector analyst remarks that the impetus for deposit rates to fall further in the short-term will drive diversion of funds to wealth management and other higher interest-earning investment products as we come out of this crisis.
“This is a strong statement, but only confirms our existing expectations that this will happen, and possibly at a significant scale.”
The Future Fund offers convertible loans ranging from £125,000 to £5m from the Government, subject to at least equal match funding from private investors. Firms must have previously raised at least £250,000 in equity investment from third-party investors in the past five years.
Assetz Capital has lent more than £1bn since its inception in 2013 and funded around one in every 100 new homes for the past two years and around one in 12 of all homes built by SME housebuilders over the same period.