SME lender raises £120m for investment in burgeoning small ventures
Manchester SME lender Beechbrook Capital has achieved a first close on its third UK SME-focused fund, raising £120m, including the fund and separately managed account commitments.
This news follows some £40m invested in North West businesses to date by its UK SME Credit funds, with investment increasing from £15m to £26m between the first and second funds (73%). In the North, investment increased from £15m to £35m (140%).
Three out of five investments made in the North to date have been in the North West, including Cheshire-based home use beauty device ecommerce retailer CurrentBody.
In one of the final investments of its second fund, Beechbrook provided a flexible debt and equity solution to support the buyout of the business by ecommerce specialist investor and growth agency, eComplete.
The delivery of investments in the region has been supported by Beechbrook Capital’s presence in Manchester, where it opened an office in 2017.
British Business Investments, a wholly-owned commercial subsidiary of the British Business Bank plc, has made a £30m commitment to the latest fund, following commitments in 2017 and 2019 to Beechbrook’s two earlier SME Credit funds.
Beechbrook’s UK strategy supports small and medium-sized businesses in the UK with a turnover of between £10m and £100m and EBITDA of £1m and above.
It will provide mainly senior secured loans to non-private equity-backed companies to support acquisitions, buyouts, shareholder re-alignments, re-financings, and general expansion plans.
Beechbrook managing partner, Paul Shea, said: “We are pleased to announce the first close of our third generation UK SME Fund and are grateful for the support we have received from both existing and new investors.
“Given the uncertainty created by the pandemic, providing flexible financing for SMEs is more crucial than ever. There remains an acute shortage of development and expansion finance available in the UK lower mid-market and we will continue to play our part in helping fund growth in this important segment of the market.”
Judith Hartley, CEO, British Business Investments, said: “This £30m commitment from British Business Investments to Beechbrook Capital’s third UK SME Credit Fund will enable promising smaller businesses in the North West that require growth capital to scale up successfully by accessing additional investment capital.
“The mandate of British Business Investments to promote greater diversity in the supply of finance complements Beechbrook’s own approach of providing a combination of debt and equity finance to those established businesses who need growth capital.”
