River Capital raises £10m in new funding to boost regional SME sector
Liverpool-based based fund manager River Capital has secured a new injection of £10m from Greater Manchester Pension Fund (GMPF), and delivered by private credit investor TDC, to further scale its North West Business Growth Loans Limited (NWBGL) product offering.
Established by River Capital in 2022, NWBGL provides an alternative form of loan finance to SMEs in the North West, complementary to more traditional sources such as banks.
The increased funding reflects the significant demand received to date, and is in addition to the existing £8m originally committed from cornerstone funder MSIF.
Loans are available to trading SME’s operating in most sectors, and can be used to support working capital, capital expenditure, acquisitions, management buyouts and other growth related activities. Particular focus will be on applicants who demonstrate evidence of strong social impact and positive ESG outcomes as a result of the finance.
Since launch, more than £2.2m has been provided to 10 businesses which are anticipated to create in excess of 100 jobs as a result. Recent SMEs supported include Shopify, plus agency Velstar Limited and its acquisition of WeInfluence, and Designerwear, an e-commerce man’s fashion brand experiencing rapid expansion.
The injection from GMPF and TDC will boost the maximum loan offering to £500,000, and enable the provision of financial assistance to more than 80 SME s across the North West while creating in excess of 700 jobs.
River Capital CEO, Mark Borzomato, said: “Since its inception, we have seen high demand for the NWBGL offering. We are, therefore, delighted to be able to secure additional funds to further support the region’s SME community and broaden the suite of funding options provided by River Capital.
“We and our investors are committed to fuelling the ambitions of the SME’s as well as driving economic growth. Businesses, and particularly SMEs, continue to face difficult trading conditions which have understandably made business lending more complex than ever. The resilience of entrepreneurs and SMEs continues to impress, but access to the vital funding they require remains a challenge.
“Alternative funds such as NWBGL remain critical to addressing this gap in the market. We look forward to working in close collaboration with GMPF, TDC and MSIF to make a significant positive impact in the region.”
Mark Metcalf, head of operations at TDC, said: “Investment in the North West, and indeed across the North of England, remains a priority to help address historic imbalances. It’s great to see ambitious investors, like River Capital, helping to achieve this and driving job creation across the region, along with supporting innovative businesses and management teams.
“This latest partnership with GMPF and ourselves will help to further the work of NWBGL, ultimately supporting businesses across the North West and driving inclusive growth.”
MSIF chairman, Neil Ashbridge, said: “The additional £10m commitment from GMPF and TDC is a tremendous vote of confidence in the fund and will allow NWBGL to expand its reach even further.
“Since MSIF made its initial cornerstone investment, we have been hugely impressed by River Capital’s ability to identify and nurture high potential companies that are creating jobs and driving growth across Liverpool City Region and beyond and we look forward to seeing this across a wider geographical scale.
“This latest investment will support dozens more entrepreneurs and management teams, helping them to accelerate their growth plans.”
Last week it was revealed that, according to its latest filing at Companies House, MSIF had reported a pre-tax loss of almost £2.5m in the 12 months to March 31, 2023, compared with a pre-tax profit of more than £1.7m in the previous year.
Revenues were £2.36m. Mark Borzomato, said: “Losses are reflective of the prudent policies adopted as part of the valuation of the group’s investments.
“In March 2023, these valuations also reflect the impact of the wider economic environment and cost of living crisis, the impact of the Ukraine conflict, and residual Brexit and COVID impacts as noted in the narrative.
“It is typical of the nature of such investments and portfolios that there is a degree of year on year volatility given the nature of a valuation exercise. But the portfolio remains robust and we believe will deliver long term value to the group, as it has done historically.”
