Seneca sells trade finance business to new credit platform iO Partners

Seneca Partners has sold Seneca Trade Finance to iO Finance Partners (iO), a newly launched private credit platform that brings together a diverse group of alternative lenders.

Tim Murphy, Director at Seneca Partners commented: “Since we backed Chris Divers, Chris Williams and Mark McGuire nearly nine years ago they have gone on to build the leading provider of Trade Finance to UK SME’s. This is a fantastic success story and epitomises what we do here at Seneca, identifying and backing great management teams, giving them the support to build and develop exceptional businesses from scratch.

“The time is now right for us to exit and we have no doubt the business will continue to thrive under the new ownership structure and we wish the team every success in the future.”

A lean operation in Manchester, with a team of just 12, Seneca Trade Partners now has just short of 300 companies on the books with a maximum facility of £300k, and a typical loan of around £100k – normally linked to a transaction.

The deal is estimated to be worth £40m.

Introductions are often made by brokers, many of them also ex-bank executives, but the business also invested in a trade portal app which allows customers to view their transactions and make drawdowns through the app.

Chris Divers, Director at Seneca Trade Partners, said: “Since forming this business the support from Seneca has been first class and has enabled us to create a business which is instrumental in providing financing to SMEs. We are the UK’s leading SME stock funder allowing businesses to turn inventory into income faster.

“Joining iO will give us additional scale which we will utilise to provide even more SMEs with crucial access to growth capital.”

Seneca received legal advice on the sale from Jonathan Gillow and Dan McDonagh at Hill Dickinson.

iO Partners is a buy-and-build alternative financing player which intends to acquire three alternative finance providers, led by CEO, Mike Ellwood, an experienced Corporate Banker having been Managing Director for RBS Structured Finance, and most recently established Santander, making it a significant player in the market as Head of Corporate and Commercial Banking, with more than £20bn in assets and almost 1,000 people. 

Early backers of iO include B.P. Marsh, a specialist investor in early-stage financial services businesses, which has taken an 8% shareholding for £10m and Janus Henderson, which is also investing on the same terms.

Seneca Trade Partners was created when director Chris Divers pitched the idea to Haydock headquartered Seneca to offer finance for SMEs who were finding it difficult to access stock funding quickly and when they needed it most.