SME lender given £40m debt funding line
Independent lender Reward Finance Group has agreed a £40m secured loan from Foresight that will support its growth ambitions.
Joint managing director Tom Flannery described the agreement as “a significant step forward in the short history of Reward Finance Group”.
Reward Finance and its parent, Tradehold, had been working with LGB Corporate Finance since the start of the year to structure and source a debt package that met the company’s objectives, which resulted in the deal with Foresight.
Leeds-based Reward was founded in 2011 by Flannery and Dave Jones and was set up as an independent lender providing secured loans to UK-based SMEs. It takes multiple assets as security, enabling them to provide short to medium term loans or invoice discounting facilities to support companies in a variety of different situations.
Reward has delivered year on year growth in its loan book and pre-tax profit. In the year ending February 2017, the company advanced funds totaling £84m and the year-end loan book stood at £40m, up 25% on the previous year. Corresponding income grew to £7.56m and pre-tax profit was £3.5m.
The company continued to maintain its low bad debt rates, with write-offs representing only 0.03% of total funds advanced.
Flannery said: “Whilst we have been growing the business with substantial loan facilities provided by our ultimate parent since our inception in 2011, we have been looking for a senior debt funding facility to take the business on to the next level.”
Reward is 70% owned by Dr Christo Wiese’s Johannesburg Stock Exchange listed Tradehold Limited with Reward’s management team owning the remainder. To date, the company has been solely funded by Tradehold and its associates and affiliates.
James Livingston, partner at Foresight, added: “We’re delighted to back Tom, Dave and the broader Reward team. They are successfully addressing a significant gap in the market and continue to expand their offering both in terms of national reach, with the opening of additional offices, and debt offerings. This investment represents a healthy diversification for our growing portfolio which we are seeking to continue.”
The Foresight loan note facility was established in August. Reward then drew down £20m to enable a partial refinance of the Tradehold funding, as well as to provide capital to fuel the growth of the Company’s loan book. The remaining £20 million remains available for the company to draw on a flexible basis to support its ongoing growth.
As a result of a restructuring that occurred in conjunction with the loan note facility, Tradehold’s financial assets, including its shareholding in Reward, are being unbundled into a separate entity called VestIN which is listed on the Bermudan Stock Exchange and South Africa’s JSE AltX Stock Exchange. Completion of the share transaction is expected November 2017. VestIN, alongside Foresight, will continue to provide funding to Reward.
