Shire Leasing, which specialises in lease finance to small businesses, has received an £80 million boost thanks to an investment by the British Business Bank and the private sector.
Leasing finance and asset finance are increasingly important sources of finance for small and medium-sized enterprises (SMEs). It allows them to invest in assets or equipment for growth which they would not have been able to afford otherwise. The British Business Bank’s investment is its first structured as a block discounting facility and comprises £40 million from the British Business Bank, matched by £40 million private sector funding.
Based in Staffordshire, Shire already supports 11,000 SMEs across the UK, but today’s (9 October 2014) investment means it will be able double the level of finance it currently provides to firms. Shire leases enable small businesses to acquire a wide range of key assets including: telephone equipment, IT, catering equipment, and software; and they even help farmers fund the purchase of livestock and small wind turbines. The average lease size is £6,000 and the average agreement term is 48 months.
Business Secretary Vince Cable said:
Today’s investment is significant because it shows we are serious about promoting greater use of asset finance and alternative lenders. The market is heavily dominated by the big high street banks so competition is limited and innovation is slow, but by making these investments we can start to engineer long-term structural changes that benefit both businesses and the market.
Business and Enterprise Minister Matthew Hancock said:
Accessing the finance they need to start up and grow can be a major barrier for many businesses – but we are working hard to engineer a long-term sustainable change.
We are committed to making Britain the best place in the world to start and grow a business and the Business Bank is an integral part of coming good on this.
Over 30,000 businesses have already accessed finance through the British Business Bank and this new investment will be welcome news to thousands more.
Keith Morgan, CEO of the British Business Bank said:
We are delighted to be able to announce such a substantial capital contribution to the block discounting market, which is capacity constrained at this time.
The British Business Bank is committed to easing the burden on the UK’s small businesses, and at a time when lending is still difficult to come by, this is another significant step in achieving that aim.
Mark Picken, CEO Shire Leasing said:
We are delighted with this new partnership with the British Business Bank. We see a real opportunity to expand into a market that the banks have pulled back from. Ours is an exciting and innovative product which will help thousands of small firms make investments and take advantage of the new growth in the economy.
The British Business Bank is working to promote a finance market that is not overly reliant on a small number of high street banks and debt finance. To date, the British Business Bank has already invested significant funds into alternative finance providers including peer-to-peer lenders Funding Circle and Ratesetter. Next week, the government will table amendments to the Small Business, Enterprise and Employment Bill which will require larger banks to refer a business to alternative lenders if they are declined for a bank loan.
Based in Tamworth, Staffordshire, Shire employs 130 people and has a customer base that spans both the manufacturing and service industries. Shire works with businesses across the country, including businesses based in Scotland and Wales.
Notes to editors
- Founded by the Secretary of State for Business, Innovation and Skills Vince Cable in September 2012, the British Business Bank is a key element of the government’s strategy for increasing the supply of credit to SMEs.
- Bringing together public and private sector funds the Bank strives to create more effective and efficient finance markets for small and medium-sized businesses in the UK. At the heart of the government’s Industrial Strategy, the British Business Bank’s programmes are already contributing to making the UK the best place in Europe to start, grow and finance a business.
- The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a government-owned financial institution once HM Government has received European Commission State aid clearance, which is expected in 2014, at which point some of the programme will be transferred to British Business Bank plc.
- Based in Tamworth, Shire employs 130 people from across the midlands. Shire Leasing provides business support to over 11,000 SMEs across the UK, helping them to prepare for future growth. Since launching in 1990, Shire Leasing has become the largest independent funding house in the UK for equipment finance and asset leasing.