Member Article

Alternative lenders enticed to North West

Challenging market conditions are fuelling growth in the asset based finance industry and the number of debt funds in the North West.

That is according to Deloitte’s head of debt advisory in North West, Nigel Birkett.

Figures from the Asset Based Finance Association (ABFA) show that the share of facilities above £10m in the overall market has more than doubled from 4% to 9% between 2001 and 2011.

The trend demonstrates the growing maturity of the industry and its acceptance as a form of finance with larger corporates.

Recent years have seen the introduction of US financial heavyweights Wells Fargo and PNC to the UK market through Burdale Financial and KBC Business Capital.

Together with the established lenders in the market, this form of funding is becoming more accepted in the mid-market arena.

Mr Birkett, Partner, said: “The North West has a sizeable asset based lending industry which will only get stronger in the years to come.

“We recently advised on the £80m refinancing of WT Burden, which generated significant appetite from asset finance lenders.

“The number of debt funds is also increasing and can offer an alternative to traditional bank finance.

“Whilst debt funds to date have typically targeted larger companies, recent funds launched such as Metric Capital and Encina are focusing on the mid market.

“As banks continue to focus on strengthening their own balance sheets, increased liquidity appears some way off.

“The increased availability of alternative funding, including asset based lending and mid market debt funds, is therefore good news for corporates in the region.”

This was posted in Bdaily's Members' News section by Tom Keighley .