Buy-out firms are still finding it hard to secure the finance they need from traditional lending sources, despite an increase in ‘high quality’ deal opportunities.

Buy-out firms are still finding it hard to secure the finance they need from traditional lending sources, despite an increase in ‘high quality’ deal opportunities, according to a private bank.

The growth and acquisition finance division of Investec Specialist Private Bank has seen an increase of 50 per cent in enquiries for mezzanine and asset-backed finance in the first three months of 2010, compared to the same period last year.

James Stirling, a director at Investec Growth & Acquisition Finance, comments, ‘High quality deal flow in the private equity market is increasing and as a result of this we are seeing a significant rise in demand from this sector for asset based lending and mezzanine finance.’

Traditional sources of senior debt are still less accessible to private equity firms than before the credit crunch, Investec claims.

Investec Growth & Acquisition Finance provides finance to companies with a funding requirement of between £4 million and £25 million.