The Staffordshire-based leasing finance and asset finance firm has supported 11,000 SMEs in its history, and has now taken capital from the British Business Bank so that it can expand on this.
Shire is banking £40 million from Vince Cable’s British Business Bank, with a further £40 million coming from private sector funding. A doubling of lending capability is now expected from Shire.
Cable comments, ‘The 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.’
The investment in Shire comes a week before the government tables changes to the Small Business, Enterprise and Employment Bill, meaning that larger banks will have to refer businesses declined for a loan to alternative lenders. Amongst these alternative lenders is Funding Circle, a venture capital-backed peer-to-peer funding platform that has so far received £20 million and £40 million in two tranches from the British Business Bank.
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Mark Picken, CEO of Shire Leasing, which as 130 staff and a customer base in the manufacturing and service industries, says, ‘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.’
At the beginning of September, total commitments under the British Business Bank investment programme closed in on £200 million after European Capital SME Debt secured £50 million of a total £100 million allocation.
Set up by Cable in September 2012, the British Business Bank is described as a ‘key element’ of the government’s strategy for increasing the supply of credit to SMEs and is headed up by Keith Morgan, former director and head of wholly-owned investments at UKFI.