Bolton-headquartered UK Finance Online has received £1 million of mezzanine funding from the North West Fund for Development Capital, which is managed by YFM Equity Partners.

This is the sixth investment made by YFM from the North West England-focused fund, and its first in Bolton.

UK Finance Online trades as Money Health Check and handles claims from the misselling of payment protection insurance (PPI). To date it has claimed more than £19 million on its customers’ behalf.

The company was founded in 2002 and acquired five years later by Ges Ratcliffe, an insolvency practitioner, and his business partner James Dean. Ratcliffe is now the company’s managing director and Dean its chief operations officer.

Says Ratcliffe, ‘This investment will enable us to accelerate the growth of our business and employ additional staff to handle quickly and professionally the large number of claims for PPI.’

YFM investment director Deborah Heyes and investment manager Sarah Riley worked on the mezzanine finance deal, while accountancy firm Baker Tilly advised UK Finance Online on the transaction.

Heyes says the mezzanine deal allows UK Finance Online to repay the loan for up to seven years, after which it would be convertible to equity.

She adds, ‘We have seen a sharp increase in interest for [mezzanine] finance from local entrepreneurs looking for a long-term source of funding without having to give up a significant shareholding in their business.’

The North West Fund for Development Capital is a sub-fund of the EU-backed North West Fund which has £185 million to stimulate economic growth in the region.