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Regional Funding – an East of England Perspective

By Mark Henry & Charles Kirk
Posted: 13th March 2017 09:09
With offices in Cambridge, Chelmsford, Ipswich and Norwich – and as “panel lawyers” for all of the main clearing banks with a regular workflow from them plus various other funders across different sectors (including pensions lending, trade finance, telecoms financing etc) as well as for our various business clients on taking on board funding / financing in various guises – we think that we get a reasonable insight into the regional funding market in the East of England.

As in every funding market there are, of course, different funding “spaces” / areas where certain lenders have greater appetite / market penetration than in others.  Whilst a detailed analysis of the different elements is beyond the scope of this article we think there are some interesting trends that we are seeing:
  • Funding of Trading Businesses
“Small Regional Business” (up to £5m t/o) (including Start Ups)
Between the traditional clearing banks (/”senior lenders”) on one side of the funding spectrum over to your traditional equity sources in this space – friends and family, seed VC’s etc – we are seeing an increasingly diverse range of alternative funders that have become credible alternatives, even here in “the sticks”!  These include:

Crowd funding for debt (as well as equity) has become a real alternative for the intrepid entrepreneur!  Whilst other funders point to the lack of due diligence and other arguable “flaws” in the model from a lender perspective, for the borrower it is a welcome alternative.

Various other alternative funders gaining market share, including:

For the owner-managed business (and beyond) – Handelsbanken and other challenger banks, including Metro Bank, Aldermore, Shawbrook etc;
  • Invoice discounters (where there is a sector fit);
  • Merchant cash advance providers such as Boost Capital;
  • Regional funders etc – including Finance East etc.
  • “Medium Regional Business” (£5m t/o - £30m t/o)
Again, we see crowd funding in this debt space (including asset finance) becoming ever more of a feature, as are:
  • Challenger bank lenders such as Shawbrook and Aldermore, where clients are looking for maybe a bit more flexibility / speed of execution etc than a traditional senior lender;
  • owner-managed business sweetspots continue to apply (as above);
  • “mixing it up” - beyond the classic one main clearing bank relationship and different asset finance providers;
  • platform based lending – where an advisor will intermediate between a borrower and investment funds, such as SME Capital.  These lenders tend to provide finance when the borrower cannot avail of traditional senior lending;
growth funding – in all shapes and sizes, from the schemes available from the main clearing banks to Luxembourg based funds looking for higher returns – and with the likes of Business Growth Fund (BGF – though primarily equity funding) in the middle, all open for business out here in the East of England.

Large Regional Corporate (£30m t/o plus)

Clearly, in this space more than anywhere else there have always tended to be multiple banking / funding relationships – we see this trend continuing.  In our view there are increasing numbers of debt funds focused on smaller transactions, many of whom have developed strategies that partner with banks and/or asset-backed lenders (ABL).  Additionally:
  • ABL – for the sectors where it is appropriate, asset based lending (stock, invoices, plant and machinery and real estate finance) continues to grow in popularity as a practical and cost efficient funding source;
  • growth funding – again, whether it is BGF or London / Luxembourg based debt funds or other types of mezzanine funder, we see these are now featuring ever more in the East of England funding landscape;
  • unlisted Bond Issues for regional businesses – we think these are starting to come through at more of a lower / smaller – and purely regional – level than previously.
  • Funding of Property Businesses (Development and Investment)

Smaller value (>£1m lend)

Whilst generally more of a challenge to “find a home” for this with the traditional high street / main clearing banks – with some notable exceptions – there are many “second tier” funders who are still keen to fund this end of the market and we have seen / been involved in an increasing amount of such business written by them in recent years.

Medium value (£1m-£10m lend)

Generally easier to get senior debt funding from the main high street banks (assuming you have the track record etc etc) of course – but we are also seeing some higher leveraged property deal transactions in this space too (with equity plus mezzanine plus senior debt funding).

Larger value (£10m+ lend)

Generally an even wider spread of lending appetite and with more leveraged finance also coming into play – including those Luxembourg based funds placing their money into the Eastern region, this time in the real estate finance arena!

About Mark Henry:
Mark trained and worked in the City before moving to a firm in the South West and joining Birketts in 2001.  He became a partner in 2003 and has a broad range of banking and finance experience.
Head of Banking and Finance team, Mark, is recommended by Chambers [UK 2017]  and previous editions refer to his “impressive practice covering asset-based lending, property finance, corporate finance and refinancing work".
Mark is recommended by Legal 500 [UK 2015] and listed in the elite 'Leading Lawyers' list of lawyers nationwide. In this edition clients note that Mark is "commercial, knowledgeable and hands on". An earlier edition notes that he "attracts high praise from clients".

Mark can be contacted on +44 (0)1473 406306 or by email at

About Charles Kirk:
Charles studied law at the University of Sussex, with Masters degrees in law from the University of Cambridge and the University of Essex. Prior to joining the corporate and banking department, Charles was a private practice lawyer at an international law firm and an in-house lawyer at Barclays Capital and Deutsche Bank, with a focus on banking and capital markets.
Charles has extensive banking, structured products, derivatives and capital markets experience and has advised bondholders, issuers, banks and other financial institutions on a wide range of complex transactions.

Charles can be contacted on +44 (0)1245 211243 or by email at 

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