Aldermore has reported a significant upturn in block discounting business, having advanced £67 million in new facilities by the first quarter of 2013.
Block discounting enables companies to gear-up their lending activities by refinancing a block of existing loan agreements at a discounted rate, typically 80% of the value of the loans.
This means, for example, that 30 HP transactions worth £100,000 can be refinanced, releasing £80,000 which can be used to write new agreements.
Alan Carter, head of wholesale finance at Aldermore, said: “We’re delighted with the way in which our block discounting business has grown during the first few months of 2013.
“Block discounting not only offer companies the ability to fund their lending by only having to put 20p into each £1 on a transaction, but it also provides the benefit of having a funding line for a fixed period which, unlike an overdraft, cannot be withdrawn on demand.
“It’s our intention to further grow this line of business throughout 2013 and we’d be delighted to talk to any businesses for whom block discounting forms a part of their activities.
“We’re happy to be either the sole funder, or provide funding alongside other lenders.”