SME credit firm Caple has launched a new loan product exclusively for management teams that want to acquire an SME through a management buy-in (MBI).
Caple is able to offer access to MBI finance through its collaboration with Shawbrook Bank. It argues that MBIs for larger SMEs, or the 36,000 UK firms turning over between £1m and £50m, are underfunded in the UK. This is because these firms and loans are complex even though they often only require a relatively small amount of funding, it says.
These ‘missing middle’ firms are too big and complex for typical retail banking services or automated or peer-to-peer lenders. They can also be too small for corporate banking teams and institutional investors.
As a result, management teams are unable to access the dedicated finance they need to acquire and grow a larger SME.
Caple will offer “experienced and ambitious” management teams access to MBI funding of between £1m and £10m.
Dominic Buch, co-founder and managing partner at Caple, said: “Despite being small in number, missing middle firms make a disproportionate contribution to the economy, employing 3.5m people and turning over £639bn combined. But many ambitious management teams find it difficult to access suitable finance to acquire and grow a firm. This puts a brake on growth and job creation.
“Through our strategic relationship with Shawbrook Bank, we can now offer management teams the dedicated and focused finance they need to acquire and grow a firm.”
Nick Leitch, managing director of corporate lending at Shawbrook Bank, added: “The owners and management teams of the clients we work with are experienced professionals, often with very specific funding needs. Our focus at Shawbrook is in meeting these needs by delivering specialist funding and exceptional levels of service – values shared by Caple.
“MBIs tend to be highly idiosyncratic and often complex, so Caple’s proposition will ensure these businesses have a go-to purpose-built funding solution with the ongoing support of Shawbrook Bank.”