The nation’s more than five million SMEs are the lifeblood of the economy, accounting for 99% of all businesses.
Nearly two-thirds of the population is employed by these small businesses, but they remain underserved by investment.
SME Capital founder and CEO James Kaberry is looking to change that. “When funding in this part of the market was hurt by reduced bank lending [during COVID-19]it masked a huge number of quality and ambitious UK companies ready for growth, “he said.
“Even during the pandemic, these companies pivoted and created opportunities where others saw challenges.
“Many of them are family-owned and entrepreneur-led businesses, and all are looking to take it to the next level.”
The alternative lender has now raised investments from three family offices to scale back its lending to UK SMEs. Mustard Kick, Hambleden Capital and Karan Capital will join the board of the company as part of the deal.
The investment will also allow SME Capital to develop a new product which it will bring to market by the end of the year. Currently writing tickets up to £ 6 million, the firm is industry independent and provides cash flow loans to the lower middle market, which has struggled to finance events such as M&A, MBO and MBI in recent years due to downsizing traditional banks.
“Having like-minded, motivated investors like us to support SMEs is critical,” Kaberry said.
“This new support from our new investors will help them achieve this and, in turn, advance the UK economy.”
Investors bring extensive experience and know-how as founders of a variety of industries, including healthcare, eCommerce, transportation, retail, real estate, and financial services.
“No matter how large an SME is, it is normally blocked from growth opportunities such as a M&A event simply because financial support is not available,” said David Newns, founder of Mustard Kick.
“SME Capital is a real game changer for the entrepreneurs it serves. They have a great adaptation to the product market and their customers – bright and profitable businesses – really appreciate them.
“For someone like me, who started, scaled and sold my business, I know how important it is to have this kind of support.”
Nima Sarikhani, Managing Partner of Hambleden Capital, said: “As an investor this is a tremendous opportunity in a seriously underserved space.
“SME Capital is special. Not only do they have their skin at stake by investing their capital together with the institutions in the SMEs they serve, but they are close to these businesses and work as supportive and flexible partners for owners and management teams.
“They choose customers wisely, they really hide and understand the business and the people behind it, and foster close working relationships with them.”
Arjun Patel of Karan Capital added: “SME Capital’s tailored and relationship-based approach is a boon to their clients. It is a strong and highly skilled team across the UK, led by high quality leadership.
“And family offices extend it by offering a range of multi-sectoral skills as well as experience. We are founders who, having scaled the businesses towards successful exits, reflect the ambitions of SME Capital’s clients. “
“We will support SMEs and drive the economy forward”
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