New finance intermediary secures multi-million pound cash fund to back struggling SMEs
A BELFAST financial intermediary firm has secured a fresh pot of money - initially £25 million but which could grow to £100m within the next six months - which it claims will help small businesses in the north struggling to access finance from the mainstream lenders.
And Clearpath Finance, a wholly-owned subsidiary of GDP Partnership, has already drawn down £15m in its first tranche of loans which will go towards licensed trade, retail and renewables projects.
GDP directors Conor Devine and James Gibbons are behind Clearpath Finance, which they say will provide another viable alternative source of lending in what is currently a "seriously under-supported market".
Clearpath, which is regulated by the Financial Conduct Authority, will effectively offer term-loan funding, secured or unsecured, at rates of between four and 12 per cent.
"We've put in the leg-work and educated a number of major lenders on the demographics and convinced them to lend here," Devine told the Irish News.
"Some of them have never previously been associated with the market in Northern Ireland, but they see the strategic value in supporting an SME sector in which 80 per cent of firms say they intend to grow, which clearly indicates the potential of the sector to expand and flourish under the right conditions.
"Clearpath Finance has established excellent relationships with a select number of peer-to-peer lenders, equity and mezzanine funders and private lending consortiums and what we can now offer will go some way toward solving the current liquidity crisis in the local economy."
He added: “The SME market has been seriously under-supported by the main financial institutions over the last decade, mainly due to legacy debt and balance sheet problems facing the local banks.
"But we've identified an opportunity in the market to provide third party lending to businesses and organisations looking for additional financial resources.
“By bringing together a number of larger financial institutions which have the capacity to support the SME sector in Northern Ireland, we will ensure that business lending for the SME sector is through a simplified, uncluttered and expedient path.”
Fellow Clearpath director Gibbons added: “Many businesses in Northern Ireland, for one reason or another, are being turned down by the main street banks when asking for support for their business.
"But depending on each individual case, we can offer up to 70 per cent of the loan-to-value, ensuring SMEs have the access to funds when they need it, whether it is for additional cash flow, to fund an extension, or to grow their business."