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Invoice financing firm Factor 21 completes MBO backed by private equity

Private equity firm Mobeus has funded the management buyout of Factor 21, a UK provider of invoice finance facilities for SMEs.

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Factor 21 has completed a management buyout of its business with a £9m funding line from private equity firm Mobeus.

Since its launch more than 15 years ago, Factor 21 has funded over £2bn of invoices and today the firm provides flexible finance and accounts receivable services to more than 400 SME clients whose annual sales range between £0.5m and £6m.

Mobeus says it is backing the Factor 21 management team to grow the firm’s two existing regional office, seeing a significant opportunity to capitalise on strong demand from SMEs for finance and service from alternative lenders.

It anticipates supporting the investment with further funding to enable the firm too “build a nationwide footprint”. The business has also secured a new £50m debt financing facility from RBSIF, the Royal Bank of Scotland’s own invoice finance business.

Factor 21 is led by David Tilling, Neal Errington and Darren Cottenden, all of whom are rolling over significant personal investments to acquire the business alongside Mobeus.   David Robertson will join the firm’s board as chairman as part of the deal. He is a former CEO of Bibby Financial Services, which grew from three to 42 offices during his fifteen-year stewardship.

Jonathan Gregory, a partner at Mobeus will also join as investor director. He says there is currently a significant opportunity to assist SME lending.

“Having successfully invested in the industry before, we are clear on the important role factoring businesses play in supporting the smaller end of the UK economy and are excited to be backing the team’s plan to deliver geographic growth.”

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