Online lender Nucleus Commercial Finance has secured a £40m funding line, which it says will “significantly” boost its lending to small British firms.
The London-based start up has signed a deal with money manager M&G Investments, and will use the cash to provide asset-based lending to small and medium sized enterprises (SMEs).
It said the deal will “provide a significant injection of finance for businesses across the UK”, adding the loan facility will allow it to boost its lending by 40 per cent.
Nucleus, launched in 2011, has it has funded invoices from over 5,000 firms, thorough asset-based lending, which allows firms to borrow against property, machinery, unpaid invoices and inventory.
Nucleus chief executive Chirag Shah said: “Working with M&G Investments to secure another funding line, reinforces our role as a true alternative to high street banks. This new facility also increases our flexibility by allowing us to offer more competitively priced funding to UK SMEs.”
M&G director of asset-based lending Kevin Haupert added: “Asset-based lending has been growing in popularity amongst both borrowers and advisers in recent years as business loans from traditional sources have become more difficult to obtain following the financial crisis.”
Last month, Nucleus said its lending to small businesses has broken through the £1bn barrier since it was set up eight years ago. It added its lending hit £282m last year, an 80 per cent jump on 2016, as it introduced new products and expanded the size of its loans.