Bank offering loans up to £5m
Barclays looks to emulate US with SME fund
Loans of up to £5m, repayable over three years, will be made available.
Until now, this type of lending has not been widely available to UK businesses, whereas their US firms have been able to grow rapidly through access to debt finance.
Barclays says fast-growing technology firms develop much more rapidly than the 15 year average of traditional businesses, therefore they can benefit from access to debt finance, as an alternative to selling equity. This also allows leading entrepreneurs to retain control of their company’s development and concentrate on accelerated growth.
A recent report by Barclays showed that UK technology businesses are expected to grow four times faster than GDP in 2015.
Launching the new fund, Ashok Vaswani, chief executive of Barclays personal and corporate canking, said: “We identified a significant gap in the traditional way technology businesses were financed.
“Entrepreneurs and SMEs are the life blood of the UK economy and the technology sector is an incredible incubator for many of these talented individuals and businesses.
“The rapid growth we’ve seen in the UK rivals the activity and dynamism of Silicon Valley with record levels of investment from the US into London-based technology firms in particular.”
Sean Duffy, managing director, Barclays’ technology, media and telecoms team, said: “Fast-growth technology companies in the US have long been able to access debt finance early in the life cycle, and some of the most successful US technology firms, including Facebook and Google, have grown their businesses with help from this type of funding.”