(Alliance News) - Distribution Finance Capital Holdings PLC on Friday said it has agreed with the British Business Bank PLC to increase the Enable Guarantee to GBP250 million.
Distribution Finance is a Manchester-based bank providing working capital solutions to dealers and manufacturers across the UK. According to the British Business Bank, the Enable Guarantee is designed to encourage additional lending to smaller businesses.
Distribution Finance said it has agreed to increase the Enable Guarantee to GBP250 million from August 31, from the initial GBP175 million agreed in January.
As previously announced, this may be increased further up to GBP350 million in the future.
The commitment provides Distribution Finance with incremental capacity to scale its loan book without the need for additional Tier 1 equity capital.
Additionally, the company said it is "well progressed" with its plans to raise non-dilutive tier two capital to further support its product diversification and medium-term growth strategy.
It said that, together with the Enable Guarantee, this would allow the loan book to reach in excess of GBP800 million without requiring additional tier one capital.
Chief Executive Carl D'Ammassa said: "This additional support from the Enable Guarantee further strengthens our relationship with the British Business Bank, being a key foundation of our capital strategy, and supports our growth ambitions into 2024."
Distribution Finance shares were untraded at 31.00 pence each in London on Friday morning.
By Sophie Rose, Alliance News reporter
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Distrib. Fin. (DFCH)