Proposals Re. The SME Loan Fund plc

21 February, 2017

GLI FINANCE LIMITED(THE "COMPANY" OR "GLIF")

Proposals Re. The SME Loan Fund plc

Further to the announcement by The SME Loan Fund plc ("SMEF") this morning regarding proposals for its future, the directors of GLI Finance Limited (the "Directors") confirm that:

· GLIF is exploring the potential for a secondary placing of its total holding in SMEF at 90p per share (a discount of 3.2% to SMEF's closing share price of 93p on 20 February 2017), valuing its total holding at £22.7 million (the "Secondary Placing"); and

· Amberton Asset Management Limited ("Amberton"), which is 50% owned by GLIF and is the current investment manager of SMEF, is in discussions with SMEF and SQN Capital Management, LLC ("SQN") regarding:

- the potential transfer of the provision of investment management services to SMEF from Amberton to SQN; and

- the potential appointment by SQN of Amberton as its sub-investment adviser in relation to SMEF's existing portfolio of loans; 

(collectively the "Transfer of Management Services").

Upon successful completion of the Secondary Placing, GLIF will use the proceeds to repay the £14.86m syndicated loan, which matures on 15 March 2017. This will allow GLIF to simplify and strengthen its balance sheet.

In the event that the Secondary Placing is not completed, the directors of SMEF have announced that they intend to bring forward proposals for the orderly realisation of SMEF's investments and return of surplus capital to shareholders via periodic mandatory redemptions. In the event that such proposals are brought forward, GLIF would vote in favour of them. In such event, the repayment of any unpaid balance of the syndicated loan will be refinanced until receipt of proceeds.

In the Company's strategic review announced on 16 February 2016, its goals included to rationalise and invest in the Company's core business, remove unnecessary complexity and initiate measures to strengthen the balance sheet. The disposal of GLIF's investment in SMEF contributes to achieving those objectives.

If Amberton is appointed by SQN as its sub-investment adviser in relation to SMEF's existing portfolio of loans, such appointment would be for a minimum period of 12 months. The Transfer of Management Services would be conditional on the Secondary Placing being completed. Amberton has recently been successful issuing collateralised notes on behalf of the wholly owned Sancus BMS group. Amberton will continue to work closely with Sancus BMS to provide capital market services.

The Company will make a further announcement in due course.

Ends

Enquiries

GLI Finance Limited

Andy Whelan

+44 (0)1534 708900

Liberum Capital (Nominated Adviser and Broker)

Steve Pearce

Chris Clarke

Jonathan Wilkes-Green

+44 (0) 207 100 2000

Instinctif Partners (PR Advisor)

Tim Linacre/Nick Woods

+44 (0)207 457 2020

About GLI Finance

GLI Finance (www.glifinance.com) is a specialist provider of finance to small and medium sized enterprises. Its ordinary shares are quoted on the AIM and its issued zero dividend preference shares are listed and traded on the main market of the London Stock Exchange (tickers GLIF and GLIS (Ord) and GLIZ (2019 ZDP)). Loans are provided to SMEs through a variety of finance platforms in which GLI has an equity stake.

The platforms in which GLI Finance is invested vary by geography, industry, size of lending and by type of lending. They include UK and US SME Lending, Offshore Lending, UK and European Invoice Discounting, Supply Chain Finance, Global Trade Finance and UK Property-Backed Lending.