Finance provider Frontier Development Capital (FDC) has raised a further £30m from two of its existing investors.
The Birmingham-based company, which has an office in Bristol, supports smaller businesses and property developers nationwide with debt funding of £1m to £20m.
The additional funding comes from British Business Investments, which is a commercial subsidiary of the British Business Bank, and West Midlands Pension Fund. It will increase the size of its FDC Debt LP fund to £105m and bring its total funds under management to £445m.
FDC approved over £141m of investment for SMEs and property developers across the UK in the 12 months to the end of March 2023 – up 76% on the previous financial year.
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Sue Summers, chief executive of Frontier Development Capital, said: “We are grateful to our investors for this additional capital, which will enable us to extend our work in supporting the growth of SMEs. It comes after a landmark year in which we have approved a record amount of investment and joined forces with Mercia, which shares our passion for helping SMEs to thrive through the provision of flexible finance.
“Being part of Mercia will support our future fundraising efforts and help us identify even more potential lending opportunities. We look forward to further growth in the year ahead as we continue to establish FDC as a go-to provider of capital across the UK regions.”
Judith Hartley, chief executive, British Business Investments, added: “Following our earlier commitment to FDC’s Debt Fund in 2020, we are pleased to be making an additional commitment of £10m to the Fund. Our increased commitment allows FDC to support further lending to smaller businesses across the UK, and particularly in the regions.’’
Rachel Brothwood, executive director of Pensions, West Midlands Pension Fund, commented: “We are excited by the opportunity to commit additional capital and be able to contribute to the strategy and FDC growing in strength. The additional capital will enable FDC to provide funding required to support and grow fundamentally sound small and medium-sized enterprises while providing attractive risk-adjusted returns in a manner that is well aligned to our overall strategy and responsible investment approach. The recent partnership with Mercia highlights the growth and future ambition of the business with benefits achieved through synergies and complementary skill sets.”
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