Capitalflow's £300m investment fund set to boost Irish companies
A new cross-border commercial business lender has launched a £300m investment fund aimed at small and medium-sized companies.
Capitalflow Commercial Finance, which employs 22 staff in Belfast and Dublin, is headed up by chief executive Harry Parkinson, who formerly led Northern Bank's invoice finance operation in Belfast before setting up Close Brothers Commercial Finance in 2007.
Since it began operating in April, Capitalflow, backed by London-based equity fund specialists Pollen Street Capital, has already lent £20m to businesses in Northern Ireland and the Republic through a mixture of asset finance, invoice finance and asset based lending.
Mr Parkinson said that last month's Brexit vote was having an impact on companies' investment plans.
"In our asset finance division we've seen people who want to change equipment, but are concerned about investing in plant and machinery when there is such uncertainty.
"The traditional Northern Ireland SME has a focus on exporting to the Republic, and there's a great deal of cross-border trade which has been encouraged by both governments with the establishment of cross-border bodies. That trade could prove challenging because of the uncertainty about border controls.
"However, the companies we deal with are used to adapting to market conditions. If the Republic of Ireland market is affected then they will switch their focus to Great Britain, or other markets. They're resilient."
Mr Parkinson said he wasn't concerned that the Brexit result would affect the growth of his new business: "There is a massive gap in the market for so-called 'alternative' lenders and the appetite for borrowing is there. Our focus is on asset and invoice finance but we're also offering asset based lending (ABL) directly against property and inventory. This is unique to the marketplace.
"We will lend to a broad spectrum of SMEs, including start-ups and early stage operators as well as established businesses. It's a case of looking at the potential of a business and making a decision on that basis.
"We've got great support from Pollen Street Capital, who see this market as a huge growth opportunity. We're in this for the long haul and we think we can make a big difference to how businesses here are funded. We have an initial £300m in the funding pot, but our ambitions don't end there, we have serious plans for continued development."