Spotlight on – our debt funds

10th May, 2021

Mercia is often known as a venture capital investor, but it is our debt funds that have also underpinned Mercia’s strong position supporting growing businesses as they emerge from the effect of the pandemic.

Paul Taberner and the team manage more than £114million of funds on behalf of both public and private sector clients including the British Business Bank and Greater Manchester Pension Fund.

These funds provide term loans of between £100,000 to £1,000,000 to SMEs across the UK, with a particular focus on the North of England.

Having successfully launched a new fund last year, the team has more than £70million of capital to lend and is in a strong position to support the growing number of ambitious businesses located in the UK regions.

The role that these debt funds play in backing SMEs has a much wider impact than simply providing finance. Our debt team play a valuable part in helping support our other funds. Over the last six months the debt funds have supported our venture teams by providing debt finance to the wider venture portfolio. This close partnership is something we often see across the Group with multiple examples of collaboration helping to support portfolio companies.

This collaboration, central to our Complete Connected Capital model, builds our position in the market. Using complementary pools of capital means that we get to see a wider range of investment opportunities and as a result, we are positioned well when it comes to selecting the best businesses to invest in/lend to. Crucially, it means we can offer the right capital at the right time to companies that we invest in, underpinning our role as a true partner rather than just an investor.

 

Complete Connected Capital case study: CurrentBody

In each issue of The Insight we will showcase an example of a company that has benefited from our Complete Connected Capital. This time we shine a light on CurrentBody.

CurrentBody offers consumers clinically proven electronic health and beauty products, with results comparable to those of in-clinic treatments. The Cheshire-based business received original investment from Mercia back in 2018.

Since the initial investment, CurrentBody has expanded its presence to become an authority in the sector, a significant part of which was down to the debt funding provided by Mercia to cope with the higher demand for its products during the COVID-19 pandemic.

Like many online businesses, CurrentBody struggled to obtain the working capital needed to purchase the required stock to operate online, until a term loan was provided to them by Mercia.

The company has seen significant annual growth of c.60% since the initial investment from Mercia, with the UK now accounting for only one-third of its total revenue due to its successful expansion overseas into 50 territories including Singapore, Japan, Canada and Russia.

Operating in a market forecast to be worth c.£107billion by 2024, CurrentBody will look to cement a strong presence in the global beauty market with the backing of Mercia’s debt and equity finance.

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