Assetz Capital, the specialist SME finance platform, has extended its partnership with Aros Kapital, the fast-growing Nordic financing provider.
Over the next three years, Aros Kapital will invest a minimum of £750m of funding for Assetz Capital to provide UK-based small and medium sized businesses with property-backed loans.
The investment will further expand Assetz’s ability to finance SMEs across a broad range of sectors, including providing SME housebuilders with development finance to unlock housing projects and fund social housing needs.
Assetz Capital and Aros Kapital are aligned in their ambition to support UK SMEs through the provision of specialist, flexible financing options.
The expansion of their partnership demonstrates both businesses’ desire to establish a sizeable presence in the SME finance market well beyond the next three years and support the nation’s post-pandemic economic recovery over the long-term.
Commitment to unlocking SME potential
As part of its 2022 strategy, Assetz has outlined its intention to increase its annual lending run-rate to £1bn.
Its partnership with Aros will help achieve this, with the Nordic firm already demonstrating its support of UK SMEs through the provision of finance to Assetz Capital to fund lending through the Coronavirus Business Interruption Loan Scheme (CBILS) over the last two years.
With the CBILS and consequent Recovery Loan Scheme (RLS) starting to wind down, the partnership will underpin the growth of Assetz’s lending to SMEs going forward.
The additional funding will enable Assetz to offer a market leading breadth of products, with loans ranging from £150,000 to £20m at record low rates for SMEs, putting the business in direct competition with challenger banks while retaining the flexibility needed to provide funding where banks are unable to.
The funding will help facilitate the provision of commercial mortgages to SMEs, particularly within the highly important care and supported living sectors, and will enable Assetz to continue to support the reinvigoration of the SME housebuilder market via development finance loans.
This, in turn, will help meet national targets and address the current housing crisis, as well as satisfying demand for more energy efficient homes produced by SME providers who are often more proficient in the use of modern methods of construction to ensure more eco-friendly results.
To date, the Assetz group has funded £2.5bn of new housing – equating to 16,000 new homes – through its partnerships with retail and institutional investors, supporting 1,110 SMEs across the country.
Aros Kapital provides loans, invoice financing and leasing for SMEs, working with the European Investment Fund (EIF) to expand its reach in the Nordic countries. The business’ relationship with Assetz Capital is part of its strategy to expand into the UK SME finance market.
Stuart Law, CEO of the Assetz group, said: “We’re thrilled to extend our relationship with a long-term partner that matches our passion for supporting SMEs through provision of innovative finance solutions.
“Like us, Aros is keen to be at the forefront of providing financing for businesses seeking to address important challenges, including encouraging the use of modern methods of construction for housebuilding to ensure improved environmental sustainability and meet broader market needs.
“We believe this relationship will be instrumental in ramping up our funding lines and meeting our objective of funding a quarter of all SME new-builds over the long term.”
Gustav Rocklinger, CEO at Aros Kapital Limited, added: “We are delighted to be extending our relationship with Assetz Capital following the success we have had over the last two years, providing hundreds of millions of pounds worth of funding for UK SMEs through the CBIL scheme.
“We see this as a long-term partnership based on a mutual desire to support SME growth in the UK and promote innovation in key sectors such as housebuilding and are excited to see what we’re able to achieve together going forward.”
In light of Russia’s invasion of Ukraine and the terrible humanitarian crisis unfolding in the region, Aros Kapital and Assetz Capital are committing to make donations to relief organisations out of profits of their continuing partnership.
