Bank launches funding pot for fast growth UK tech firms

Barclays has established a new £100m fund to lend cash to fast-growing technology businesses to help companies accelerate to the next level.

Barclays said it will lend up to £5m, repayable over three years, to technology firms that have secured venture capital financing.

Until now, this type of lending has not been widely available to UK businesses, while in comparison US counterparts have been able to grow rapidly through access to debt finance.

Sean Duffy, managing director at Barclays’ Technology, Media & Telecoms team, said: “Fast-growth technology companies in the US have long been able to access debt finance early in the lifecycle, and some of the most successful US technology firms, including Facebook and Google, have grown their businesses with help from this type of funding.”

It may be an attractive alternative for entrepreneurs who do not want to sell equity and create more efficient capital structure, according to the bank.

Because fast-growing technology firms generally develop much more rapidly than the 15 year average of traditional businesses, this could allow entrepreneurs to retain control of their company’s development and concentrate on accelerated growth.

Ashok Vaswani, chief executive of Barclays Personal and Corporate Banking, said: “We identified a significant gap in the traditional way technology businesses were financed, and with this new drive we will be truly able to support businesses right from their inception to becoming global players.

“Entrepreneurs and SMEs are the life blood of the UK economy and the technology sector is an incredible incubator for many of these talented individuals and businesses. The rapid growth we’ve seen in the UK rivals the activity and dynamism of Silicon Valley with record levels of investment from the US into London-based technology firms in particular.”

There has been a particular boom in financial technology start-ups in London, and investment in this area in Britain and Ireland was $623m last year, more than double the amount in 2013, consultancy Accenture has estimated.

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