Cornwall-based lender FOLK2FOLK receives £7M from British Business Investments

Cornwall-based finance firm FOLK2FOLK has received a £7m investment from the commercial arm of the British Business Bank.

The marketplace lender for rural and regional SMEs received the commitment from British Business Investments (BBI), a wholly-owned commercial subsidiary within the British Business Bank group, the UK government’s economic development bank.

Headquartered in Launceston, with offices in Gloucestershire and staff based in other regions, FOLK2FOLK specialises in providing finance to smaller businesses based in the UK regions, helping those who are looking to grow, develop or diversify in the post-pandemic and post-Brexit environment.

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The company has delivered £488m of investment into regional smaller businesses, primarily within the South West, since 2013, and will use the BBI funding to finance loans to SMEs.

In September 2021 FOLK2FOLK announced a £943,000 profit for the first half of 2021 and said it is on course to double profits this year. FOLK2FOLK is now on track for a third straight year of profit after suffering a £535,000 loss in 2018.

The business puts the success down to investors wanting to take advantage of the generous returns it offers and that they are helping businesses which operate in rural areas outside the large conurbations.

Roy Warren, managing director, FOLK2FOLK, said: “We are rapidly approaching half a billion in lending and the addition of British Business Investments as an institutional investor alongside our existing investor base, expands our funding lines and bolsters our position on the financial frontline of support for regional SMEs.

“FOLK2FOLK takes a human approach to lending and reviews every case on its own merits. By taking a holistic approach, we’re able to see the bigger picture and will also consider projection-led proposals.”

Louis Mathers, co-Founder and director, FOLK2FOLK, said: “By focusing on rural and regional businesses, FOLK2FOLK serves an extremely viable but underserved part of the SME landscape.

“Too often, investments overlook businesses operating outside of large urban areas. We founded FOLK2FOLK on the belief that something needed to be done about this regional disparity in funding.

“We felt a greater connectedness was needed between investors and regional Britain, and FOLK2FOLK was founded in early 2013 to be a mechanism to enable this. Together with our investors, we are helping to level the playing field for regional businesses.”

BBI aims to increase the supply and diversity of finance for smaller businesses across the UK, by boosting the lending capacity of a range of finance providers, including peer-to-peer and marketplace lenders.

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It aims to earn a commercial return by investing – through such finance providers – in smaller businesses, pursuing investments on a fully commercial basis without receiving any economic advantage from the Government. Since its establishment in 2014, BBI has committed more than £3bn to providers of finance to UK smaller businesses.

Judith Hartley, chief executive, BBI, said: “British Business Investments is delighted to announce its £7m commitment to FOLK2FOLK. In its recently published Regions and Nations Tracker report, the British Business Bank highlighted the funding issues for regional and rural smaller businesses. This commitment to FOLK2FOLK will help these types of businesses, in the South West and throughout the UK, to access the finance they need to grow and prosper.”

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William TelfordBusiness Editor, Plymouth Live