Barclays has launched a £100m fund to offer fast growing technology business three-year loans to propel their development.
Tech firms deemed innovative by Barclays will be able to borrow up to £5m, rather than having to raise funds through spending capital, external investment or selling equity.
This opens up the option of debt finance to UK businesses in need of funds, whereby they raise money through bonds and borrowing with the proviso that the creditors receive the money back with interest.
This option has been open to US business for some time, but Barclays said that such funding has not been widely available in the UK, and claims to be the first bank to offer such a service.
Barclays said that fast growing companies stand to benefit from debt finance as it allows them to retain control over their equity, meaning that entrepreneurs retain control of their company's direction and can focus on growth rather than consolidation.
Ashok Vaswani, chief executive of Barclays Personal and Corporate Banking, explained that the bank identified a gap in the traditional way technology businesses were financed, leading it to establish the fund.
"This new fund offers a welcome boost to growing UK technology firms, and will provide a catalyst for their development into larger companies. It is part of our plans to deliver the kind of pro-growth financial backing for UK business that US firms already enjoy," he said.
Sean Duffy, managing director of Barclays' technology, media and telecoms team, highlighted how US technology firms like Facebook and Google benefited from access to debt finance in the early stages of their growth.
"We believe it is important for fast-growth technology companies in the UK to be able to access a similar range of financing solutions, including early-stage debt funding, which together with existing equity investment can provide businesses with a more efficient capital structure," he said.
Barclays is not alone in finding ways to support technology businesses that have moved beyond the early startup stages but need more funding and support to grow.
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