BNP Paribas UK SME Debt Fund 1 will invest in senior loans to SMEs with an annual turnover of less than £50m, which are originated via BNPP AM’s SME alternative financing platform.

By utilising proprietary big data technology – together with access to BNP Paribas’ balance sheet and infrastructure – the platform offers SMEs access to a sustainable source of funding.

Stéphane Blanchoz, head of SME alternative financing at BNPP AM, felt that since the financial crisis, there had been a paradigm shift in the market as new funding models had emerged.

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“Banks remain a key feature of the SME lending market and investment funds have traditionally been providing financing in the upper end of the mid-market area, while smaller companies are increasingly accessing finance through fintech crowdfunding solutions or P2P lending.  

“We are targeting SMEs between these two market segments, where there are opportunities for businesses to contribute to UK GDP growth, but where sustainable funding solutions are limited.”

Philip Dawes, head of UK sales at BNPP AM, said the fund represented an extension to its private debt and real assets capability. 

“SMEs continue to play an important role in the real economy in the UK, in terms of employment, growth and innovation.  

“The launch of this fund is, therefore, consistent with our aim of offering impact investment solutions for our clients, by providing sustainable capital solutions to a segment of the market that remains underserved by other financial solutions.”