RM Secured Direct Lending PLC (LON:RMDL) said it has received an increased allocation from the British Business Bank under the Coronavirus Business Interruption Loan Scheme (CBILS).
The investment trust, which specialised in secured debt investments, said its debt fund was initially granted an allocation of HM Government Guarantee capacity in August 2020 which has now been fully deployed into businesses in RM Funds' focus areas, representing around 11% of the company's net asset value (NAV) as at December 31, 2020.
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Delivered through the British Business Bank’s accredited lenders, CBILS is designed to support the financing of smaller UK businesses (SMEs) during the coronavirus (COVID-19) outbreak. The scheme enables lenders to provide loans of up to £5mln while the government provides a Business Interruption Payment option whereby the first 12 months of interest on the loan and some upfront costs are paid by the government. All CBILS loans also benefit from a UK Government Guarantee protecting 80% of the principal and 100% of the first year's interest.
RM said it also expects to continue deploying into its existing high-quality pipeline following the increased allocation, adding that to date it has funded four loans via the CBILS including a two tranche senior secured loan to support the development of a high quality 72-bed purpose-built care home as well as another senior secured loan to a business specialising in providing retrofit energy efficiency measures.
"We are delighted to have received an increase to our allocation under the CBILS scheme. Not only does this enable us to support British businesses impacted by Covid-19 but which meet our strict investment criteria, the Government guarantee acts as a strong credit enhancement for any eligible new loans which can be facilitated under the scheme", RM’s chief investment officer James Robson said in a statement.
Shares in the company were steady at 88.5p in early deals on Monday.