International SME funder, Bibby Financial Services (BFS), has announced a £300m Pandemic Recovery Fund to support SMEs as lockdown restrictions are lifted in the UK over the coming months.

Available through BFS’s invoice finance products including factoring, invoice discounting, construction finance, trade and export finance variants, the fund can be accessed by new and existing SME clients that trade with other businesses.

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Ian Ramsden, UK chief executive of BFS, said: “We know the tremendous impact the Covid-19 pandemic has had on SMEs and supply chains across the UK over the past year. However, with the vaccine roll-out underway and the UK Government’s four-step “road out of lockdown’ plan underway, there is some light at the end of the tunnel for the economy.

“Now is the time for SMEs to plan ahead so they have sustainable funding in place to enable them to increase stock levels, rehire staff, and take on new business as customer demand starts to return throughout the spring and summer months.”

The fund will be targeted at those SMEs who are trading on credit terms with other businesses, supporting supply chains and those looking to access funding to drive growth.

Recent research conducted by BFS found that 66% of SMEs believe that demand will reach pre-pandemic levels by September, and 76% are looking to invest in staff training (39%), hiring (29%), new tech (33%) and equipment (29%) over the coming months.

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During the pandemic, BFS continued to support new and existing clients, funding more than £6bn of SME turnover in 2020, as well as providing foreign exchange services for businesses trading internationally.

While available to all SMEs, based on current demand, BFS expects approximately 20 per cent of the fund to support manufacturing businesses, 15 per cent to support services, 15 per cent to support construction, 10 per cent to support transport, and 10 per cent to recruitment SMEs. The remainder will be available to businesses suitable for invoice finance in all other sectors.

Ramsden continued: “While undoubtedly government loans have been a lifeline for many businesses, SMEs should start to consider more sustainable sources of funding to coincide with the rebound of demand. We support the recovery loan scheme as we supported CBILs, but this fund will allow us to provide funding to a wider range of businesses as they position for growth.

“Invoice finance is just this, enabling businesses to unlock cashflow tied-up in unpaid invoices. As such, funding grows in line with a business’s sales volumes, which is a much more flexible source of finance than a loan or overdraft.”