NatWest and BBB back Capital on Tap with £200m facility

NatWest provided a £200 million facility to Capital on Tap, with the British Business Bank backing a portion of the senior commitment under its Enable Guarantee programme, Alternative Credit Investor reported Nov. 9.

Capital on Tap has lent to UK small businesses through a business credit card since 2012.

More than 300,000 customers have used the card for around £40 billion of transactions.

The facility will let the lender keep extending credit to them.

For credit committees that buy or lend against UK SME card receivables, the guarantee changes which piece of the exposure they are pricing. Lenders in the programme pay a fee for a government-backed guarantee on defined portfolios of debt finance, so part of the exposure is guaranteed and the rest stays with the lender. The due-diligence question is how much of Capital on Tap's book sits inside the defined portfolio.

As of October the programme had completed 23 transactions across 16 delivery partners and supported more than £7 billion of lending, the British Business Bank said.

“We're enhancing the funding NatWest can provide to Capital on Tap, which in turn unlocks additional lending capacity for smaller businesses, helping them manage their working capital needs,” said Reinald de Monchy, chief banking officer at the British Business Bank.

The guarantee covers “a portion” of the senior commitment and “will help to support increased access to SME lending through credit card receivables across the UK,” NatWest's George Ross said. The size of that portion was not disclosed.

The transaction follows the British Business Bank's anchor commitment to Beach Point's SME fund at its £65.7 million first close, as Private Wealth Daily previously reported.