Sean Brophy
- Tell me more about Triple Point’s Direct Lending team
Triple Point supports SMEs and businesses around the UK who fall into the missing middle between traditional banks and smaller financial institutions. As such, we provide business-critical funds for a variety of purposes, including mergers & acquisitions, working capital, MBOs, and refinancing.
These types of business loans have largely been neglected by traditional finance providers and banks since 2008, due to a changing risk appetite for these lenders. Yet, direct lending from firms such as Triple Point remains essential for the many SMEs which form the bedrock of our economy.
Our approach is swift, tailored and with an emphasis on building lasting relationships, which has led to us being named as No.3 in the Top 10 list of UK debt providers in MarketIQ’s M&A Review (Q1 2022).
- What is your role at Triple Point?
As Head of Direct Lending I have the responsibility of leading the team into its next growth phase by expanding our portfolio of borrowers, and establishing Triple Point as a market leading finance provider. SME lending is a fascinating market, purely because of the sheer variety of businesses we work with.
We have an ever-growing portfolio of SMEs, many of whom we have been partnering with for several years, while new opportunities to grow the loan book are always on the horizon, especially in the current environment. It is my job to grow our loan portfolio in a balanced manner, ensuring that we add good quality businesses and support existing customers with additional financing and quick decisions when needed.
- How are private lenders funded?
Many lenders in the direct lending space operating in the market have a single funding line – usually an investment bank or other credit partner. This means they are typically lending at variable rates and have less freedom to service a variety of credit opportunities.
Triple Point is different, as we have multiple funding lines, both retail and institutional, which means we can provide a fixed rate for our loans, and fixed returns for our investors. It also results in us being more flexible in building our portfolio and originating new partnerships.
- For what sort of businesses does Triple Point’s Direct Lending team provide loans?
We are sector-agnostic, our borrowers are SMEs with a demonstrable track record and good quality management teams. Loan sizes usually range between £1-10m, which means we are able to cater to both businesses with a smaller turnover, as well as established medium-sized organisations.
- What does the current economic environment mean for direct lending?
There is clearly a growing demand from SMEs for business-critical funding, especially as interest rates increase and banks and variable rate lenders become less competitive. Triple Point operates with fixed rates which means that conditions remain favourable for SMEs looking for capital, no matter the macro-economic environment.
At the same time, we naturally have to apply our own risk parameters to the partnerships we enter and ensure that each deal is evaluated on its own terms. Overall, it’s a busy time for lenders and our portfolio has grown rapidly in recent times, a trend which we see continuing over the coming months and years.
