British Business Bank commits further £40m to Harwood Private Capital

The British Business Bank has committed an additional £40m to Harwood Private Capital to increase access to flexible growth finance for smaller businesses across the UK.

The investment supports the first close of Harwood Private Capital UK Fund II, bringing total commitments across the fund and its associated co-investment vehicles to approximately £120m.

The fund will provide tailored debt financing to smaller and lower mid-market businesses, supporting expansion, acquisitions and shareholder transitions, particularly for companies seeking alternatives to traditional bank lending or private equity investment.

The latest commitment increases the British Business Bank’s total investment in Harwood to £75m, following an initial £35m commitment to its inaugural HPC UK SME Fund in 2020.

Harwood Private Capital specialises in providing flexible debt solutions to UK lower mid-market businesses, including founder-owned and family-run companies looking to grow while retaining ownership control.

Its first fund has supported businesses across a range of sectors, including digital technology, clean energy supply chains, manufacturing and tourism.

The additional funding aligns with the British Business Bank’s objective of addressing gaps in the availability of growth and scale-up capital, particularly for smaller businesses that may struggle to secure suitable financing from traditional lenders.

Adam Kelly, Managing Director, Debt & Regional Funds at the British Business Bank, said: “Many smaller businesses continue to face challenges accessing the flexible growth capital they need to scale, invest and realise their ambitions.

“Harwood has developed a strong track record of providing tailored financing solutions to UK SMEs, particularly those that have not been backed by private equity.”

He added: “Our commitment will help increase the availability of growth capital for businesses, support economic growth and create jobs throughout the UK.”

An example of Harwood’s investment approach is Western Marinas, a Wales-based marina operator supported through its inaugural HPC UK SME Fund.

Harwood provided funding to restore marina facilities in Wales and South West England, helping to revitalise local infrastructure and support economic activity in surrounding coastal communities.

The investment has contributed to safeguarding local employment, supporting family businesses and attracting visitors to the region.

The British Business Bank said the latest commitment would help extend this approach to more businesses across the UK, providing capital for investment, expansion and ownership transitions.

Haseeb Aziz, Managing Partner at Harwood Private Capital, said: “The British Business Bank has backed Harwood Private Capital since our first fund, and this renewed commitment reflects the strength of that partnership.

“Founder and family-owned businesses are the backbone of the UK economy, yet many are still underserved by traditional lenders whilst wishing to maintain ownership control.”

He added: “The £120m of committed capital allows us to keep providing the flexible, partnership capital these businesses need to grow, make acquisitions and manage ownership transitions on their own terms.”