UK-based Allica Bank has secured £55 million in additional funding, taking total funding raised to £285 million.
Of the £55 million, £30 million is a Tier 2 capital facility from British Business Investments, a wholly-owned commercial subsidiary of the British Business Bank, which Allica can draw on as required.
The remaining £25 million is equity funding, secured from existing investors Warwick Capital Partners and Atalaya Capital Management, both of which led the challenger bank’s £110 million Series B fundraising in November 2021.
During 2021, Allica grew its SME lending to £560 million, while deposits reached in excess of £800 million by the end of the year.
According to its forecast, the bank will complete £3 billion of lending to UK SMEs over the next three years.
Richard Davies, CEO of Allica Bank, said: “The new facility from British Business Investments, alongside further equity from our existing lead investors, will enable Allica Bank to support and scale even more of Britain’s established SMEs and growth companies at a time when SMEs are looking for more tailored support from their bank.
“Looking ahead, we are hugely excited about our plans to develop Allica’s customer proposition as we continue our mission to reimagine relationship banking for SMEs.”
Towards the end of last year, Allica Bank acquired a £0.6 billion SME lending portfolio and 2,000 SME customers from AIB Group, following its decision to withdraw from the UK SME market.
The deal brought forward Allica Bank’s target profitability date to the middle of 2022 upon completion.