Bridging and development non-bank lender, Kuflink, has jointly announced with European Risk Capital (ERC) that it is entering into a £35m institutional debt facility placed by ERC with Paragon Bank.

Secured on a diverse portfolio of bridging and development loans, the revolving credit facility provides Kuflink with strategic access to institutional capital, scalable growth, funding optionality, and a significant alternative source of debt finance.

ERC, headquartered in London, is an investment finance group specialising in structured capital raising and risk funding solutions, with a primary focus on financial services, real estate, and alternative assets. The group has a collective deal volume of more than $15bn (£11.6bn) and has established a track record across a range of asset sectors including non-bank financial institutions, commercial and residential property, regulatory bank capital and alternative credit.

With an initial £35m aggregate size subject to increase, and a flexible three-year commitment renewable annually, the new facility complements Kuflink’s existing lending platform which has originated more than £300m gross loans since its inception.

Kuflink CEO, Narinder Khattoare, suggested the new facility can take the lender to the “next stage in the development of its growth plans”.

“[It] is particularly welcome as it ensures certainty of funding for our introducers and complements our existing, successful Market Place lending platform,” Khattoare said.

“This agreement is the culmination of a lot of hard work, not only from our team at Kuflink but especially at ERC and Paragon and I would like to thank everyone involved for making it happen.”

Managing partner at ERC, Tony Gioulis, said: “Against the current macroeconomic backdrop and challenging market conditions, the facility is a testament to Kuflink’s loan portfolio credit quality, robust underwriting criteria and, in particular, team Kuflink’s resilience and track record, in conjunction with Team Paragon’s product skill and asset class expertise.

“The transaction is consistent with ERC’s strategy of delivering transformative value to UK non-bank originator lenders in terms of committed growth capital and enabling them to access enhanced leverage at a competitive cost of funds, underpinned by our institutional investor base and its broad risk/return credit profile.”

Director, structured lending at Paragon, Jamie Pickering, added: “Paragon is delighted to further our support for innovative specialist lenders by providing Kuflink with a bespoke, structured solution.

“With a strong management team and a positive focus on the UK housing market, Kuflink is ideally placed to achieve their growth plans. I look forward to following Kuflink’s successful progress, and supporting the growth of other specialist lenders, in the years ahead.”

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