Lovey, a UK SME lender and broker, has agreed a senior secured credit facility of up to £250m with Pollen Street Capital. The facility is made up of £50m in committed capital and a £200m accordion, and adds to its existing £35m revolving credit facility with Paragon Bank.
Jack Smith founded Lovey in 2016 as a broker matching small businesses with lenders. It has grown from one person to about 120 staff and says it has arranged more than £600m of loans for more than 11,000 UK SMEs.
In 2022 the company began lending from its own balance sheet. It now runs a hybrid model: customers can borrow directly from Lovey or through its panel of third-party funding partners. The new facility is aimed at growing the direct-lending side.
The deal
The facility is senior secured debt, not equity. Of the headline £250m, only £50m is committed. The remaining £200m is an accordion, which Lovey can draw on later if Pollen Street agrees and the loan book performs.
Because it is debt, the facility does not dilute existing shareholders. This is the usual way specialist lenders fund growth: once an equity base is in place, loan books expand on borrowed money rather than through further share issues. Terms such as pricing, covenants and the advance rate were not disclosed.
The facility adds to the funding lines Lovey announced last year: a £35m revolving credit facility from Paragon Bank and a £10m junior medium-term note programme arranged with LGB Capital Markets. Taken together, the committed and potential capacity across these lines is close to £300m.
Smith said the money would let the company "put more capital behind UK small businesses" and grow its own-book lending. Chief operating officer Kai Hunter said the deeper funding would allow Lovey to offer larger loans to a wider range of borrowers, from businesses that have found it hardest to get credit to well-established firms.
The lender's view
Pollen Street has backed several specialist SME lenders. Investment director Ethan Saggu said almost a decade of broking had given Lovey a clear view of where demand for credit is going unmet. He added that the firm knew "what it takes to grow from brokerage into balance-sheet lending".
The deal is one of a series of large debt facilities for European specialist lenders this year. Pollen Street has also provided €120m to Lithuania's InSoil, and Paris-based Aria has set up a €240m facility for invoice financing. In the UK, equipment financier equipal and consumer lender Plend have both raised forward-flow or credit lines.
What's next
The main question is how quickly Lovey can draw down the committed £50m and qualify for the accordion. That will depend on loan-book growth and credit performance.
The facility comes as small firms face pressure on revenue and costs, and as the government sets out measures for SMEs around the Budget. For non-bank lenders with their own balance sheets, a gap in bank lending to smaller businesses is the market they are counting on.
Original source: EU-Startups — https://www.eu-startups.com/2026/10/british-sme-lender-lovey-secures-up-to-e298-million-to-support-uk-companies/
:max_bytes(150000):strip_icc()/GettyImages-10535138361-0fb67d6164144c0783d240a4ecd86515.jpg)
