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£20m facility to facilitate VFS Legal Funding expansion

18th Apr 2016 | Corporate Finance

VFS Legal Funding (VFS) provides finance solutions to the legal sector.  From inception, just over 4 years ago and funded by a mixture of equity, loan notes and P2P funds via Archover, VFS has built a strong portfolio of quality receivables across a range of law firms.

On the back of the growing loan book and increasing demand, VFS took the view that the time was right to work with a bank that shares its vision and recognises the opportunity that exists.

Working with Asgard Partners to put the correct structure together, VFS secured an initial facility of up to £20m from OneSavings Bank (OSB) to finance further growth and development.

Reduce costs for maximum growth

In addition, VFS increased their capital base from both existing and new investors.  They also introduced a strong level of new mezzanine funding which, in conjunction with the OSB facility, enables VFS to reduce its costs whilst positioning the company to maximise the growth of its business.

Norman Kenvyn, VFS Founder and CEO, added: “This initial facility from OSB, in conjunction with our strengthened capital base, will enable VFS to move forward at a more rapid rate and to help fill the funding gap for our clients in the legal profession.  Our unique product range is regulatory compliant for the law firm and we are now ideally positioned to accelerate our growth and further develop our reputation as a company that delivers.  We are very optimistic about the future.”

Speaking on behalf of OneSavings Bank, Steve Attree, Head of Secured Finance, said: “We are delighted to be involved with VFS and provide a competitive funding structure that should enable VFS to increase its profitability and take advantage of the growing market.  We are pleased to have the opportunity of working closely with Norman and his team and supporting the continued expansion of the business.”

Innovative funding

Commenting on the deal, Angus Dent, ArchOver’s CEO, said: “From our point of view this is a brilliant outcome. We were there for VFS in 2014 and our innovative funding provided the appropriate solution for VFS to expand.  We are pleased because it supports our original assessment that VFS was a solid company worth backing.  It is also a perfect illustration of how P2P crowd lending should work.  We have fulfilled our role for both borrower and lenders.  This is a case where everyone wins.”

Stuart Stevens of Asgard Partners, corporate finance advisers to VFS, noted: “With the backing of substantial capital and funding, VFS is now ideally placed to build on its excellent market position and take the business to the next level.”

Our Banking and Corporate Teams advised VFS on the facility. Associate Solicitor, Jessica Swindells, carried out much of the banking work and Adam Rayner, an Associate Solicitor in the Corporate Team, advised on the company law aspects of the transaction.  Jessica said: "We have worked with VFS for a number of years and are delighted to have advised on this new facility.  It should help VFS to continue to build its portfolio and grow its business." Adam added: "It was a pleasure to work with VFS on this transaction and I look forward to the exciting future ahead for the business."

For more information, help or advice please contact Adam Rayner on 0191 211 7962 or email [email protected].

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