Citywire for Financial Professionals
Stay connected:

View the article online at

Small business loan trust targets 6.5% yield

RM Secured Direct Lending plans to raise £100 million and target lending to small and medium-sized businesses.

Small business loan trust targets 6.5% yield

RM Secured Direct Lending (RMDL), an investment trust specialising in small and medium-sized business lending, is to float on the main market.

The trust plans to raise £100 million through a London Stock Exchange listing in order to expand its lending to small and medium-sized businesses, which it said have been locked out of borrowing since the financial crisis.

It focuses on loans with ‘a degree of inflation protection through index-linked returns’ and will aim to generate regular dividends, with a targeted yield of 6.5% once fully invested.

To be eligible for RM loans businesses much be able to demonstrate ‘visibility over cashflow and earnings and strong management teams’ and the loans will range from £2 million to £10 million with maturities ranging from two to 10 years. The loans will be secured against ‘contracted, predictable medium to long-term cashflows’ or physical assets held by businesses.

To ensure diversity of loans there will be maximum exposure limits in sectors and the trust said it had a seed portfolio and a pipeline of loans worth £136 million lined up.

James Robson, chief investment officer at RM Capital, which is the investment manager of the trust, said: ‘Secured lending offers excellent risk adjusted returns in a part of the market underserved by banks and other non-bank lenders.

‘RM has the capability to originate and source loans across a broad range of sectors with robust security packages which offer stable and predictable returns while also enabling the growth and development of well-established SMEs who are the backbone of the UK economy.’

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts

In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.


The Expert View: Kingfisher, Xaar and 888

by Michelle McGagh on Mar 22, 2018 at 05:00

Sorry, this link is not
quite ready yet