Growth Credit in the North – An ‘untapped’ capital source?

Earlier this year finance leaders of two of the North’s most exciting tech businesses, Voly and Talion, told a major investment conference why they partnered with our £80 million regional Growth Credit Fund.

Palatine Growth Credit launched in 2024 to help companies in the cyber, fintech, SaaS, health-tech, med-tech, AI and advanced manufacturing sectors in the burgeoning technology ecosystems of the North, Midlands, South West, and the South East super-charge their growth.

Crucially, founders, who have typically already attracted a first round of VC investment, can almost eliminate further equity dilution, if their businesses qualify for Growth Credit finance.

James Holland, Chief Financial Officer of Wakefield, Yorkshire-based cyber security innovator Talion explained: “It’s a very attractive and flexible option for us, and has allowed us to focus on growing the business without diluting equity.

“We were seeing strong ARR, but still running at loss, having Palatine come in was a sign of our growing maturity as a business too, and bred confidence that our business plan is sound.”

He believes too that by accessing finance from Palatine, rather than from the existing investor, the founders will be able to achieve a better valuation in the long term.

“Palatine were able to come and lend against the delivery of our forecast with a very flexible, tranche-based structure, which has meant we’ve not paid interest on the funds we’ve not drawn down.”

Steve Evans from Voly, a tech solutions provider to the global yachting sector based in Cheadle, Greater Manchester, agreed: “As a growing business it was definitely a positive for us to be able to test the debt market rather than go back to our investors.

“The Growth Credit funding we have accessed has helped us with our buy and build strategy. While our investors would have funded the acquisitions we’ve done, the management team didn’t want to dilute.

“Speaking generally, I think if you’re a growing business and have one eye on an exit, having some debt in the business and showing you’ve been able to service it puts you in a good place – it really is a sign of maturity.”

Steve and James were speaking at a break-out session at the Rainmakers Conference in Manchester, which attracted more than 400 business leaders, investors, lenders, advisers and lawyers to the event.

James said another attractive element for Talion was that the process of raising the growth credit funding was “much less of a distraction” for the senior leadership team: “I’m sure we’ve all heard horror stories about trading falling over during equity raises because everyone is so pre-occupied by the process, but this wasn’t the case here as it was largely led by the finance team.”

Both he and Steve agreed though that good communication with existing investors in their businesses was “absolutely essential” during the deal process.

James said: “You have to take them on the journey with you – or you risk having very awkward conversations when you spring something on them with no warning – it can be a car crash!”

Steve said: “I totally agree – there’s a whole community of stakeholders to manage. In our case at Voly the process with Palatine was quick, only five or six weeks, so despite being pretty focused on the deal, communication was something we couldn’t overlook.”

The session, ‘Growth Credit in the North, An Untapped Capital Source’ was hosted by Palatine Growth Credit Managing Partner Will Chappel and Partner, and Head of North, Ryan Sorby.

Will said: “We are very grateful to James and Steve for sharing how we have been able to support the growth of Talion and Voly.

“We know there are many more exciting, maturing, high growth companies in the UK regions who could benefit from Growth Credit funding and we have an great pipeline of deals for 2025.”

Watch the full session here.