The structured asset finance intermediary and residual value investor will use the funds to expand its business in underwriting asset residual value (RV) risk for bank-owned and captive lessors.

“This facility will allow FAF to originate in the region of £100m of new assets, with FAF providing RV support to lessors through upfront cash investment and market-leading RV insurance,” said Patrick Sherrington, director at FAF.

Established 40 years ago, FAF has been underwriting asset residual value risk on its own account since 2008, originating a loan book of over £250m of assets, including commercial vehicles, waste handling and industrial plant.

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“Vendors’ revenue recognition on the sale of an asset may suffer if they are providing buy-back guarantees,” added Patrick.

“Lessors may be giving up future profits from asset RV upside, and lessees will often face pressure from vendors to upgrade their assets early or take on new assets at the end of the initial lease term rather than extend current leases.

“With our significant expertise and experience in underwriting asset residual value risk, FAF can offer an alternative that delivers real benefits to all three parties.”

Paul Tagg, director at Shawbrook Bank, said: “The team at FAF are experts in their field and their proposition is exactly the type we’re keen to support: giving businesses a credible and compelling alternative source of funding for critical assets.”