VFS Legal Funding – which provides costs advance and disbursement funding to law firms – has secured a new £20m funding facility from OneSavings Bank.
The company has also “significantly increased” its capital base from both existing and new investors, as well as introducing a “strong level” of new mezzanine funding.
VFS founder and CEO Norman Kenvyn said: “This initial facility from OneSavings Bank, 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.”
When it started life in 2011, VFS was funded by a mixture of equity, loan notes and peer-to-peer funds via ArchOver, but Mr Kenvyn said the company took the view that the time was right to work with a bank “that shares its vision and recognises the opportunity that exists”.
There is a growing number of options for law firms looking to borrow against bills that have been served, or on work in progress, with VFS, Novitas and newcomer SpectraLegal, which is backed by a major Canadian legal financier. Mr Kenvyn said VFS has provided funding against £50m worth of bills to date.
ArchOver CEO Angus Dent described VFS’s expansion as a “brilliant outcome” and proof of the value of peer-to-peer lending. “We were there for VFS in 2014 and our innovative funding provided the appropriate solution for VFS to expand,” he said.
“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 crowdlending should work. We have fulfilled our role for both borrower and lenders. This is a case where everyone wins.”