The combined group, which will provide approximately £400 million annually to clients in both the corporate and professions markets, will continue to trade under both the LDF and First Independent Finance brands, employing some 175 people.

Peter Alderson, managing director of LDF (pictured above) said that customers of both businesses can now benefit from the group’s capability to provide a much broader set of products, all of which are focused on helping SMEs to better manage their cash flow.

“The merger,” he said, “will also make it far easier for SMEs to have all their funding requirements dealt with by one finance partner.”

Alderson added: “as banks’ appetite for lending to SMEs remains somewhat restricted, a substantial lending gap has emerged for small and medium businesses looking to invest in assets to drive growth. LDF and First Independent Finance aim to use their combined reach and size to fill this gap as the major provider of SME finance outside of the banks.”

LDF, founded in Flintshire in 1986, has long been a market leader in short-term loans to the professions market. Since its acquisition from Investec by specialist financial services private equity investor Cabot Square Capital in December 2013, LDF has increased the amount of funding it provides to SME businesses through both its established loan products and a growing presence in the asset finance market.

Funding a broad spectrum of SME capital expenditures, including IT hardware, office refits, manufacturing and engineering equipment alongside plant and commercial vehicles. LDF also provides loan facilities for both corporate and professional firms as a means to manage short-term cash flow.

Ayrshire based First Independent Finance, founded in 1999, is one of the UK’s leading asset finance brokers in a number of sectors including construction, agriculture, transport and renewable energy, financing primarily hard assets such as trucks and heavy plant and construction equipment.

Alderson stressed that he is confident that the new group will combine the core strengths of the two businesses, providing a fully comprehensive finance solution for SMEs across the UK.

“This is a deal for growth, and a natural fit for both LDF and First Independent Finance. Both companies are leaders in their fields, making their combined product capability offering and client base the strongest in the SME finance market.

“While clients will continue to see both the LDF and First Independent Finance (FIF) brands with the associated deal-making skills and the customer service commitment they have become accustomed to, behind the scenes there will also be substantial improvements made as we look to maximise the complementary skill sets of both businesses.

“This deal positions us as the leading hybrid in the SME finance market. Our strong lending capacity and the excellent relationships that both LDF and FIF have amassed with a range of exceptional funders is key to our offering. We see both funding and brokerage as equally important in maintaining our customer service commitment and we will continue to focus resource on both of these areas.”

Allan Ross, managing director of FIF added: “Our expertise in hard assets, combined with LDF’s leading position in the soft asset and loan markets, makes this merger one that will benefit both businesses and their clients.

“SME demand for finance is strong, and this deal gives us the scale to make a real difference in addressing it.”