BioWorld International Correspondent

LONDON - GE Technology Finance launched an operation in London, opening up a possible new route to funding for cash-starved biotechnology companies. The company will be offering secured loans of between $1 million to $5 million for equipment purchase and working capital to start-ups that are backed by venture capitalists or other professional investors.

This is GE Technology Finance's first European operation, but in the past five years the company's North American unit has lent more that $500 million to emerging technology companies, ranging from development stage to post-IPO.

Ivan Royle, communications director of GE Structured Finance, of which GE Technology Finance is part, told BioWorld International, "We will provide debt financing to emerging companies, partnering with VCs. This is attractive to [investee] companies, which can raise decent amounts of money without having to give over so much equity, and attractive to VCs because they can diversify their portfolios."

Royle said GE Technology Finance is in discussions with VCs to establish relationships, but would also consider direct approaches from companies. "We will be dealing with companies that don't necessarily reach the current parameters on banking loans, " he said. The company is prepared to make loans to start-ups, but Royle said they will have to show some track record.

GE Technology Finance's new operation will be led by Farhaan Hassan, who said loans are not usually available to technology start-ups. "Through our innovative debt solutions we're able to bring a type of funding that's not widely available to young enterprises."

GE Technology Finance initially will serve the UK and Ireland markets, but Royle said it is planned to expand elsewhere in Europe. "Sixty percent of the business in technology financing is in the UK, but we will ultimately be looking for opportunities in the rest of Europe."