DF Capital (DFC) is a specialist SME (Small and Medium sized Enterprise) lender and personal savings bank operating in the UK. It secured permission to commence deposit taking at the end of September 2020 which has allowed it to successfully replace more costly wholesale funding with retail deposits. Having navigated the impact of COVID-19 with aplomb so far, the Group’s recent capital raise doubled its lending capacity and we expect it to grow its loan book at pace. With an efficient business model, DFC is initially concentrating on its inventory finance product to secure run-rate profitability during Q4 2021, but holds the promise of supporting a poorly served market with the addition of new, longer term loan products in adjacent segments. Our scenario analysis suggests that one additional product could add at least 12% to our FY 2023E earnings estimate.