Lloyds TSB Commercial Finance, a subsidiary of the high street bank, has bought the financial outsourcer CashFriday for £10m.

Under the terms of the transaction CashFriday, which has a net asset value of £2m, will operate as a subsidiary of Lloyds TSB Commercial Finance.

Lloyds and the Gloucester-based CashFriday hope the deal will create growth in both companies.

CashFriday MD Tom Atkinson said: ‘A number of potential buyers have shown interest in CashFriday over the last year, owing to our strong product and market position. Our relationship with Lloyds TSB Commercial Finance will allow us to continue to gain market share in our chosen sector, while benefiting from the support of a major financial institution.’

Lloyds already provides factoring to the recruitment industry, bringing £900m of working capital to more than 600 clients.