REDEEM Holdings, the West Lothian-based phone recycling business, is eyeing expansion after securing £7m funding to help it capitalise on the opportunities that are being created by the ever increasing popularity of smartphones.

The long term package provided by Bank of Scotland will give the acquisitive Redeem additional firepower the company could draw on to accelerate growth at home and overseas.

The bank believes Redeem could be set to enjoy a big increase in demand as the introduction of new mobile devices encourages more people to acquire smartphones and the like or to trade up to new models.

Redeem refurbishes used devices before selling them on.

Andrew Sloan, relationship director at Bank of Scotland, said: "With only 10 per cent of mobile handsets currently being recycled each year, the demand for Redeem's services is likely to continue growing substantially as the introduction of the latest gadget or mobile device encourages people to upgrade their technology more frequently."

In October Redeem reported a surge in business following the launch of the iPhone 6.

The company processed around two million phones last year, sourced from 24 countries.

Redeem's chief financial officer Oliver Tedcastle yesterday said the company sees opportunities to win lots more business in the UK and to roll out the formula developed in Scotland in more overseas markets.

He said: "We have been growing our international presence for some time now in Europe after establishing the business here in the UK.

"This facility will allow the business to make significant progress in new markets while at the same time maintaining a focus on our core UK market where we continue to see plenty of opportunities for organic growth."

Redeem has developed plans to move into key markets such as Germany and Dubai and is eyeing early stage opportunities in Canada.

Founded in Scotland in 1999, Redeem has developed operations across Europe, Asia and the Middle East helped by a series of acquisitions.

The company bought two firms in Spain in May last year to help build a significant presence in what it described as a growing market for electronic devices.

In January last year it bought the Cheshire-based Envirofone operation, which acquires used devices direct from consumers.

Redeem also sources devices in bulk from mobile operators and from companies. The client list includes O2 and Standard Life.

The company's chairman, Trevor Bayley, has laid out ambitious growth plans for Redeem.

In September the private equity veteran said Redeem aimed to triple in size and could float on the stock market after securing £15m funding that month from London-based financiers, Praesidian Capital and Connection Capital.

Around 95 per cent of the traded-in devices Redeem handles are data-wiped, refurbished and resold into a growing number of end markets, which include European phone retailers.

Devices are also sold in developing countries where people may want the latest products but not have the money for new devices.

The five per cent that cannot be restored are fully recycled, leading to zero waste going to landfill.

The Redeem business was initially founded by Jamie Rae and David McCabe but the pair sold their shareholdings to a management buy-in team in 2011 with the deal described as being worth "several million" at the time.

Redeem has refinanced an existing facility provided by Bank of Scotland, on terms that will allow it to do more than under the previous arrangement.