A little over a year ago, online second-hand watch seller Watchfinder had a growth problem.

“Our barrier to expansion was a lack of stock – we had less than a month’s worth,” said founder Lloyd Amsdon, who had sold more than £140m worth of pre-owned timepieces since launching the Maidstone company in 2002.

“We were selling our entire inventory every month which put massive constraints on us.

“In the pre-owned sector, if the product isn’t there then people can’t buy it. We were investing company profits in stock but we could never get far enough ahead. It was going to take three or four years.”

That all changed last September, when it attracted a $10m (£6.2m) investment from two private equity firms to improve stocks, marketing and its servicing centre.

Since the investment, the company has seen turnover grow from £15m to £36m last year and expects to reach nearer £70m this year.

The banks are happy to give them more debt to help them open four more stores by the end of the year, adding to its shops in Bluewater and Royal Exchange shopping centre in London.

“A lot of small business don’t think of looking at private equity,” said James Bullock, partner at Maidstone law firm Brachers, who specialises in private equity deals.

“The problem is it’s had a lot of bad press over the years because the sort of stuff that makes the headlines is when private equity firms buy shares in a company and then strip it down and get rid of the bits that are not performing well.

“That is not the private equity we see in this marketplace. We see it create opportunities.”

Private equity investment is available for a variety of companies.

Entrepreneurs may be looking for money to launch their business concept, so-called seed capital, which is a low-value high risk investment for funds.

At the other end of the spectrum, the executive team of a mature businesses may be looking for cash to fund a management buyout. In the middle ground a business might need cash to invest in more stock or new premises.

“If your business is a good prospect, the private equity firms will be all over it..." - James Bullock, Brachers

“If your business is a good prospect, the private equity firms will be all over it,” said Mr Bullock. “They want to get their money into companies.

“You want to get a private equity firm which can bring experience to your company. What they bring to the boardroom is important.”

One such group is Business Growth Fund (BGF), a £2.5bn pot backed by Barclays, HSBC, Lloyds, RBS and Standard Chartered.

It was set up to get the banks lending to small companies again and has invested £500m since it was launched in 2011. About half of that has been invested in the last year.

It looks for profitable companies with a turnover of at least £5m a year but crucially only ever takes a minority stake in the business and is happy to wait 10 years for a return on its investment.

Most other private equity firms look for a majority stake and typically run for a maximum of five years.

So far the only Kent firm it has invested in is packaging company Plastique in Tunbridge Wells, which received £5m in July last year. It allowed the firm to double the size of its manufacturing site in Poland.

Yet such a lucrative investment is not easy to come by.

“The key thing is separating the good businesses from the bad and that is difficult when they are very small,” said BGF investor Joe Wilson, who looks for opportunities in the South East.

“We are looking to make 30 to 40 investments a year so we have to be targeted about how we spend our time.”

Mr Amsdon said: “We went out into the market three years ago to find out how private equity works. It takes a long time.”