Commercial Broker (NACFB Magazine) April 2019

Issue 69 APRIL 2019

Broker COMMERCIAL

The magazine for the National Association of Commercial Finance Brokers

24 MAKING TAX DIGITAL How the new regime will impact you and your clients

36 A SHORT-TERM TIMELINE How the Bridging sector has evolved over a decade

​Meet the Board The engine driving your Association forward

42 DRAGGING UNCERTAINTY Overcoming the barriers to small business finance

52 SPOTTING A SCAM Ways to avoid falling foul of a phishing email scam

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Contents

In this April issue NACFB News

Special Features

4 6 8 10-11 12-14

26-32 34-35

Note from Graham Toy Updates from the Association Lloyds: Broker consultation Industry news round-up Patron news

NACFB: Meet the Board Rivers Leasing:

A detective story 36-37 Central Bridging:

A bridging timeline 38-39 White Oak UK: Financing

Scottish SMEs 40-41 Lloyds: Invoice Finance solutions

Industry Insight 42-43 44-45

FSB: Uncertainly is a drag CETSAT: Developing a cyber-security strategy

Opinion & Commentary 46

34 Case Studies 16 18

Atom bank: King of the castle Hope Capital: Refinancing with CCJs

48 50 52

54

Ultimate: An end to Bans on Assignment Shawbrook: HMO licensing Kuflink: Secret to growth Listicle: Identifying phishing scams Five minutes with: Caroline Luxmore, Head of Commercial Mortgages – Aldermore

Close Brothers: Long-standing collaboration

24

Jayne Simpson: Making Tax Digital

33 Eastcheap | London | EC3M 1DT Kieran.Jones@nacfb.org.uk

RUTH DUNN Magazine Advertising T 0845 0043169

Magazine@nacfb.org.uk

Lead handling guide

Ask the Expert

KIERAN JONES Communications Manager & Editor

33 Eastcheap | London | EC3M 1DT Laura.Mills@nacfb.org.uk

Compliance Update 22-23

Further Information

LAURA MILLS Magazine Production Assistant

Patron Profile 20-21

40

MACKMAN Design & Production T 01787 388038

38

mackman.co.uk

NACFB | 3

Welcome

Graham's Note

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s we emerge from the dark evenings and with spring making its mark, I would like to provide you with a sense of some of the content in this edition. You will know that refreshing and improving the governance and leadership of your Association has been a key objective. We now have your new Board in place and already there has been a material change in emphasis at our Board meetings. I hope that many of you will have seen the briefing notes that are being produced so you know more about what is being discussed and how we are working to futureproof this industry. The focus is much more strategic, and the quality of debate demonstrates the value in taking time and care selecting Board Directors from a diverse background of sectors and organisations. In this edition I want to introduce the Board to you, so I hope the article provides some colour to the personalities who now make up the Advisory Board.

Graham Toy CEO | NACFB

I am also pleased to highlight the opinions of the Federation of Small Business. We are a member of this trade body and use some of their services to help run the Association. They are to be congratulated on achieving a profile in the media on many matters that impact you and your clients. This is one of a series of articles from trade bodies which complement our sector.

You will also see that we have invited IT experts, CETSAT, to contribute their thoughts on the world of cyber security, a risk which is escalating in importance across the commercial environment.

Historically I feel sure that most business owners were happy to leave this rather rarefied and technical issue to the experts and take comfort from their assurances. Time and again we are seeing evidence that this is becoming, and looks to remain, a significant risk which needs to be prioritised with more involvement and understanding from business leaders. As the level of cyber security sophistication escalates, we all need to balance our increasing demand for IT speed and agility with the need to keep our businesses and our customers safe.

4 | NACFB

A full house.

From bridging to buy-to-let, play your best hand with our broad range of property finance.

Call us on 0203 846 6809 or visit intermediaries.lendinvest.com. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929).

ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.

NACFB News

Association updates for April 2019

NACFB news round-up Introducing our standardised Bridging Finance Enquiry Form The NACFB has made available a standardised Bridging Finance Enquiry Form, for use by brokers introducing short-term bridging loans to lenders. The form, available to download via the NACFB Compliance website, aims to increase the quality and consistency of client information a broker passes on to a lender.

The launch of the Bridging Finance Enquiry Form follows calls from brokers, lenders and suppliers to ensure that there is greater uniformity and depth of data from the outset.

Speaking of the template document’s introduction, NACFB managing director Norman Chambers, said: “One target for the Association has been to raise professional standards in the short-term sector.

“This form has been designed with the support of some of our short-term funders, as maintaining quality and professionalism in the sector, ultimately, benefits us all.”

You can find out more and download the new template document via NACFBCompliance.co.uk

Download the official show app for CFE2019 Returning for a second year, delegates at this year’s NACFB Commercial Finance Expo can once again download a dedicated event mobile app to make the most of their visit.

The free app, called CFE 2019, can be downloaded via the CFE website or directly from the Apple App, and Google Play, stores.

6 | NACFB

Once downloaded attendees can plan their day by viewing a full list of exhibitors and book one-to-one meetings with the exhibitors of their choice. The app will also allow you to access the conference agenda, view speaker biographies, and review a digital floorplan – enabling you to navigate the show with ease.

The mobile app also enables attendees to submit questions and comments 48-hours in advance of both the Panel Discussions and Meet the Expert sessions.

The free event is open to anyone with an interest in commercial finance and 2019’s event will host a wider spread of exhibitors than any previous year. Register today via commercialfinanceexpo.co.uk

250 brokerages register for findsmefinance Since the launch of the Association’s enhanced online portal, findsmefinance, over 250 brokerages have signed-up to the lead generation platform.

The free directory enables UK businesses seeking finance to simply filter their funding requirements by loan size, type and location and are then presented with a range of NACFB commercial finance brokers to approach.

The platform is available to all SMEs and provides exclusive access to NACFB broker Members with the aim of offering an alternative route to finance for businesses that may have been turned away elsewhere.

All full and authorised NACFB Members are eligible to sign-up to our new platform and can do so in minutes – with approval taking less than 48-hours.

NACFB brokers can register today via findsmefinance.co.uk/join

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helping you fund UK business Welcome to the NACFB’s targeted lead generation platform: findsmefinance UK businesses seeking finance can filter by loan size, type and location and are presented with a range of NACFB brokers Each NACFB broker has an updateable online listing and can monitor SME engagement through analytical data Register today:

findsmefinance.co.uk/join findSMEfinance is a trading style of NACFB Member Services Ltd which is authorised and regulated by the Financial Conduct Authority 734857. We are a broker, not a lender.

Note from our Sponsor

We ask our brokers – what would make our service even better?

Confirmed enhancements include an extended broker proposition and the roll-out of a dedicated digital portal

Andy Bishop National Director of Business Development SME Banking Lloyds Bank

I

n response to an in-depth broker survey, we have further enhanced our proposition to better support brokers and make it easier to do business in 2019 and beyond.

The research, carried out in the form of in-depth interviews and a survey with around 100 brokers, provided valuable insight into what brokers see as their main challenges and opportunities.

As part of the survey, brokers were asked to outline what mattered to them most in their relationship with a financial provider. Speed, transparency and flexibility came top of the list. Unsurprisingly given our industry, trust and quality of relationships with their business development manager were also of great importance to brokers, as well as having one named point of contact. When developing our new broker offering for 2019, we made sure these core challenges were a priority.

Technology is one way to help provide transparency and automate the more administrative tasks which tend to slow down applications.

In addition to a desire for quicker and simpler processes, brokers expressed an ambition to learn even more about Lloyds Bank products and indicated they would welcome education through supporting materials, their business development manager and relevant events.

8 | NACFB

Extended broker proposition In response to demand from brokers who are now working with corporate businesses across a range of products, we are extending our broker proposition to businesses with an annual turnover up to ÂŁ100 million, initially through selected brokers. The extension will include commission payments for overdraft and loan facilities, Invoice Finance and Asset Finance reflecting the large increase in brokers who deal across multiple products.

Brokers looking for simple and speedy decisions The research highlighted that a key challenge for brokers was being kept up-to-date with the status of a deal. Some brokers also reported feeling confused about decisions made and would appreciate more transparency and greater consistency in this area. With this in mind, we set out to find a solution that would simplify processes without compromising integral and long-standing relationships between brokers and business development managers.

Dedicated broker portal We are developing a new broker portal which will speed up decisions and give brokers a better line of sight to deal agreement. The dedicated portal will address key broker challenges highlighted in the Lloyds Bank survey, and show useful information at a glance, such as the status of deals and decisions in principle. Response from brokers was positive, with over a third of brokers saying they would use the portal for smaller and simple deals. The proposed portal will further enhance existing relationships with their business development managers where the majority of brokers highly value their trusted relationships by telephone and face-to-face.

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Industry News

Industry News 3. Number of new tech start-ups rises

1 1. Finance firms given 15-month regulatory grace in event of no-deal

Data from Companies House shows that there was a 14% rise in the number of new tech companies launched in the UK in 2018. In total there were 11,864 software development and programming businesses incorporated in 2018, up from 10,394 companies the year before. London had the highest number of tech start-ups with 4,752, a rise of 14%. Last year, tech firms in London raised £1.8 billion in venture funding and public listings.

The FCA and the Bank of England will give banks, asset managers, insurers and brokers until mid-2020 to fully comply with rules that replace EU law in the event of a no-deal Brexit. Publishing a ‘near final’ version of a rulebook that would come into effect if Britain leaves without a deal, in most cases, they plan to allow firms a period of 15 months to adapt.

5 5. Norwegian fund bets on Britain

2. Big investors pour cash into UK investments Data from Bloomberg shows that the UK’s top ten investors – including Invesco, Schroders, Aberdeen Standard and Legal & General – have increased their holdings of UK-listed shares by an average of more than one third over the past three years.

Many investors are taking the view that lower prices mean UK assets are now more attractive, encouraging investors who are confident in the UK’s long-term future to put more money into the market.

2 10 | NACFB

4

Norway’s £740 billion sovereign wealth fund has declared its investment in Britain will increase regardless of the outcome of Brexit negotiations. Tory Eurosceptic Jacob Rees-Mogg said the move “is a recognition that the freer the market in Britain is, the more attractive the country will be to outside investment.” Middle Eastern funds have also increased their exposure to Britain with predictions that a fall in sterling triggered by a hard Brexit could encourage even more investment.

4. Few firms join MTD pilot

6. London top hub for unicorns

Just 20,000 firms have signed up to the government’s Making Tax Digital (MTD) pilot scheme, despite HMRC inviting more than half a million to take part.

The initiative was launched last year ahead of MTD coming into force this month, but just 4% of companies invited to trial the system have done so. However, HMRC also said uptake had jumped since the start of the year.

Figures from London & Partners have revealed that the number of unicorn start-ups in London reached 13 last year, up from eight in 2016. The figure was almost double its closest European rival, with Berlin hosting seven unicorns last year. Venture capital firm GP Bullhound has predicted that London will be home to a quarter of all new unicorns founded in Europe over the next few years.

7. Fresh concerns over skilled worker shortage A new study by the Recruitment and Employment Confederation (REC) has found that an increasing number of employers are worried about a shortage of skilled workers amid falling confidence in the economy. The poll of about 600 recruiters found growing concerns over the availability of skilled staff, especially in engineering, technical, social care and hospitality. REC chief executive Neil Carberry said the survey showed beyond any doubt that uncertainty was damaging for job creation.

7

8. SMEs need more support – Truss Liz Truss, the Treasury Chief Secretary, has said that Britain is risking its economic future by pandering to big business and ignoring start-ups. Ms Truss said the government must review the £20 billion handed to big firms annually. She has also called for simpler taxes, less planning red-tape and more official emphasis on the internet. Ms Truss said: “I don’t want to see government money used to protect old industry and stop new industry starting.”

9. Workers would take pay cut for four-day week A new survey from Zopa has found British workers would take a 7% pay cut if it meant that they could work one less day a week.

Based on the average UK salary of £28,677, this would equate to an average annual loss of £2,000. Some 48% of those workers who receive a bonus would give it up in return for a four-day week.

10 10. P2P sector to be boosted by securitisation A report from credit agency DBRS has identified securitisation as playing a key role in the growth of peer-to-peer lending in the UK and Europe. The study says: “The securitisation market offers marketplace lending participants a valuable tool for lending platforms, or their institutional backers, to obtain funding. The use of securitisation allows marketplace lenders to increase the velocity of their committed capital in order to allow continued new lending and volume growth.”

A bank of knowledge not simply a bank of money Our support for your broker business goes beyond finance. We can connect you with the right people, with the right knowledge, to boost your clients’ businesses and help them grow.

Search: NatWest Brokers

NACFB | 11

Patron News

NACFB Patrons listed in FT1000 Lenders feature as Europe's fastest-growing firms revealed

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ACFB Patrons have appeared in the prestigious FT1000; ranking Europe’s fastest growing companies. LendInvest, iwoca, West One Loans (part of Enra Group), Rivers Leasing Plc (part of Rivers Finance Group), and NACFB partner SmartSearch (part of SmartCredit) all appeared in the list published last month.

Compiled in partnership with Statista, the list showcases companies that achieved the highest compound annual growth rate in revenue between 2014 and 2017. The hurdle to securing a place was said to be higher this year: the bottom-ranked company achieved a growth rate of 37.7%, compared with 34.6% last year.

To be included in the list, companies had to have revenue of at least €100,000 generated in 2014 and at least €1.5 million generated in 2017. Companies had to be independent, headquartered in Europe and revenue growth had to be primarily organic.

Rivers Leasing came in at number 557, having previously ranked at 186th in the first year and 391st in the second year. Recognising their third consecutive ranking, Ratan Daryani, Chairman of Rivers Leasing said: “To feature in the FT1000 is a wonderful validation of all the hard work and careful planning that the team at Rivers Leasing put into everything we do.

“We take a forward thinking and dynamic approach to leasing and asset finance, with many of the team having come from different industry backgrounds. However, we pride ourselves on a traditional approach to due diligence, customer service and the strength of our relationships with stakeholders and brokers. It’s wonderful to see that recognised.”

12 | NACFB

The background checking and anti-money laundering service SmartSearch was one of just 131 companies from the UK in the list and one of ten in the fintech industry.

James Dobson, marketing director at SmartSearch said: “We currently have more than 3,100 customers with around 50 new clients joining every month. And with the 5th anti-money laundering directive stipulating that identity checks should be electronic wherever possible, the demand for our services is only going to increase.”

Other long-standing and recurring names came from a variety of sectors with businesses including Deliveroo, HelloFresh and Blue Motor Finance.

“

The hurdle to securing a place was said to be higher this year: the bottom-ranked company achieved a growth rate of 37.7%, compared with 34.6% last year

Patron News

LendInvest partners with specialist distributor TBMC NACFB Patron teams up with Buy-to-let and Commercial Mortgage specialist

L

endInvest has partnered with Buy-to-let mortgage distributor TBMC to offer its loans through the specialist packager’s broker panel.

Operating in the BTL mortgage market for over 30 years, TBMC are experts in the BTL loan process.

Providing support in the form of acting as the key advisor for brokers with specialist cases, TBMC assists intermediaries with assessing loan applications, and selecting the right lender to finance their client’s project.

The distributor will be offering the full range of LendInvest’s BTL loans, including the lender’s five-year fixed rate products at 3.49%, with the ICR calculated at 5%, and 3.6% with the ICR calculated at the product pay rate.

The partnership comes as LendInvest announces a record month for BTL applications in January 2019.

Jane Simpson, managing director at TBMC, said: “We are delighted to be working with LendInvest who have a very attractive Buy-to-let mortgage proposition: bringing some healthy competition to the market, especially for complex Buy-to-let cases such as HMOs, limited companies and portfolio landlords.”

“TBMC’s Buy-to-let expertise enables us to deliver the right type of business for LendInvest, we anticipate a successful relationship,” Jane added.

14 | NACFB

Ian Boden, sales director at LendInvest, spoke on the partnership: “Over a year on from our launch into the BTL market, the team have succeeded in developing our product proposition into a highly competitive offering. What remains crucial however, is bringing those products to the right customers.

“Partnering with a distributor of TBMC’s calibre will help us to continue to expand our market reach, given the services that they provide to some of the major networks. We are delighted to be working alongside a distributor with their experience and expertise in the industry.”

Earlier this year, LendInvest partnered with mortgage technology specialist Mortgage Brain, rolling out its Buy-to-let product to Mortgage Brain’s customer base of over 22,000 introducers.

“

TBMC assists intermediaries with assessing loan applications, and selecting the right lender to finance their client’s project

They say it takes 10,000 hours to master something, when it comes to bridging loans we have 83,490.

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Case Study

When your client’s home is their castle Working with the broker to find the right deal

Liam Brodie National Account Manager Atom bank

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approximately £250,000 less than anticipated in the original report.

Nevertheless, after our underwriters reviewed the valuation report and re-worked the figures based on business performance and expected trading, we were able to approve an amended loan with a slightly reduced amount. A higher loan to value was accepted whilst still delivering on our promise to the broker and the Dornoch team.

e were recently approached by broker Scott McClymont of Conduit Finance, with a loan application from their client, Dornoch Castle.

Dornoch Castle is a luxury hotel in the Scottish Highlands, owned by the Thompson family. They wanted to reduce their debt and free up some money to fund a refurbishment of the hotel buildings.

Our rates saved Dornoch Hotel a good chunk on their existing debt and allowed them to pull some equity out of the business to refurb their luxury hotel. They also used part of the loan to put some capital behind the artisan gin distillery the owner’s two sons had set up in the grounds of the hotel. Thompson Bros Organic Highland Gin has since gone from strength to strength, and now exports worldwide as well as acting as a draw to the hotel.

We were immediately taken with their business and thought that what they wanted to achieve long-term was exciting and ambitious, whilst being entirely achievable with the right loan. We knew this was a case we could help with and told the broker as such on reviewing the application.

The broker, Scott McClymont, was thrilled with the outcome of the case, and was very positive about the experience. As a bonus, the case won ‘Deal of the Year’ at the inaugural Highlands Business Finance Awards. The case was a success for everyone involved, and really highlights the benefits that a strong relationship between broker and lender can bring to the customer.

The one obstacle that prevented us from making a decision was that Dornoch were a relatively new company. We wanted to make sure that the amount they were asking for was definitely affordable and for this we needed to assess their accounts for the most recent year – at the point of application, this was still two months trade away.

We needed the client to hold fire on the case and resubmit after we could carry out the assessment. Scott McClymont and the team at Conduit Finance were instrumental in keeping the relationship alive during this period. They gave us regular updates and kept their clients interested in our product.

Without this regular contact, it would have been significantly harder to lay the foundations for our relationship with the Dornoch Castle team and keep them interested in us as a lender.

When we got to application stage, the valuation came in at 16 | NACFB

“

They also used part of the loan to put some capital behind the artisan gin distillery the owner’s two sons had set up in the grounds of the hotel

Strong growth from small beginnings Facilities from ÂŁ30k to ÂŁ250k, with no prior experience necessary

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| Auction Finance | Business Finance | Development Finance | | Bridging Finance | Farm & Land Finance |

Case Study

Unpicking a complex deal Refreshing approach to complicated case helps builder with CCJs move fast on refinance deal

Jonathan Sealey Chief Executive Officer Hope Capital

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lients with complicated requirements need a lender who finds the solution without adding to the stress of the situation, and that is exactly what we did for a builder who came to us recently.

He needed funds to refinance an existing debt with another lender and release his investment property from the control of receivers and was being pushed by his existing lender.

There were legal issues too; the solicitors needed to establish whether or not planning permission had been implemented on the property – a barn in Newchurch, near Hertfordshire – or lapsed, as this would impact the valuation and potentially stop the deal from progressing.

The client also had a separate construction company which was party to a dispute with builders. This had resulted in a court case and our client had been forced to inject a lot of his own cash into funding the case. This had taken its toll on his business and cashflow, which is what had led to receivers being appointed.

He also had CCJs that needed settling, which added further complication to the case.

At Hope Capital we have a great deal of experience dealing with cases like this and were able to come up with a solution that allowed the client to refinance his existing debt, taking off the pressure he was under from the other lender, release the investment property from the receivers, and pay off his CCJs. So, after the client submitted a slight change to the planning permission, Hope Capital, was able to provide the loan. By collaborating with the valuer and lawyers and speaking regularly to all parties, 18 | NACFB

we were able to prioritise the funding and provide the six-month funding buffer the developer needed ahead of obtaining a longer-term development loan.

Not only were we able to provide the funding, but we completed the loan – a 70% LTV on a six-month term – within 17 days from when the legal undertaking was in place. And, given that there were some legal complications, it was a very fast turn-around.

As a result of the deal, our client was really pleased that he was able to release the properties from the control of the receiver, while his broker, Michael Fisher from Crystal Specialist Finance was so impressed he has promised more introductions following the success of the case.

Michael said: “It is refreshing to find a lender who looks beyond the obvious obstacles and use their undoubted experience to get the job done. Thanks to the Hope Capital team.”

“

We have a great deal of experience dealing with cases like this and were able to come up with a solution that allowed the client to refinance his existing debt, taking off the pressure he was under from the other lender

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Patron Profile

A collaboration that stands the test of time Ian Aitchison Managing Director Close Brothers Asset Finance

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e’re very proud of our history, because for over three decades – since 1987 – we’ve been working in close partnership with reputable business finance brokers to provide tailor-made finance solutions to UK SMEs across a wide variety of industry sectors, including agriculture, engineering and manufacturing.

There’s little we haven’t seen in this time. Economic cycles have come and gone as have a succession of governments and even Brexit hasn’t knocked us off our stride; we will keep providing finance regardless of the political or economic situation the UK finds itself in.

others issues, their trading conditions, the challenges they face and their ability to adapt.

On the whole, brokers were optimistic about the rest of 2019, with 68% feeling confident about the UK’s economic outlook for the next 12 months. There was, however, a significant minority (32%) of brokers who were not so positive about the prospects for the UK’s economic performance. That being said, the broker market has proved itself to be resilient throughout all economic cycles, with brokers well positioned to ride through any economic turbulence.

We recognise that resilience is hard fought, born of years of experience in the market, with many brokers having decades worth of knowledge to call on. This is strongly reflected in our findings that three in every four brokers currently believe that UK SMEs are quicker to adapt to change than larger businesses.

Our team are experts in the asset finance industry and have a real understanding of key industry sectors along with the knowledge and insight needed to fulfil even the most complex finance requirements.

Brokers are well positioned to draw on their experience to enable SMEs with their expansion ambitions. Our research shows that for 38% of UK SMEs, growth is their main business priority followed by business consolidation, debt reduction, and developing products and services.

We base our lending decisions on the overall health and plans of the business – not just a credit rating. We’re careful lenders too; a decision that fails to take account of risk factors and wider market forces is not in anyone’s interest.

Sentiment on both growth and investment among brokers is very strong. 64% are of the view that their brokerages will either grow significantly or moderately, whilst 52% will be looking to invest to enable that growth, precisely mirroring the sentiments of UK SMEs.

We offer a range of finance products that you are no doubt already very familiar with, including Refinance, Sale and HP back and Regulated Hire Purchase.

Brokers are outperforming the general SME market in terms of their positivity and match UK SMEs’ appetite for investment. Among UK SMEs, 35% anticipate expansion while 57% expect to tread water and stay the same, against only 32% of brokers. Given the crucial role brokers play in the funding mix, this strong need to access funding

by SMEs – as shown by the results – confirms our belief that there remains positive opportunities for brokers.

Our view of the broker market We recently asked finance brokers across the UK about, among 20 | NACFB

“

Brokers also have direct contact with our underwriters, who are efficient at writing agreements for a full range of hard assets and business critical soft assets

How we work with brokers At Close Brothers Business Finance we strive to work in partnership with our brokers at every stage of the process, from receiving the proposal to paying out the deal. With this in mind, we have compiled a detailed process, available on our website, that contains guidelines for the information required when proposing a deal. This ensures we can get an answer for you and your client as quickly as possible.

The guide covers the following key areas: • Proposals – minimum requirements • What we think a weak proposal looks like • What we think a strong proposal looks like • Levels of financial analysis on larger lends • Financial indicators we will consider • What we do differently Not only do we have a national team of broker development managers who work closely with a growing network of business finance brokers, we have our broker sales support and development

team to deal quickly with any day-to-day enquiries our partners may have.

Brokers also have direct contact with our underwriters, who are efficient at writing agreements for a full range of hard assets and business critical soft assets, which helps ensure the decision-making process is swift and efficient. They are always happy to discuss potential deals on the phone, or to accompany brokers to meet prospective leads.

“

On the whole, brokers were optimistic about the rest of 2019, with 68% feeling confident about the UK's economic outlook for the next 12 months

NACFB | 21

Compliance

Working with you to provide opportunity and support Handling leads from findsmefinance and beyond

Nicholas Murphy Business Engagement Officer NACFB

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few months on from launch, we are pleased to see that our new targeted lead generation platform, findsmefinance, welcomes more than a thousand monthly visitors – and is growing daily. As awareness of the new platform continues to be a priority of the NACFB, we want to make sure our Members are best equipped to process and record the leads they receive from the new platform, in addition to any other lead sources.

Part of our remit as your trade body sees us provide opportunity and support throughout the entire broking process. In completely overhauling our targeted lead generation platform, we are confident in our ability to increase your exposure to UK small businesses whilst emphasising the benefits of the commercial broking community as a source of alternative finance. In addition to providing you with leads and expecting no commission in return, the Association’s in-house regulatory support team; NACFB Compliance, is here to impart guidance and assurance when adhering to the rules and standards set by the Regulator.

Our compliance team has mapped a broker and client journey diagram setting out the stages of the broking process and the various points of client interaction in this process, covering your data protection requirements, your treating customers fairly obligations and the recording of the deal on your business register, we see this as a worthwhile guide to any broker/client relationship.

For each section of the process that requires an accompanying document, the corresponding template is available to be downloaded and adapted to your firm’s requirements and is outlined overleaf. With over six hundred active users of the NACFB’s 22 | NACFB

online document repository, more brokers than ever are accessing our bespoke suite of template documents, ready to fit seamlessly into any broker’s existing business process.

Processing a new lead We advise brokers to ensure that their client has been made aware of your firm’s Privacy Notice at the earliest possible opportunity after obtaining their personal data (i.e. contact details or address).

This is achieved by emailing the notice to the client or directing them to your website to view your privacy statements there.

The next significant stage of the journey should see you share your firm’s Terms of Business (ToB). This is done at the point at which you move away from the enquiry stage and begin the process of arranging finance. A suitable ToB allows you to detail clearly any fees you receive from the client and/or the lender; represented by a percentage range as an indication of the fee expected from the lender.

“

Our compliance team has mapped a broker and client journey diagram setting out the stages of the broking process and the various points of client interaction in this process, covering your data protection requirements, your treating customers fairly obligations and the recording of the deal on your business register

Importantly the ToB will document the date of commencement of credit broking services provided to the client and provide a written definition of the finance offer or the point at which you can expect a fee for the work undertaken. A detailed and agreed ToB can, in addition to providing clear information to the client, support your firm if a complaint were to arise in the future.

Introduction

After your client has understood and agreed to the fees and definitions detailed in your firm’s Terms of Business, the process of customer due diligence can begin. The Association has created a combined Know Your Customer (KYC)/Fact Find template bringing together the process of checking both client and business. This step of the process is essential in evidencing your understanding of the client’s needs, in addition to demonstrating to the Regulator your undertaking to offer suitable products based on the client’s requirements.

Privacy Notice Terms of Business

Introduction

Privacy Notice

Know Your Customer

Fact Find

Know Your Customer

Client Journey

Broker Journey

Terms of Business

Lenders tendered Fact Find

Lenders selected by broker

Lenders tendered

Lenders selected by broker

Statement of Suitability to proceed with selection

Statement of Suitability

Based on the information documented within the KYC/Fact Find, a Statement of Suitability can then be issued to the client.

This document should clearly reflect a statement of the client’s needs, the options that were considered including the various lenders that were considered, each product and service feature and benefit and the reasoning behind each offered option.

The final stage of the broker and client journey is the recording of the completed deal onto the New Business Register. This register supports with business management information and allows your business to better record lead sources whilst tracking which lead sources are of highest value to your business. In addition, the New Business Register serves as a point of reference for business and regulatory reporting.

We are confident that awareness of the new lead generation platform will continue to grow, and we encourage NACFB brokers to take advantage of this key Member benefit and for lenders to direct any enquiries they cannot satisfy to the platform.

to proceed with selection

All full and regulated Members of the NACFB can register for findsmefinance by entering their company information at findsmefinance.co.uk/join

Deal Completion

Case recorded on

Deal Completion Business Register Case recorded on Business Register

Broker Process Client Interaction

Broker Process Client Interaction

If you have any questions about the new platform, please feel free to contact me at nicholas.murphy@nacfb.org.uk If your firm hasn’t yet registered for access to our suite of template documents, please do so at nacfbcompliance.co.uk/subscribe For any support relating to the documents discussed, please email compliance@nacfb.org.uk NACFB | 23

Ask the Expert

Coming to terms with Making Tax Digital

Q Jayne Simpson VAT Technical Officer Chartered Institute of Taxation (CIOT)

What is the Making Tax Digital (MTD) regime?

MTD requires taxpayers to keep their business records in a digital format and it changes the way the VAT return is submitted, via a new digital portal.

The first tax to be impacted by MTD is VAT.

Why has it been introduced?

The government’s view is that MTD will transform tax administration so that it is ‘more effective, efficient and easier for taxpayers to get their tax right’ and reduce the tax gap.

When does it start and what are the key changes for businesses?

For affected VAT registered businesses, VAT returns starting on or after 1st April 2019 must have their records kept in a digital format and the return must be submitted via a digital interface with HMRC. The current online portal for VAT returns will close to businesses signed up to MTD. Care should be taken on timing when signing up for MTD, so VAT returns for earlier periods are not required to be submitted digitally.

A minority of taxpayers have a deferred starting date of 1st October 2019. HMRC has published guidance on gov.uk including their public notice 700/22: ‘Making Tax Digital for VAT’.

24 | NACFB

What are the key changes for landlords?

to an insolvency procedure or for any other reason where it is not reasonably practical; contact HMRC who consider requests on a case-by-case basis. You can refer to HMRC’s public notice 700/22 for more details.

&“

If landlords are not registered for VAT, there are currently no changes.

Landlords who are mandated into MTD for VAT are able to treat summary documents created by their letting agents as if they are a single invoice, rather than recording each transaction separately. You can refer to HMRC’s guidance on third-party agents in notice 700/22.

Where can brokers direct their client enquiries to?

A Clients can contact their accountant, tax adviser or current accounting software provider for advice or call HMRC’s VAT helpline.

Landlords (other than those with income from holiday accommodation) are able to join the pilot for MTD for Income Tax should they choose.

How will this impact Corporation Tax?

There is currently no date for MTD to be introduced for CT, although we expect this would take place in the medium term.

The anticipated consultation on MTD for CT has been postponed so we await a further announcement from HMRC.

Are there any exemptions?

Yes. Taxpayers that are voluntarily registered for VAT, or who currently hold an exemption from online filing of their VAT returns are automatically exempted from MTD and do not need to take any action.

Exemptions are available for reasons such as age, disability, remoteness of location, religious beliefs, being subject

The government’s view is that MTD will transform tax administration so that it is ‘more effective, efficient and easier for taxpayers to get their tax right’ and reduce the tax gap

Technology Soluti ons formerly

LeaseTeam, Inc.

TAKE THE

Since 1989, LTi Technology Solutions, formerly LeaseTeam, Inc., has been setting the standard for equipment finance and leasing software solutions.

LEAD

With over 250 customers worldwide, LTi’s ASPIRE platform is the preferred solution for lease and loan management in the equipment finance industry.

SINGLE SYSTEM/ SINGLE DATABASE Provides a comprehensive view of the entire enterprise

FULLY CONFIGURABLE AND SCALABLE Reduces the need for customizations

WEB SERVICE ARCHITECTURE Allows for easy integrations

FLEXIBLE PLATFORM DESIGN Supports an array of portfolio and ticket sizes, business types, and financial products.

Special Feature

Meet the Board The engine driving your Association forward

A

t the heart of any modern organisation lies a representative group of experts whose knowledge, insight and expertise underpin its progress and development.

The NACFB is no different. Together the NACFB Board of Directors are tasked with a clear remit, to provide greater support for the modern finance professional; enabling you to embrace the highest industry and regulatory standards, and ultimately, help your business prosper.

The Board aims to be representative of our commercial lending community, but we remain a broad church, its structure seeks to represent all key sectors, regions and types of brokerage currently operating in the UK. The Association officially announced the appointment of new Board Directors at last year’s Annual General Meeting and subsequent EGM. The revised Board structure of 12 Directors comprises six broker 26 | NACFB

Members, two Patrons, and two independents alongside the Chair and Vice-Chair.

The six broker Members appointed to the NACFB Board are: Mike Deacon of Asset Based Finance & Leasing, Mike Geddes of Asset Finance Solutions, Phil Gray of Watts Commercial Finance, Steve Olejnik of Mortgages for Business, David Sampson of Omega Commercial Solutions, and Geoff Wilson of White Rose Finance Group.

Both Paul Goodman, of Goodman Corporate Finance, and Adrian Coles, of Commercial Mortgage Solutions, were reappointed as Chair and Vice-Chair respectively.

They are joined by Dave Furnival, of NatWest, and Martine Catton, of Catalyst Business Finance, who were onboarded as the NACFB’s first ever Patron Directors. Two independent specialist Directors were also appointed for the first time with David Newborough, Director at Ashgates Corporate Services and Russ Lewis;

who brings with him high-level leadership and management consultancy capabilities.

These 12 Directors are supported by representatives from the executive team through chief executive officer, Graham Toy, and managing director, Norman Chambers.

The NACFB Advisory Board meets at least six times a year and has acknowledged the need to share with both Members and Patrons the items and issues that are regularly discussed. As such, you will see greater efforts to feedback how you and your views are being represented at the board table.

“ They are your Board of Directors, working on your behalf to champion our lending community

They are your Board of Directors, working on your behalf to champion our lending community. If you want your voice to be heard and your views to be shared in the boardroom, why not get in touch with any one of them and join us on the journey of driving your trade Association – and our industry – forward.

NACFB | 27

Special Feature

Meet the Board 28 | NACFB

Paul Goodman

Adrian Coles

Business specialism: General

Business specialism: Commercial

practice covering the whole of the commercial finance spectrum

Property and Development Finance

The best part of being a broker:

Meeting new clients, solving funding problems and completing deals

Goodman Corporate Finance paul@goodmancorporate.com

Adding value and delivering essential funding at the coalface of UK SMEs

Commercial Mortgage Solutions adrianc@cms-comm.co.uk

The best part of being a broker:

Reason for becoming an NACFB Director: Genuinely wanting to make a positive impact on our industry

Industry changes you would like to see: Greater collaboration between brokers and lenders, delivering more funding to businesses

Biggest challenge facing brokers: Disruptive technology entering the broker space

Reason for becoming an NACFB Director: To drive professionalism and instigate change in our industry

Proudest achievement in business:

Industry changes you would like to see: Greater recognition of our Members

Becoming Chair of the NACFB

as competent professional advisors

What are your hobbies:

Biggest challenge facing brokers:

Rugby, rugby and more rugby

Technology-driven advice

Proudest achievement in business: 30-years in the industry. I may have lost my hair, but I keep smiling

What are your hobbies: I’m a fanatical – but very average – golfer and travelling

What would be your desert island luxury: A gym

What would be your desert island luxury: Bollinger RD 2004

Favourite film: The Great Escape

Favourite film: Star Wars

First record you ever bought:

First record you ever bought:

The Reflex – Duran Duran

Sugar Sugar by The Archies (1969) – a classic!

Mike Geddes

Asset Finance Solutions (UK) Ltd Synergy Commercial Finance Ltd AFS Compliance Ltd mike.geddes@afsuk.com Business specialism: All of market, including Asset Finance, general Commercial Finance and Regulated Mortgages

The best part of being a broker: The diversity of what we do, not a day goes by where there isn’t a different challenge

Reason for becoming an NACFB Director: Giving something back to an industry that has looked after me and mine – protecting and promoting what we do

Industry changes you would like to see: The government and regulators

Steve Olejnik

Philip Gray

Business specialism:

Business specialism:

Complex Buy-to-let , Commercial finance for Investors and SMEs and Development and Bridging Finance

Commercial Finance for SMEs

Mortgages for Business steveo@mortgagesforbusiness.co.uk

Watts Commercial Finance Ltd phil@watts-commercial.co.uk

The best part of being a broker:

Providing solutions for the customer

Enabling client’s businesses to flourish by providing the right commercial funding solutions

Reason for becoming an NACFB Director: To continue the close relationship

Reason for becoming an NACFB Director:

between our business and the NACFB – we were founder Members back in the day!

To make a difference in an industry which I am passionate about, whilst providing a voice for the North

The best part of being a broker:

Industry changes you would like to see: Lenders using technology to interact with brokers

Biggest challenge facing brokers:

Industry changes you would like to see: For the commercial broker market to be regarded as an equal alongside professions such as accountants and solicitors

acknowledging the significant work and support brokers provide to UK SMEs

Keeping up-to-date with customer buying habits and technology

Biggest challenge facing brokers:

Proudest achievement in business:

Integrating technology into daily working practices without it replacing what we do

Becoming managing director at Mortgages for Business

Proudest achievement in business:

Proudest achievement in business:

What are your hobbies: I’m a keen pool

Receiving a lifetime achievement award from Lloyds Bank

Building, with my fellow Directors, the group I am currently part of

player and a lover of music and fine dining

avid football fan and in what spare time I have left I restore classic cars

Favourite film: White Christmas

Technology

What are your hobbies: Spending time with my family, watching Everton, relaxing in Abersoch, and renovating our new farm

What are your hobbies: I’m an

What would be your desert island luxury: A weekly Waitrose delivery!

Biggest challenge facing brokers:

What would be your desert island luxury: Plenty of coffee, I can’t live without it!

What would be your desert island luxury: A cold beer

Favourite film:

– Bing Crosby

Favourite film: The Blues Brothers

First record you ever bought:

First record you ever bought:

First record you ever bought:

Queen – Greatest Hits

Footloose – Kenny Loggins

Prince Charming – Adam & The Ants

Jaws

NACFB | 29

Special Feature

David Sampson

Geoff Wilson

Mike Deacon

Business specialism: Jack of all trades,

Business specialism: Property

Business specialism:

but mainly property-backed lending

Development, Commercial Real Estate, Bridging Finance and supporting our AR Network

Business Consultant and Commercial Finance Broker

Remembering you’re helping businesses and investors achieve their goals – sometimes even their dreams – and making a difference

The best part of being a broker: The variety of the job, as every day is different.

Helping any business of any size evolve, flourish, and grow

Reason for becoming an NACFB Director: To help make our industry better

Reason for becoming an NACFB Director: I joined in 2015 with a genuine

Reason for becoming an NACFB Director: To give something

Industry changes you would like to see: Better delineation by the regulator

desire to help the Association re-shape and re-focus, and to address the changing commercial pressures and regulatory requirements in our sector

back to the commercial finance industry – utilising over 40-years of experience

Industry changes you would like to see: More self-regulation in the sector

finance broker is regulated and self-governed as a NACFB Member

Omega Commercial Solutions Ltd david@omegacs.org

The best part of being a broker:

of who can arrange commercial finance, based on knowledge and experience rather than a catch all credit broking permission

Biggest challenge facing brokers: Keeping abreast of regulation, encroaching technology, and lender inconsistency/ communication

Proudest achievement in business: Becoming a director at Omega

What are your hobbies: Movies, concerts, and gin

What would be your desert island luxury: A seaplane Favourite film: Star Wars

White Rose Finance Group Ltd gwilson@whiterosefinance.com

Asset Based Finance and Leasing Ltd mike@abfl-ltd.co.uk

The best part of being a broker:

Industry changes you would like to see: Ensuring every commercial

Biggest challenge facing brokers:

Biggest challenge facing brokers:

Understanding the regulatory regime, driving new business leads and maintaining a working product knowledge

The rise of AI in commercial finance – AI should complement not compete with brokers

Proudest achievement in business: Launching White Rose

Proudest achievement in business: Directly negotiated the

Finance back in 2004

Channel Tunnel construction contract, with bankers and construction firms

What are your hobbies: A growing band of grandchildren keeps us occupied, although I do enjoy cycling, swimming and playing golf. When time allows, I watch my beloved Leeds United

What are your hobbies: Crystal

What would be your desert island luxury: My Amazon Echo with

and a decent bed – access to global communications

Alexa and a good wi-fi connection!

Favourite film: The Full Monty

Palace FC, music and travel

What would be your desert island luxury: Apart from food, water

Favourite film: Blazing Saddles

First record you ever bought:

First record you ever bought:

First record you ever bought:

Dare – The Human League

Money – The Beatles

Jimi Hendrix – Purple Haze

30 | NACFB

Martine Catton

Catalyst Business Finance mcatton@catalyst-finance.com Business specialism: Short-term finance for SMEs

The best part of being a Patron:

Dave Furnival

NatWest Business and Commercial Banking dave.furnival@natwest.com Business specialism: Business Finance

Being able to frequently say yes to providing SMEs with a choice of flexible funding solutions

The best part of being a Patron:

Reason for becoming an NACFB Director: The role of the broker is more

Reason for becoming an NACFB Director: The industry faces

crucial than ever before. I want to be part of an organisation which promotes the valuable service a broker can provide to SMEs

many challenges with the emergence of new technology and Open Banking regulation

Industry changes you would like to see: Funding solutions to be better

Industry changes you would like to see: A deeper understanding of the

signposted for the SME and delivered by better collaboration across funders and brokers

compliance arena and what this really means for brokers and advisers

Biggest challenge facing brokers:

Biggest challenge facing brokers:

Keeping up to date with the plethora of funding solutions and the technology that delivers them

Staying updated in a diverse market and ensuring knowledge is also up-to-date preventing lender or product bias

Proudest achievement in business: Becoming a director at Catalyst at the end of 2017 and building a team of great people who are delivering great results

Enabling businesses to achieve their goals and helping our local communities thrive

Russell Lewis

coycomd@gmail.com

Business specialism: Leadership, resilience and high-performance team training

Reason for becoming an NACFB Director: To bring a different perspective and skill set to the Board

Industry changes you would like to see: More awareness and recognition of what the NACFB can do for the industry

Biggest challenge facing brokers: Public awareness of what brokers actually do

Proudest achievement in business: Seeing teams I have developed achieve more than their expectations

Proudest achievement in business: Successfully launching and building the NatWest broker team and watching them thrive

What are your hobbies: Spending

What are your hobbies:

time with my family, cooking and of course eating Italian and French cuisine

Martial arts, cycling, gym work, coaching rugby, playing the guitar

What would be your desert island luxury: My phone and a solar

What would be your desert island luxury: A boat! I’m not one for desert

powered charger, it stores lots of music and books so I’ll always be entertained

islands so I would want to escape

Favourite film: The Secret Life of Bees

Star Wars

Favourite film: Heat

First record you ever bought:

First record you ever bought:

First record you ever bought:

Ultravox – Vienna

Queen – Live Killers

Back to the Future OST

Favourite film:

What are your hobbies: Bushcraft, outdoor pursuits and reading

What would be your desert island luxury: Machete

NACFB | 31

Special Feature

David Newborough

Graham Toy

Norman Chambers

Business specialism: Accountants

Reason for becoming an NACFB Director: Being able to lead and influence

Reason for becoming an NACFB Director: I am on the Board as a

a vital element of the broker sector

representative of the executive team and we are here to help make the broker’s boat go faster

Ashgates Corporate Services Ltd dnewborough@ashgates.co.uk

and business advisors, providing compliance services and a trusted advisor service to SME businesses

Reason for becoming an NACFB Director: The financial side of the organisation had a change process to go through as part of its significant growth and development. My skills and experience appeared to be valuable in assisting with this process

Industry changes you would like to see: Professionalism continuing to increase – which is obviously happening but needs to continue

Biggest challenge facing brokers:

NACFB graham.toy@nacfb.org.uk

Industry changes you would like to see: Greater appreciation of the value that a broker can add to the SME community by enabling access to the significant variety of lenders and their appetite to lend

Industry changes you would like to see: Higher professional standards

Biggest challenge facing brokers:

Biggest challenge facing brokers:

Keeping abreast of the increasing numbers of lenders, their products and changing risk appetite

Economic uncertainty and growing fintech pressures

Proudest achievement in business:

In a former role I was recognised as the number one Area Manager in the UK

As a lender, maintaining a consistent lending and risk appetite through a full economic cycle

Keeping up-to-date in a fast-paced and changing world and – for smaller brokers especially – ensuring that the administration of systems and controls helps you to deliver what your clients want rather than hinder it

Proudest achievement in business:

NACFB norman.chambers@nacfb.org.uk

across the board

Proudest achievement in business:

What are your hobbies: Holidays, going to the theatre and a season ticket holder at Chelsea FC

What would be your desert island luxury: Solar powered fridge of beer and a solar powered record player to listen to the Rat Pack

What are your hobbies: Sailing and

Favourite film: One Flew Over

skiing both of which I would assess as room for improvement!

the Cuckoo’s Nest

What are your hobbies: Playing

What would be your desert island luxury: My kindle – I could immerse myself

Take Me Bak 'Ome – Slade

music including piano, keyboard, bass and guitar

in a good book without the distraction of all the other things I should be doing

What would be your desert island luxury: Definitely something

Favourite film: About Time

When clients recommend me to their friends. I always feel that is the true demonstration that they value the service and advice that my firm and I offer

musical, probably a piano

First record you ever bought:

Favourite film: Austin Powers

Pictures at an Exhibition – Emerson Lake & Palmer

32 | NACFB

First record you ever bought:

Gala

Dinner & Industry Awards 2019 Park Plaza Westminster Bridge, 200 Westminster Bridge Road, London, SE1 7UT

November

28

Drinks reception starts at 18:30 Guests to be seated at 19:00 After party to follow

Celebrating the success of collaboration between the UK’s most dynamic brokers and lenders Early bird tickets available now £310 + VAT per person £3100 + VAT per table of ten Early bird pricings will close on June 28 To book please email admin@nacfb.org.uk Dress code: Black tie Sponsored by

Patron Feature

What asset finance can learn from a long forgotten detective story The theory, the data collection, the findings and their relevance Tim Shand Business Development Manager Rivers Leasing

M

aybe because (in broad terms) we are superbly privileged in the UK, we forget the true underlying value of some of the things we have. However, in quiet contemplation lately, we were reminded on pondering a couple of occasions, why ‘things’ should not be taken for granted.

about what crimes should be included (were we interested in ‘Furious Driving’?). Once this was decided, someone in the depths of their offices produced some code on punched tape to interrogate the massive computer, which then produced reams of lined and perforated paper containing the crime data.

The next task was to get information on the weather. The local Met Office was not particularly helpful but the Met Officer at the regional airport was keen to get involved. A bus ride this time ending up in a small office at the bottom of the control tower. Most of the records were handwritten in a large book and the data had to be manually extracted and copied, again, by hand.

Many years ago, when a module in my degree course was called quantitative studies, a project task was set to come up with a theory and then prove it (or otherwise) by the collection of statistical data.

The hypothesis was that violent crime increased with temperature.

It sounds like a simple task in today’s terms, but 36 years ago the availability of data was very different.

The next task was relatively straightforward – the analysis. Indeed, there did appear to be a fairly strong correlation between the factors.

Today however, this could all have been done from the comfort of a desk and PC (although it might not have allowed me to appease my inner Sherlock quite as well).

Firstly, the crime figures. A letter was sent to the local city police HQ, a reply was received, a meeting was set up, a bus ticket bought.

Then some face-to-face negotiation with the police and a discussion

The other example happened recently, while trying to change an upcoming flight with a foreign airline. The UK customer service number with a Leeds code was dialled. It was answered seamlessly

34 | NACFB

3,500 miles away. The team member was very helpful and as we spoke an email appeared with amended flight itinerary and e-ticket.

Incredibly slick but what was noticeable was the reaction of the team member when thanked profusely for sorting it out. It appeared that the praise had “made his day�.

Maybe the lesson from the first example is to value the immediate access to a wealth of resource that we now have at our fingertips.

Certainly, in our work at Rivers Leasing we understand that fast decision-making processes can be extremely important to individuals and businesses seeking asset finance.

From the second example, perhaps we can deduce that even when technology means end results can be achieved more easily, we should still remember the value that human interaction can bring to the experience. In finance this is a lesson that can be easily lost, not least in the role between brokers and financiers.

At Rivers Leasing, we believe that human involvement is still very much a part of the industry. Brokers, with whom we communicate daily, underpin the industry as a whole, and contrary to predictions have not and cannot be replaced by algorithms. Algorithms are

a valuable tool, but they cannot provide the human interaction necessary to create trust and understanding when dealing with something as emotional as money.

In all aspects, we must never lose sight of the fact that there is a human story behind every transaction, and that in itself is an important part of the picture.

“

In all aspects, we must never lose sight of the fact that there is a human story behind every transaction, and that in itself is an important part of the picture

NACFB | 35

Patron Feature

Bridging past, present and future…

Contextualising growth in the short-term market Brian West Director Central Bridging

A

s we move into the second quarter of 2019 it is hard to believe that over a decade has now passed since the darkest days of the global financial crisis back in 2008, a crisis which gave rise to the deepest recession since the 1930s but also proved to be a catalyst for the strong and vibrant bridging industry we have today.

If we cast our minds back to 2008 the world was a very different place. As the credit crunch steadily tightened its grip UK interest rates were cut from what now seems like a positively stratospheric 5.5% at the start of the year to just 1% by year end, Heather Mills eased any personal money worries with a £24.3 million divorce settlement from estranged husband Sir Paul McCartney and Manchester United won their tenth Premier League title with the noisy neighbours City finishing a mere 32 points behind in ninth!

Meanwhile, the UK specialist lending sector was dominated by banks, be they High Street lenders or American banks, funded largely by the securitisation model. When the US housing bubble burst those of us working in the industry remember very clearly just how quickly funding lines evaporated and the American banks disappeared back across the Atlantic.

With the American lenders in retreat and the UK High Street banks 36 | NACFB

trying to repair their shattered balance sheets and improve their capital adequacy ratios, liquidity was at a premium. Fortunately, into this void, grew a new breed of lenders backed by an unprecedented diversity of funding sources. A steady flow of new entrants proved that they could thrive in any macro-economic environment, many being founded and forged during a period of huge economic uncertainty.

Over time these lenders played a hugely significant role in financing the inherent dynamism of our property investors and SMEs and in doing so, lest we forget, helped the UK bounce back from the financial crisis more strongly than virtually any other nation.

Arguably the worst recession in living memory, a crisis that was housing market-led, saw UK house prices fall 13.7% between 2007 and 2009 but this fall was recovered in a little over three years. In 2012 members of the ASTL wrote just over £1 billion of bridging loans

“

Whilst a glut of liquidity can be good for consumers, driving down rates and enhancing LTVs, it simultaneously increases pressure on new lenders seeking to obtain market share

“

As the short-term lending market has steadily developed and matured it has played a fundamental role in under-pinning the UK housing market, encouraging overseas investment and supporting the UK’s SMEs and wealth creators

and strong year-on-year growth subsequently has seen this figure quadruple to over £4 billion last year.

Today some of the first new entrants have grown and become banks themselves. They have been joined by challenger banks and peer-to peer-lenders and in recent months, with concerns surrounding returns on the equity and bond markets, by a further surge of privately backed new lenders.

As the short-term lending market has steadily developed and matured it has played a fundamental role in under-pinning the UK housing market, encouraging overseas investment and supporting the UK’s SMEs and wealth creators. Against this overwhelmingly positive backdrop however, there are some clouds on the horizon.

With massive macro-economic and political uncertainty impacting the US, Chinese and many European economies together with the unresolved Brexit debacle, there have been increasing signs in recent months that the resilience of the UK specialist lending market is being pushed too far. Whilst a glut of liquidity can be good for consumers, driving down rates and enhancing LTVs, it simultaneously increases pressure on new lenders seeking to obtain market share. The inevitable result is that some of these new lenders, perhaps lacking experience in a market where high-quality

staff are at a premium, start to take ill-judged risks on complex cases.

Against the backdrop of a softening property market this can lead to spiralling defaults.

Nor, it seems, is the problem purely confined to new entrants.

We saw a substantial market player go into administration just prior to Christmas underlining that poor credit decisions made to try and maintain market share can be just as damaging as those to gain it.

In summary, there are lenders in the sector who have been lossmaking even in the relatively benign trading conditions of the last two to three years, lenders who have been in no position to make contingency plans for the harder conditions that may well lie ahead.

Consequently, the coming months will almost certainly see further casualties but if we can avoid any serious reputational damage to the sector, these losses will only serve to strengthen the industry.

Most specialist lenders are strong, well-funded and populated by experienced, adaptable, technically competent and innovative professionals. They are adept at servicing demand whatever the prevailing economic conditions. Consequently, whatever the rest of the year brings, the sector is extremely well positioned to continue its vital role in supporting the UK economy.

NACFB | 37

Patron Feature

The shifting landscape for brokers in Scotland Working alongside resilient Scottish business borrowers

Derek Money Head of Glasgow Sales White Oak UK

A

s at March 2018, there were 343,535 SMEs operating in Scotland, providing an estimated 1.2 million jobs.

While some SMEs have access to the finance they need, there are still many businesses in Scotland that are unable to gain access to finance. However, according to data from You Expert Group, the Scottish specialist lending market is predicted to double in size over the course of 2019, which, for brokers, represents a significant commercial opportunity. So, what does this mean as we head further into 2019?

England vs Scotland Sporting passion aside, the main factor is the differing size of the markets in Scotland and England. The Scottish market is considerably smaller by comparison and with significantly less direct competition. The more precise the market however, the greater the customer emphasis on pricing. It’s essential for brokers to be competitive in order to attract business interest and even more so to consistently deliver a high-level of customer service to build loyalties with the client. That is what it’s all about, building close relationships over several years and doing right by the customer and their business.

There is an increasing level of ‘choice’ across the market, with new and emerging brokers an ever-present factor. Whether we are referring to smaller so-called ‘bedroom brokers’ or larger corporate brokers, it’s all about adding value, giving the customer access to more sources of finance and the ability to stand out from the crowd – differentiation has never been more key.

Whilst White Oak UK maintains a large and effective telephone-based business across the UK over a diverse range of clients and brokers, the firm has historically maintained a strong field presence.

With a concentration in Scotland, we have been able to build a strong and trusted face-to-face business over many years.

Also, the areas of specialism play a big part. Typically, our clients in Scotland fall into key sectors such as haulage, construction, energy and agriculture. By their very nature, these industries tend to be rural, which poses its own set of challenges in respect of accessibility, something that is perhaps much less of an issue to many of our English counterparts.

Our recent move to Glasgow from Stewarton was a key growth consideration in allowing us to be closer to our growing client base.

It affords us the ability to focus on developing new secured and unsecured products to serve the evolving needs of our customers and brokers under the broader White Oak UK flag.

The impact of Brexit We may not have a crystal ball, but it is clear to see that there are a number of factors that could cause some disruption to business supply chains, and indeed our customers, as we head closer to Brexit.

Encouragingly, we have seen no visible signs of a behavioural shift to date. This is clearly something that we will continue to monitor, both through our customers and our broker network, as keeping our lines of communication open will be essential in ensuring we are able to provide the best possible solutions to a changing set of requirements. The post-Brexit landscape is currently unknown, and we anticipate that the industry as a whole will likely see some unsettled activity through 2019 and beyond, as we become more accustomed to this ‘new world’.

There is, however, a notable resilience amongst businesses, a ‘we’ve been here before’ mentality. Businesses are still buying and they’re still investing. This won’t stop, but we’ll certainly need to employ a more agile approach as an industry, if we are to deal with these evolving requirements.

We know from experience that asset backed deals complement our business loans as a way to manage a client’s cashflow requirements. We are confident that our core product offering of Asset Finance, Business Loans and Commercial Mortgages, caters for a broad range of broker requirements. The hard asset market, for example, is mature and well established, but a change in mindset is required across the industry to increase the level of unsecured options offered. This is a balance we know we are able to achieve, which will ultimately lead to the gain of our brokers. Essentially, we are positioned to provide a single solution to brokers, backed by our rapid turnaround, flexibility and ease of use – and with uncertainty ahead, these factors will become increasingly important.

“

The Scottish specialist lending market is predicted to double in size over the course of 2019, which, for brokers, represents a significant commercial opportunity

NACFB | 39

Sponsor Special Feature Feature

How Invoice Finance solutions are opening up for small f irms Smaller firms are hit particularly hard by late payments, but changes in regulation mean brokers will now be able to offer small business clients a new way to face the challenges Richard Evans Head of Broker Sales Lloyds Banking Group

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s statements are prepared for financial year end, the impact of late payments on business’ cash flow will be plain to see. This impact is likely to be considerable: Lloyds Bank’s Working Capital Index revealed that customer payment times were a challenge for companies last year, with six times as many firms reporting longer rather than shorter payment times. Sector-wise, the Index also found that more than a third of construction firms were being paid later and were forecasting longer cash collection periods.

However, as inflation squeezes margins resulting in a slowdown in payments to suppliers, the impact is falling disproportionately on smaller firms. The Index shows that last year, four times as many small businesses reported longer payment times from customers compared to larger firms. In real terms, the average small business now takes ten days longer than a larger firm to collect the cash it’s owed.

This in turn impacts working capital, with the average small company tying up cash in working capital 16 days longer than a large company.

40 | NACFB

New regulations A solution for businesses facing these challenges is to raise money from unpaid invoices via Invoice Finance. However, up until recently, many businesses looking for financing to fill the gap between issuing invoices and receiving payment were prevented from making use of this service because of contract restrictions on assigning invoices.

In fact, the government estimates that the 40,000 firms in the UK using Invoice Finance represent only around 10% of the number of businesses that could potentially make use of it.

“

The government estimates that the 40,000 firms in the UK using Invoice Finance represent only around 10% of the number of businesses that could potentially make use of it

Now, thanks to changes in regulations, Invoice Finance is becoming more of an option for smaller companies. The Business Contract Terms (Assignment of Receivables) 2018 regulations state that restrictive business contracts that prevent the assignment of invoices will no longer have any effect. The government says this should make the business finance market more accessible and provide entrepreneurs with cheaper, more readily available finance.

The regulations are now in force and apply to contracts entered into on or after 31st December 2018.

Benefits of Invoice Finance for smaller businesses Invoice Finance with Lloyds Bank is highly scalable. As businesses grow and turnover increases, it enables firms to access the funds tied up in invoices to grow their assets, stock and infrastructure.

It also enables businesses to access funding quickly: Invoice Finance can release up to 90% of an invoice’s value, often within 24-hours helping to improve cash flow, boost working capital and ensure the smooth running of a company. It is also an option that is available for growing firms – for example, a turnover of £50,000 is needed to be eligible for our Factoring solution.

Lloyds Bank’s Invoice Finance service offers simple and transparent pricing. It can be structured to help your clients meet their specific needs, both now and in the future. Our restructured business under the leadership of Richard Evans, head of broker sales nationally, includes a team of regionally-based dedicated Invoice Finance

“

Four times as many small businesses reported longer payment times from customers compared to larger firms.

In real terms, the average small business now takes ten days longer than a larger firm to collect the cash it’s owed

broker managers who work closely with business development managers, to help provide you with a tailored service.

For smaller as well as larger clients, it could now provide a welcome release from late payments difficulties and give them the room they need to grow.

Find out more at lloydsbankcommercialfinance.co.uk Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278 NACFB | 41

Industry Insight

Uncertainty is a drag, but small business finance barriers are long-standing... ...it's time we broke them down

Martin McTague Policy & Advocacy Chairman Federation of Small Businesses (FSB)

E

ncouraging UK small firms to access new finance is not easy at the best of times. And these are certainly not the best of times.

A whole raft of recent data indicates that the challenges we face in this space – lack of appetite among small firms for new finance, high borrowing costs, and low awareness of alternative options – have become even more entrenched in recent months.

With the economy plagued by persistent political uncertainty, these worsening trends are understandable. But we shouldn’t lose sight of the fact that the challenges are long-standing.

Here at the Federation of Small Businesses (FSB), we keep a close eye on our members’ appetite for new finance through our quarterly Small Business Index (SBI).

Our latest instalment shows the proportion of small firms applying for external finance remains stubbornly low at around one in eight (13%) – down three percentage points since the same period four years ago.

Consultancy firm BDRC’s regular assessment of small business finance shows that half of small firms are ‘permanent nonborrowers’: they’ve never applied for external finance and are content not to do so in future. In 2012, the proportion stood at one in three. What’s more, a staggering three quarters of small businesses would rather grow more slowly than borrow to grow more quickly.

The findings chime with the British Business Bank’s latest small 42 | NACFB

business finance markets report which indicates that the prospect of Brexit is hampering appetite among firms.

Cost also appears to be emerging as a more significant barrier to accessing new finance. Our most recent SBI shows that three quarters of successful credit applicants are being offered a borrowing rate of 5% or more. The figure is at a record-high.

And awareness is nowhere near where it should be. More than three quarters of small firms are still applying for traditional bank loan and overdraft facilities, though the figure has come down in recent years as Asset and Invoice Finance, peer-to-peer lending and crowdfunding have steadily grown in popularity.

The damage done to trust in big lenders during the financial crash also continues to serve as a barrier in this space. While business owners might trust the bank they’ve always dealt with as a consumer, only one in four firms with employees have a high level of trust in the banking industry as a whole.

The hope is that the £775 million RBS remedies package – put up in lieu of the sale of Williams & Glyn – will help inject some competition into the small business banking market, helping to improve perceptions in the process. As the winners of the first round of capability and innovation funding, we hope to see Metro Bank, Starling and Clearbank (working with Tide) improving their small business offering without delay.

That current lack of trust in banks no doubt feeds into a general wariness about the finance industry as a whole, further stifling access to alternatives.

Efforts to draw a line under the scandals at the Royal Bank of Scotland’s Global Restructuring Group and HBOS’ Reading division have been drawn out and, to date, unsuccessful.

At FSB, we’re calling on the FCA to wholeheartedly recognise the fact

that small business owners have more in common with consumers than big corporations when it comes to accessing finance. That startsstarts That with treating with treating loansloans wherewhere a personal a personal guarantee guarantee is offered is as consumer offered as consumer products. products.

Of course, that won’t serve as a silver bullet. The question remains: how do we get more small firms considering all of their options, accessing new finance and increasing growth and productivity?

Last year, our Going for Growth report set out a swathe of recommendations for how we get there – two of which feel particularly pressing.

First off, more must be done to unlock the benefits of Open Banking. It’s the best part of three years since the Competition and Markets Authority (CMA) set out its Open Banking expectations and deadlines. However, lenders have been slow to establish robust Application Programming Interfaces following these guidelines, making it a challenge for alternative providers to make use of them. government has Government has aa role role to to play play in in accelerating accelerating this this slow slow start. start. ItIt should shouldtomove move enacttoaenact wide-reaching a wide-reaching behaviour-change behaviour-change campaign campaign – – utilisingnudge utilising nudgetheory theory– to – toallay allayfears fearsamong amongsmall smallfirms firmsabout aboutOpen Open Banking Banking and encourage and encourage more of more them of to them embrace to embrace it. it.

Secondly, we need to see better results from the Government’s government’s Bank Bank Referral Scheme. To date, only 902 of the 19,000 firms that have been referred through the initiative have gone on to secure new finance as a result. The big banks should be set meaningful targets for the

number of rejected applicants they successfully refer to alternative providers – either through the government’s scheme or their own channels. own channels.

Political uncertainty is a real drag on small business appetite for new finance. But we can’t point to it as the cause of the long-standing barriers faced by small firms in this area. It’s high time that we broke them down for good.

“

At FSB, we’re calling on the FCA to wholeheartedly recognise the fact that small business owners have more in common with consumers than big corporations when it comes to accessing finance

NACFB | 43 39

Industry Insight

Developing strategies to combat cyber security risks Establishing an integrated approach to an evolving cyber threat

​Durgan Cooper Managing Director CETSAT

T

echnology is changing the way we go about our lives.

It is also changing the way criminals and those who might do us harm now operate, by making it easier and cheaper for them to carry out successful cyber-attacks. This means we are having to change our approach to daily tasks – both at work and in our private lives.

is to create an attitude and culture of resilience. First and foremost, and more often overlooked, is an understanding of what you need to protect and the severity impact of a compromise. We are engaging with systems for email, data storage and social media amongst many and a compromise of any element may affect our reputation, finances and contracts.

Resilience is built through education, knowledge is power and so often a breach can begin with an innocent click on an infected email.

Between 70% and 80% of cyber-attacks are attributed to human error; informed and educated staff are therefore your first line of defence.

“Only amateurs target machines, professionals attack people”

A data breach is a break in security, leading to the accidental or unlawful destruction, loss, alteration, intentional disclosure of, or access to, intellectual property, financial or personal data.

It is inevitable, and statistically shown, that we will each be affected by a major cyber security breach at least once in our careers.

How much resource should we invest in preventing this potentially ‘once in a lifetime’ event and what could the possible impact be?

It could be catastrophic data loss, GDPR fines or even a sustained disruption to our business operations.

A cyber breach can affect us in many ways. Ransomware locking our data out of reach, our credentials being compromised on a third-party system, a rogue colleague stealing intellectual property, or even email systems being compromised, and invoice fraud being committed.

Sadly, given the variables, there is no known silver bullet to reduce the risk of cyber-threats. Despite preconceived perception, any preventative approaches should be no different between a government agency, enterprise or SME. It has been said that it is not a question of if you will be compromised, but when. Our approach to protecting an organisation and its assets 44 | NACFB

If we and our staff are not trained to identify and detect potential risk, it is remiss of us to expect them to know how to reduce it.

The ways in which people learn is varied, with instructor-led and online cyber education tools increasing in availability, they are often on a per head basis and are a cost-effective method to reduce risk.

Cyber Resilience is all about the planning and you, your staff and any service providers knowing what actions to take given a number of anticipated situations.

“

It has been said that it is not a question of if you will be compromised, but when. Our approach to protecting an organisation and its assets is to create an attitude and culture of resilience

Beyond this, simple layers of protection should be added as a minimum. Anti-malware protection, data backup and disaster recovery protection of individual systems and firewalls.

Often people do not know where to start when looking at Cyber Resilience and therefore one of the most cost-effective ways to instigate positive change is to look at the Cyber Essentials standard.

Its history is borne out of the UK Government having a desire for the UK to be the safest place in the world to do business online and it is expected to reduce the risk from unsophisticated and untargeted attacks by up to 80%.

Whilst some criticise Cyber Essentials for not going far enough; honestly a perspective we too shared when we first became certified practitioners, it is a foundation from which to build, a starting point and not the final destination, but most importantly it is achievable by all.

Finally, it must be acknowledged that cyber security is not the IT manager’s problem or the responsibility of the outsourced IT company; it is the responsibility of each and every director, officer and leader within a business that they must make the effort to gain an understanding of the above and take the lead.

Whilst selling cyber security products and services can exhaust any budget, it is not about the selling, it is about the decision makers making informed choices. Cyber threat is here, and it is increasing day by day and we would rather a client understood the risks and be satisfied and informed about any decision that they make rather than running the risk of making no decision at all.

“

Cyber security is not the IT manager’s problem or the responsibility of the outsourced IT company; it is the responsibility of each and every director, officer and leader within a business

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NACFB | 45 41

Opinion

Celebrating an end to Bans on Assignment A welcome change for businesses, brokers and lenders Steve Noble Chief Operational Officer Ultimate Finance

T

his year marks the end of Bans on Assignment contract clauses. For us, this is great news and I’m sure it has also been greeted positively by your clients. But what were the problems with Bans on Assignment?

Bans on Assignment created a barrier when it came to providing Invoice Finance as some financiers are hesitant to provide funding where the contract between clients and their customers contains this type of clause. If the financier is prepared to provide funding, they will either have to find a workaround – such as requesting that the business approaches their customer for consent – adjust the pricing or request additional security from the client. Each of these options will prove time-consuming and generally make it difficult for clients to obtain Invoice Finance.

Legislative update This is why we’re delighted that Bans on Assignment clauses are now null and void, in England, Wales and Northern Ireland. Brokers therefore no longer have to worry about their clients struggling to assign receivables to Invoice Finance providers without having to seek consent from customers or find workarounds to these clauses.

The regulation also makes any clause preventing a party from determining the value of a receivable and being able to enforce it ineffective. Again, this increases the appeal of Invoice Finance for so many SMEs across the country.

Does the regulation impact you?

Obviously, this is great news for SMEs. However, there are still some caveats to the legislation: 46 | NACFB

• The regulations apply to contracts entered into on or after 31st December 2018 • They do not apply to receivables due to be paid to large enterprises or special purpose vehicles • They exclude certain contracts from the scope of the regulations, for example those relating to land and for the provision of financial services • They only apply to contracts governed by the laws of England, Wales and Northern Ireland. We hope to see the Scottish Government pass similar legislation in the near future

The future At Ultimate Finance, providing the financial support SMEs need to survive and thrive is why we exist. We welcome these legislative updates as the removal of Bans on Assignment makes it easier for brokers to give SMEs access to vital funding, compared to when such clauses were in place. We can now provide Invoice Finance to more SMEs across the country and that’s well worth celebrating.

After all, good funding does the world of good.

“

Brokers therefore no longer have to worry about their clients struggling to assign receivables to Invoice Finance providers without having to seek consent from customers or find workarounds to these clauses

We value our long term relationships Close Brothers has a well-documented history of lending through all economic cycles.

We can only do this because of the strong relationships we have with our brokers and customers, who know they can expect consistency at all levels.

Contact our team today to find out how we can support you with asset finance options.

0330 134 6400 broker.support@closebrothers.com

Close Brothers Business Finance is a trading style of Close Brothers Limited.

Close Brothers Limited is registered in England and Wales (Company Number 00195626) and its registered oďŹƒce is 10 Crown Place, London, EC2A 4FT.

Opinion

The impact of HMO licensing on landlords ​​Gavin Seaholme Head of Sales for Commercial Mortgages Shawbrook Bank

S

ince the new HMO Regulations came into effect in England on 1st October 2018 to change the way in which mandatory licensing applies to HMO property, education amongst landlords on the laws has noticeably improved, according to our latest Broker Barometer.

As the HMO market continues growing, landlords have a duty to ensure their properties are fit to live in. The new licensing law is a positive initiative as it will improve the quality of accommodation, upgrade living conditions for tenants and better the HMO sector as a whole.

Landlord awareness on the HMO licensing changes has increased, with over seven in ten (71%) of brokers surveyed stating their HMO landlord clients are aware of the new licensing laws which came into effect in October 2018 – this is compared to just 10% who do not think their clients are aware of the new laws. This paints a much more positive picture in comparison to the two thirds (59%) of brokers who said their HMO landlord clients were not aware of the new regulations in Shawbrook’s January 2018 Broker Barometer results.

As a result of the changes coming in, many landlords have had to think about making structural changes to their property to obtain a mandatory licence. Encouragingly, over a third (34%) of brokers said their HMO landlord clients have not found it challenging to make the necessary changes to their property in order to obtain a mandatory licence, however they are concerned about costs, with 50% expressing concern for how much they will spend on the adjustments.

48 | NACFB

The HMO market remains a key component of Shawbrook Bank’s lending activity, but it is not one that should be pursued without a great deal of thought for those new to the space, who may have been attracted by the higher yields associated with this asset class.

It seems evident that more and more investors are considering adding this into their portfolios, but with the new licensing laws and the specialist nature of this market, investors must make sure to partner with a broker and a lender that understands the inherent complexity of this area. If done correctly, HMOs are a valuable addition and can drive healthy profits for professional investors and landlords. However, existing HMO investors are clearly concerned with the ‘nuts and bolts’ of mandatory licensing, as well as the cost.

This raises the stakes for those looking to enter the market and further emphasises the need to work with specialist operators.

This is a market that is constantly evolving, and it is crucial that investors and lenders are adapting with the times if they are to continue to take advantage of the opportunities presented by this attractive asset class.

“

The new licensing law is a positive initiative as it will improve the quality of accommodation, upgrade living conditions for tenants and better the HMO sector as a whole

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Opinion

​ he secret to growth?

T Less instructions, more inspiration ​Rethinking the frameworks we operate in requires a change of mindset and an amenability to new ideas ​Narinder Khattoare Kuflink Bridging Chief Executive Officer

T

he commercial finance industry is thriving and ASTL data shows more than a 20% rise in annual completions for 2018, which means we’ll need a huge amount of new talent to help cement the hard work we’ve all put in to get to this position. The question is, for an industry built around personal relationships, how can we promote leadership and development for our new recruits?

We can’t just hand them a contact book, take them to a few industry events and expect them to reach their full potential in due course.

To move ahead and sustain this demand, we have to promote innovation on all fronts and an intake of fresh talent gives us the perfect opportunity to try new approaches. Historically, the finance sector has dragged its heels and been slow to make changes, but the ‘if it isn’t broke’ mindset has already taken a huge chunk of business away from the banks.

Incumbents have swept in with cheaper, slicker products and the tides are changing; customers expect more. Sure, the process of client phoning broker, broker phoning lender, lender phoning solicitor gets funds out the door eventually – but if it isn’t as fast or as customer-friendly as it could be, then let’s start innovating.

Think of Uber. It’s a single point of access with live-tracking capabilities that, pricing aside, it appeals because of its sheer convenience. We could easily adapt to that thinking to streamline the contact between clients, brokers and lenders.

50 | NACFB

The trick is to lead with ideas. Processes are important but legal bits aside, everything else should be up for review. Those of us that have been around a while should be teaching the logic behind ideas and then encouraging our teams to give opinions and take a steer in the industry’s future. We might have sat down on our first day and been told exactly what to do but, like it or not, millennials work better with inspiration than dictation. There is no need to re-invent the wheel, but wouldn’t it be easier for everyone if we stopped sifting through paper applications and started moving towards apps and CRMs? That’s not to say we don’t need the ‘old school’ personalities within this industry. Nothing sells a product faster than someone we trust, and our decades-long relationships are worth more to a business than any app will ever be. But it’s not one or the other, and now is the best time to capitalise on the promise of a sustainable, exciting and up-to-date market that we can all contribute to if we have the right mindset.

“

I​ ncumbents have swept in with cheaper, slicker products and the tides are changing; customers expect more

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5

Listicle

Ways to spot an email scam

N

o one wants to believe they'd fall for a phishing scam. Yet recent findings reveal as many as 30% of phishing emails get opened.

Phishing scams work because cybercriminals will often go to great lengths to disguise their bait as legitimate email communications, hoping to convince targets to reveal login or password information and even download malicious malware.

There are still a number of ways to identify a phishing email, so we’ve compiled five of the most common elements to look for.

1. Are you being asked to confirm personal information?

Often an email will arrive in your inbox that looks authentic. Scammers will go to painstaking lengths to ensure that their message imitates the real thing. However, when this authentic-looking email makes requests that you wouldn’t normally expect, it’s often a giveaway that it’s not from a trusted source. Lenders will not ask you to confirm bank details or personal information by email.

1 52 | NACFB

4. Is there a suspicious attachment?

2 2. Does the email address look genuine?

It is often the case that a phishing email will come from an address that appears to be genuine. Scammers aim to trick recipients by including the name of a legitimate company within the structure of email addresses. If you only glance at these details they can look real, but you may find that it is a fake variation intended to appear authentic. For example: steve@mail.lender.info as opposed to steve@lender.com

Alarm bells should be ringing if you receive an email from an apparent funder out of the blue that contains an attachment, especially if it relates to something unexpected. The attachment could contain a malicious link or trojan. A popular scam sees hackers send invoices from senior staff on a Friday, figuring that they are often out of the office and thus more likely to be approved by finance teams with one eye on the weekend.

3. Are there tipos?

Perhaps the easiest way to spot a phishing email is by the poor language used in the body of the message. Read the email and check for spelling and grammatical mistakes, as well as strange turns of phrase.

Emails from legitimate companies are well constructed and checked for errors. Often these typos have been inserted deliberately with the scammers rationalising that if you haven’t spotted the errors, you’ll be less likely to spot a scam.

3

4 5. Are you being threatened?

A common phishing technique is to instil panic in the recipient. The email may claim that your account may have been compromised and the only way to verify it is to enter your login details. Ensure that you take the time to think about whether an email is asking something reasonable of you. If you’re unsure, trust your gut and contact the company through other methods.

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Five Minutes With

​ ive F Minutes with: Caroline Luxmore Caroline Luxmore Head of Commercial Mortgages Aldermore Bank

Describe your role in ten words or less?

Business leader assisting lending in Owner Occupied and Investment markets.

In your view what are the key elements to a successful deal?

Excellent customer service is a must.

It is important to get to know and understand your customer.

What’s the most common reason for turning away a deal?

We always try to find the best funding solutions for our customers. However, there are occasions we are unable to; credit history, insufficient information available to provide the right facility and how the repayments will be made or simply not enough rental income to support the debt required are all factors that play a part in our decision-making.

What is your favourite SME success story?

Being a Midlander, I heard an inspiring story of a lady who became a mechanic to dispel the myth of women not being able to do ‘men’s work’. She successfully set up her own business, attracted great clientele, and also offers car maintenance classes called ‘heels to wheels’ on the very basics of looking after your own car.

What advice do you have for the modern commercial finance broker?

If you were to start your own small business, what would it sell?

Know your customer and lender, manage expectations and don’t over-promise.

Stay close to the transaction all the way until it completes and always stay in touch with your customer during and after the deal – there are likely to be further opportunities to work together in the future.

If I had the time and money then I would train to be a reflexologist and set up my business on a beautiful tropical island.

How do you think commercial lenders can improve client experience?

54 | NACFB

Listen to, and really get to know your key brokers more. Be honest when you can’t deliver what people are asking for.

What is your favourite piece of management/leadership advice?

Be true to yourself and make sure you do the best job you can do every day. Wake up and be prepared to take on the challenge.

Don’t walk past a problem.

Which person has inspired you the most?

Debbie Golec – my first ever female line manager. She always encouraged me to strive for something new and different.

If you could have dinner with anyone from history, who would it be and why?

Prince Albert – because he did so much for our country. He was a huge influencer in his own right, supporting innovation at a very early stage.

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United Trust Bank understands that you are looking to work with an approachable, adaptable and dependable finance partner who will look for reasons to say ‘yes’ to your proposals. That's why our book stays open.

Tel: 020 7190 5555 Email: info@utbank.co.uk www.utbank.co.uk we understand specialist banking