NACFB Magazine - November 2018

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Issue 64 November 2018

The magazine for the National Association of Commercial Finance Brokers

The rise of the ‘super broker’ As financial solutions become more and more diverse, so too are brokers evolving.

In this issue

Top tips for social media in business

The do’s and don’ts for a healthy online presence

Diversity and inclusion

An important perspective on putting people first

Investec’s annual asset finance survey Brokers anticipate growth and over half are expanding into new sectors

Buy-to-let lending for foreign nationals Not just mad dogs and Englishmen At Octopus Property, we know the challenges foreign nationals can face getting the funding they need.

That’s why we specialise in unconventional buy-to-let deals.

We take a flexible approach, knowing that every case is unique.

Whatever the location, experience or asset, we could work to offer funding.

Give a case a home at octopusproperty.com

Welcome | NACFB O

ver the last two months, I have attended a number of key events and met with a wide range of Members and Patrons.

From regional sector-specific days to a London Patrons’ Day, the team and I sought to stand before as many of our stakeholders as possible. We also staged our 2018 AGM this month at the Lending Summit, where I was pleased to see a high level of support, understanding and debate.

Firstly, thank you to all those who came along to these events and offered their feedback, constructive guidance and suggestions for steering the future of your trade Association.

You may already have heard me discuss this at any one of the events, but one topic that came up repeatedly was that of engagement.

The drive for better engagement seems to exist in all forms of modern life, but in our world, and within your Association, increasing the engagement with you – our Members and Patrons – remains at the very top of our to-do list.

This drive to communicate better is not just a one-way street, I am calling upon all our stakeholders to meet us in the middle and offer your thoughts and views on how the NACFB can do better to ensure our Members are at the heart of everything we do. There will also be additional opportunities to offer feedback throughout 2019, not least in our magazine, where I encourage our Members to use it as an opportunity to tell us, their fellow Members and Patrons about their successes and challenges in their world.

Closer on our horizon is our annual NACFB Gala Dinner on 29th November. Both the NACFB board of directors and head office team look forward to seeing, and engaging with, many of you there.

Until next time.

Graham Toy

For Professional Intermediaries Only Octopus Property is the trading name of Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Octopus Property Lending Ltd (Reg No 7531926) and Octopus Co-Lend Ltd (Reg No 8913299), Registered Office: 33 Holborn, London EC1N 2HT, registered in England and Wales and Dragonfly Finance S.ar.l. (Reg No B189290) Registered Office: Parc d’Activité Syrdall, 6 Rue Gabriel Lippmann, L-5365, Munsbach, Luxembourg registered in Luxembourg. Octopus Property Lending Ltd and Octopus Co-Lend Ltd are authorised and regulated by the Financial Conduct Authority.

Graham Toy CEO NACFB

In this October issue NACFB News 4-6 8 9

In the news Notes from our sponsor Dates for your diary

Compliance Update 10-12 Top tips for social media in business

Commercial Finance 14-15 Essential news bites

Cover Story 16-18 The rise of the ‘super broker’

Top Story 20

FCA confirms greater access for SMEs to the FOS

Introducing 22

Assetz to launch property crowdfunding platform in Q4

Case Studies 24-25 Creative property finance funds business acquisition 28 The top-up that kept the broker and client coming back for more

Special Features 34

Quality over quantity – lets go local 36-38 The importance of diversity, inclusion and understanding in the workplace 40-42 Commercial finance brokers overwhelmingly positive on growth 44 What does the interest rate rise mean for SMEs and their future plans?

Industry Guides 46-47 Cleared for take off - A guide to aviation finance 48-49 A successful relationship is the sum of its parts

Opinion & Commentary 50

Brokers can get involved with property auction finance 52-53 How (and why) lenders can bring more transparency to the table 54 Is it still safe to fund higher risk businesses?

Patron Profile 30-31 Tuscan Capital

Ask the Expert 32

Jonathan Bower

For further information Kieran Jones, communications manager t. 020 7101 0359 33 Eastcheap, London EC3M 1DT Email: Kieran.Jones@nacfb.org.uk

ADVERTISING & EDITING: Medianett t. 0203 818 0163 www.medianett.co.uk DESIGN & PRODUCTION: Carbide Finger Ltd t. 0845 812 8206

NACFB Magazine | 3

Buy-to-let lending for foreign nationals Not just mad dogs and Englishmen At Octopus Property, we know the challenges foreign nationals can face getting the funding they need.

That’s why we specialise in unconventional buy-to-let deals.

We take a flexible approach, knowing that every case is unique.

Whatever the location, experience or asset, we could work to offer funding.

Give a case a home at octopusproperty.com

Welcome | NACFB O

ver the last two months, I have attended a number of key events and met with a wide range of Members and Patrons.

From regional sector-specific days to a London Patrons’ Day, the team and I sought to stand before as many of our stakeholders as possible. We also staged our 2018 AGM this month at the Lending Summit, where I was pleased to see a high level of support, understanding and debate.

Firstly, thank you to all those who came along to these events and offered their feedback, constructive guidance and suggestions for steering the future of your trade Association.

You may already have heard me discuss this at any one of the events, but one topic that came up repeatedly was that of engagement.

The drive for better engagement seems to exist in all forms of modern life, but in our world, and within your Association, increasing the engagement with you – our Members and Patrons – remains at the very top of our to-do list.

This drive to communicate better is not just a one-way street, I am calling upon all our stakeholders to meet us in the middle and offer your thoughts and views on how the NACFB can do better to ensure our Members are at the heart of everything we do. There will also be additional opportunities to offer feedback throughout 2019, not least in our magazine, where I encourage our Members to use it as an opportunity to tell us, their fellow Members and Patrons about their successes and challenges in their world.

Closer on our horizon is our annual NACFB Gala Dinner on 29th November. Both the NACFB board of directors and head office team look forward to seeing, and engaging with, many of you there.

Until next time.

Graham Toy

For Professional Intermediaries Only Octopus Property is the trading name of Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Octopus Property Lending Ltd (Reg No 7531926) and Octopus Co-Lend Ltd (Reg No 8913299), Registered Office: 33 Holborn, London EC1N 2HT, registered in England and Wales and Dragonfly Finance S.ar.l. (Reg No B189290) Registered Office: Parc d’Activité Syrdall, 6 Rue Gabriel Lippmann, L-5365, Munsbach, Luxembourg registered in Luxembourg. Octopus Property Lending Ltd and Octopus Co-Lend Ltd are authorised and regulated by the Financial Conduct Authority.

Graham Toy CEO NACFB

In this October issue NACFB News 4-6 8 9

In the news Notes from our sponsor Dates for your diary

Compliance Update 10-12 Top tips for social media in business

Commercial Finance 14-15 Essential news bites

Cover Story 16-18 The rise of the ‘super broker’

Top Story 20

FCA confirms greater access for SMEs to the FOS

Introducing 22

Assetz to launch property crowdfunding platform in Q4

Case Studies 24-25 Creative property finance funds business acquisition 28 The top-up that kept the broker and client coming back for more

Special Features 34

Quality over quantity – lets go local 36-38 The importance of diversity, inclusion and understanding in the workplace 40-42 Commercial finance brokers overwhelmingly positive on growth 44 What does the interest rate rise mean for SMEs and their future plans?

Industry Guides 46-47 Cleared for take off - A guide to aviation finance 48-49 A successful relationship is the sum of its parts

Opinion & Commentary 50

Brokers can get involved with property auction finance 52-53 How (and why) lenders can bring more transparency to the table 54 Is it still safe to fund higher risk businesses?

Patron Profile 30-31 Tuscan Capital

Ask the Expert 32

Jonathan Bower

For further information Kieran Jones, communications manager t. 020 7101 0359 33 Eastcheap, London EC3M 1DT Email: Kieran.Jones@nacfb.org.uk

ADVERTISING & EDITING: Medianett t. 0203 818 0163 www.medianett.co.uk DESIGN & PRODUCTION: Carbide Finger Ltd t. 0845 812 8206

NACFB Magazine | 3

NACFB | in the news Association news and updates for November 2018

Tell them you’ve found someone who really understands you.

NACFB launches streamlined principle-based Code of Practice

T

he NACFB launched its revised Code of Practice on 8th November at our 2018 AGM. The streamlined code is now principlebased rather than prescriptive to ensure a more pragmatic approach in its application, and focused on outcomes for clients, rather than on process. The change also reflects the fact that our regulators also operate ‘principle-based’ regulation.

The NACFB Code of Practice lays out the framework under which Members and Member firms conduct their business. The code applies to all members of the Association.

The previous Code of Practice contained a set of generic rules, processes and procedures with some for specific industry sectors.

As it stood, within the existing framework, the Association felt that there was not enough transparency for stakeholders within the Code.

The revised code has undergone significant revisions, one of which is to remove processes and procedures from the document; these now sit separately and are clearer and more objective. A further benefit is that the code has been consolidated from 21 pages to just eight – ensuring it becomes a more practical working document.

The code, together with the NACFB Minimum Standards document, sets out and promotes the standards of compliance and professionalism that Members must meet in their business activities. NACFB Members commit to treating their clients fairly and responsibly, and to operating with integrity at all times.

They also commit to being timely, transparent and unambiguous in their business dealings.

for Business and the regulations set out by the Information Commissioner’s Office (ICO).

The code is not intended to sit within any regulatory hierarchy and there should be no conflict between the NACFB framework and any existing statutory regulatory regime – if there is, however, the latter will always prevail

When it comes to property finance, we care about developing something meaningful.

Importantly, the code is there to represent to clients and other stakeholders that in dealing with NACFB brokers you should expect to be dealt with in a way that matches that of any other professional service To view and download the new NACFB Code of Practice visit: nacfb.org.

The commitments are designed to sit alongside the FCA Principles 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.

4 | NACFB Magazine

NACFB | in the news Association news and updates for November 2018

Tell them you’ve found someone who really understands you.

NACFB launches streamlined principle-based Code of Practice

T

he NACFB launched its revised Code of Practice on 8th November at our 2018 AGM. The streamlined code is now principlebased rather than prescriptive to ensure a more pragmatic approach in its application, and focused on outcomes for clients, rather than on process. The change also reflects the fact that our regulators also operate ‘principle-based’ regulation.

The NACFB Code of Practice lays out the framework under which Members and Member firms conduct their business. The code applies to all members of the Association.

The previous Code of Practice contained a set of generic rules, processes and procedures with some for specific industry sectors.

As it stood, within the existing framework, the Association felt that there was not enough transparency for stakeholders within the Code.

The revised code has undergone significant revisions, one of which is to remove processes and procedures from the document; these now sit separately and are clearer and more objective. A further benefit is that the code has been consolidated from 21 pages to just eight – ensuring it becomes a more practical working document.

The code, together with the NACFB Minimum Standards document, sets out and promotes the standards of compliance and professionalism that Members must meet in their business activities. NACFB Members commit to treating their clients fairly and responsibly, and to operating with integrity at all times.

They also commit to being timely, transparent and unambiguous in their business dealings.

for Business and the regulations set out by the Information Commissioner’s Office (ICO).

The code is not intended to sit within any regulatory hierarchy and there should be no conflict between the NACFB framework and any existing statutory regulatory regime – if there is, however, the latter will always prevail

When it comes to property finance, we care about developing something meaningful.

Importantly, the code is there to represent to clients and other stakeholders that in dealing with NACFB brokers you should expect to be dealt with in a way that matches that of any other professional service To view and download the new NACFB Code of Practice visit: nacfb.org.

The commitments are designed to sit alongside the FCA Principles 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.

4 | NACFB Magazine

NACFB NEWS

Why join the NACFB? The National Association of Commercial Finance Brokers (NACFB) is the flagship trade body for UK commercial finance brokers. Our Association comprises over 1600 commercial finance brokers covering the whole of the UK. Our Members are required to have FCA Permissions, Professional

Indemnity Insurance and a Data Protection Licence.

The Association partners with all Members to foster professional expertise, embracing the highest industry and regulatory standards to help your business prosper.

CODE OF PRACTICE

COLLABORATIVE EVENTS

Helping all our Members adhere to a consistent set of principles assuring both lenders and SMEs.

COMPLIANCE & REGULATION Delivering a comprehensive and bespoke compliance support package for all Members.

Hosting the Commercial Finance Expo and CPD accredited workshops alongside regional training and educational roadshows.

NACFB hosts packed out Patrons’ Day Representatives from over 50 NACFB Patrons joined chairman Paul Goodman and members of the senior executive at our October Patrons’ Day, a forum designed to share the Association’s progress and look ahead to future developments.

The opening remarks from Paul outlined that while the NACFB is – and always will be – a brokerdriven Association, it remains very much aware that we form only part of a wider commercial finance community. A community that includes brokers, lenders, lawyers, valuers and accountants all working together with the sole aim of helping to fund UK business.

6 | NACFB Magazine

NACFB CEO Graham Toy used the forum as a platform to share, and obtain feedback on, some of the Association’s key projects and developments. He spoke of the NACFB’s brand refreshing as well as the new look magazine and website. Graham also outlined upcoming changes to the board of directors; ensuring there is lender input and representation on future decision making.

Gathered Patrons collectively recognised the positive changes that the NACFB has made in 2018 and looked forward to seeing a continuation on the same trajectory.

As with feedback received from brokers, Patrons also expressed

PI INSURANCE

Enabling a closer working lender relationship – making processes easier and more time efficient.

their desire to have greater clarity of communication from the NACFB and more distinctly tailored messages to each sector.

This was only the Association’s third ever Patrons’ Day, but similar opportunities will form part of the NACFB’s events programme in 2019.

How can the NACFB work better to help our Patrons? Were you unable to attend and feel like offering your own perspective? Get in touch, the NACFB is not just receptive to feedback on Members and Patrons’ days – you can reach us any time by contacting any member of the team via phone or email.

Competitively priced Professional Indemnity Cover helps keep Members’ costs down and mitigates risk.

BROKER & LENDER ENGAGEMENT

INDUSTRY VOICE

BRAND & REPUTATION Promoting a kitemark of quality and trust with clients and lenders, maintaining sector confidence.

w. t. e. a.

nacfb.org 02071010359 admin@nacfb.org.uk 33 Eastcheap, London, EC3M 1DT

Maintaining an authoritative dialogue on behalf of Members before lenders, regulators and the Government.

@NACFB linkedin.com/in/nacfb

NACFB NEWS

Why join the NACFB? The National Association of Commercial Finance Brokers (NACFB) is the flagship trade body for UK commercial finance brokers. Our Association comprises over 1600 commercial finance brokers covering the whole of the UK. Our Members are required to have FCA Permissions, Professional

Indemnity Insurance and a Data Protection Licence.

The Association partners with all Members to foster professional expertise, embracing the highest industry and regulatory standards to help your business prosper.

CODE OF PRACTICE

COLLABORATIVE EVENTS

Helping all our Members adhere to a consistent set of principles assuring both lenders and SMEs.

COMPLIANCE & REGULATION Delivering a comprehensive and bespoke compliance support package for all Members.

Hosting the Commercial Finance Expo and CPD accredited workshops alongside regional training and educational roadshows.

NACFB hosts packed out Patrons’ Day Representatives from over 50 NACFB Patrons joined chairman Paul Goodman and members of the senior executive at our October Patrons’ Day, a forum designed to share the Association’s progress and look ahead to future developments.

The opening remarks from Paul outlined that while the NACFB is – and always will be – a brokerdriven Association, it remains very much aware that we form only part of a wider commercial finance community. A community that includes brokers, lenders, lawyers, valuers and accountants all working together with the sole aim of helping to fund UK business.

6 | NACFB Magazine

NACFB CEO Graham Toy used the forum as a platform to share, and obtain feedback on, some of the Association’s key projects and developments. He spoke of the NACFB’s brand refreshing as well as the new look magazine and website. Graham also outlined upcoming changes to the board of directors; ensuring there is lender input and representation on future decision making.

Gathered Patrons collectively recognised the positive changes that the NACFB has made in 2018 and looked forward to seeing a continuation on the same trajectory.

As with feedback received from brokers, Patrons also expressed

PI INSURANCE

Enabling a closer working lender relationship – making processes easier and more time efficient.

their desire to have greater clarity of communication from the NACFB and more distinctly tailored messages to each sector.

This was only the Association’s third ever Patrons’ Day, but similar opportunities will form part of the NACFB’s events programme in 2019.

How can the NACFB work better to help our Patrons? Were you unable to attend and feel like offering your own perspective? Get in touch, the NACFB is not just receptive to feedback on Members and Patrons’ days – you can reach us any time by contacting any member of the team via phone or email.

Competitively priced Professional Indemnity Cover helps keep Members’ costs down and mitigates risk.

BROKER & LENDER ENGAGEMENT

INDUSTRY VOICE

BRAND & REPUTATION Promoting a kitemark of quality and trust with clients and lenders, maintaining sector confidence.

w. t. e. a.

nacfb.org 02071010359 admin@nacfb.org.uk 33 Eastcheap, London, EC3M 1DT

Maintaining an authoritative dialogue on behalf of Members before lenders, regulators and the Government.

@NACFB linkedin.com/in/nacfb

NACFB NEWS

NACFB NEWS

Dates for your diary Social Media for Business - Leeds When: 13 November – 10:00 - 15:00 Where: Hilton Leeds City, Neville Street, Leeds LS1 4BX

Notes from our sponsor

Social Media for Business - Birmingham When: 21 November – 10:00 - 15:00 Where: Radisson Blu Birmingham, 12 Holloway Circus Queensway, Birmingham B1 1BT Social Media for Business - Gatwick When: 27 November – 10:00 - 15:00 Where: Hilton London Gatwick Airport, South Terminal, Gatwick, Surry RH6 0LL

Andy Bishop UK Director of Business Development Lloyds Bank

Andy Bishop, national director of business development – SME banking at Lloyds Bank, outlines the current state of the market and what opportunities and stumbling blocks there may be for brokers.

What should brokers be aware of with the current state of the market?

While we hear concerns about the current state of the market – and undoubtedly some of those are more than justified – we’re currently seeing the broker market continue to expand.

From a Lloyds Banking Group perspective, we’re up year-onyear around 30% in terms of introductions and sanctioned lending for brokers. On invoice finance we’re up about 25% and on asset finance we’re up around 30%.

That said, for brokers’ clients, some sectors will be experiencing more uncertainty than others, particularly those where they’re heavily reliant on EU migration for staffing. But overall, the market is holding up remarkably well.

What are the current opportunities for brokers in this market?

The opportunities are enormous, mainly because there’s no ‘one funder’ out there that will be able to do everything to support SME businesses.

8 | NACFB Magazine

The broker is in a unique position where they have access to whole-of-market funding across traditional finance, as well as secondary and niche finance arrangements. Some of this will be brilliant for SMEs that need more support than a single funder can provide.

What are the biggest stumbling blocks for brokers?

How can Lloyds Bank help brokers to make the most of these opportunities?

The role of Lloyds Bank’s business development managers is to help brokers navigate what can be quite complex client needs.

The Lloyds Bank proposition brings together term lending, invoice finance and asset finance all under one roof. Brokers can access a wide range of products and services for their clients through one single point of contact: their Lloyds Bank business development manager.

We also supply a lot of support to brokers; working with them to help them shape transactions and propositions. This is particularly important as brokers seek to go up the value chain and deal with much larger businesses than they perhaps would have done historically, where the financing needs may be more complex.

There are many funders now available in the market, so one of the biggest challenges for brokers is being able to ensure a client gets the right type of finance at the appropriate time.

What is Lloyds Bank’s new offering around personal wealth management?

We now offer personal lending for brokers’ commercial clients.

This is lending which, from a regulatory perspective, would be considered personal rather than commercial, but is more complex than can be managed than through, say, a residential mortgage or similar. This is a way of dealing with more complex financing needs. It’s a bespoke service offered through our dedicated wealth managers.

And finally, why is it important for NACFB Members to take part in the Lending Data Project?

We’re currently working closely with the NACFB on its Lending Data Project. It feeds into Lloyds Bank’s overall strategy of Helping Britain Prosper.

The Lending Data Project is an incredibly important piece of insight for two crucial reasons: 1.It’s a demonstration of the positive impact commercial finance brokers are having on SME businesses.

2.It will support NACFB in terms of its share of voice in the regulatory and political environment.

LendInvest Broker Academy When: 27 November – 10:00 - 15:00 Where: LendInvest, Two Fitzroy Place, 8 Mortimer Street, Fitzrovia, London W1T 3JJ NACFB Gala Dinner & Awards When: 29 November – 18:30 - late Where: Park Plaza Westminster Bridge, 200 Westminster Bridge Rd, Lambeth, London, SE1 7UT Commercial Mortgages Financial Day When: 4 December – 8:30 - 16:30 Where: Radisson Blu Edwardian, Vanderbilt 68-86 Cromwell Road, London, SW7 5BT

That’s why I strongly urge all NACFB Members to participate fully in the project.

You can find out more about the upcoming NACFB events programme by visiting: www.NACFB.org/events or by emailing Claire Luckhurst on Claire.Luckhurst@NACFB.org.uk

NACFB Magazine | 9

NACFB NEWS

NACFB NEWS

Dates for your diary Social Media for Business - Leeds When: 13 November – 10:00 - 15:00 Where: Hilton Leeds City, Neville Street, Leeds LS1 4BX

Notes from our sponsor

Social Media for Business - Birmingham When: 21 November – 10:00 - 15:00 Where: Radisson Blu Birmingham, 12 Holloway Circus Queensway, Birmingham B1 1BT Social Media for Business - Gatwick When: 27 November – 10:00 - 15:00 Where: Hilton London Gatwick Airport, South Terminal, Gatwick, Surry RH6 0LL

Andy Bishop UK Director of Business Development Lloyds Bank

Andy Bishop, national director of business development – SME banking at Lloyds Bank, outlines the current state of the market and what opportunities and stumbling blocks there may be for brokers.

What should brokers be aware of with the current state of the market?

While we hear concerns about the current state of the market – and undoubtedly some of those are more than justified – we’re currently seeing the broker market continue to expand.

From a Lloyds Banking Group perspective, we’re up year-onyear around 30% in terms of introductions and sanctioned lending for brokers. On invoice finance we’re up about 25% and on asset finance we’re up around 30%.

That said, for brokers’ clients, some sectors will be experiencing more uncertainty than others, particularly those where they’re heavily reliant on EU migration for staffing. But overall, the market is holding up remarkably well.

What are the current opportunities for brokers in this market?

The opportunities are enormous, mainly because there’s no ‘one funder’ out there that will be able to do everything to support SME businesses.

8 | NACFB Magazine

The broker is in a unique position where they have access to whole-of-market funding across traditional finance, as well as secondary and niche finance arrangements. Some of this will be brilliant for SMEs that need more support than a single funder can provide.

What are the biggest stumbling blocks for brokers?

How can Lloyds Bank help brokers to make the most of these opportunities?

The role of Lloyds Bank’s business development managers is to help brokers navigate what can be quite complex client needs.

The Lloyds Bank proposition brings together term lending, invoice finance and asset finance all under one roof. Brokers can access a wide range of products and services for their clients through one single point of contact: their Lloyds Bank business development manager.

We also supply a lot of support to brokers; working with them to help them shape transactions and propositions. This is particularly important as brokers seek to go up the value chain and deal with much larger businesses than they perhaps would have done historically, where the financing needs may be more complex.

There are many funders now available in the market, so one of the biggest challenges for brokers is being able to ensure a client gets the right type of finance at the appropriate time.

What is Lloyds Bank’s new offering around personal wealth management?

We now offer personal lending for brokers’ commercial clients.

This is lending which, from a regulatory perspective, would be considered personal rather than commercial, but is more complex than can be managed than through, say, a residential mortgage or similar. This is a way of dealing with more complex financing needs. It’s a bespoke service offered through our dedicated wealth managers.

And finally, why is it important for NACFB Members to take part in the Lending Data Project?

We’re currently working closely with the NACFB on its Lending Data Project. It feeds into Lloyds Bank’s overall strategy of Helping Britain Prosper.

The Lending Data Project is an incredibly important piece of insight for two crucial reasons: 1.It’s a demonstration of the positive impact commercial finance brokers are having on SME businesses.

2.It will support NACFB in terms of its share of voice in the regulatory and political environment.

LendInvest Broker Academy When: 27 November – 10:00 - 15:00 Where: LendInvest, Two Fitzroy Place, 8 Mortimer Street, Fitzrovia, London W1T 3JJ NACFB Gala Dinner & Awards When: 29 November – 18:30 - late Where: Park Plaza Westminster Bridge, 200 Westminster Bridge Rd, Lambeth, London, SE1 7UT Commercial Mortgages Financial Day When: 4 December – 8:30 - 16:30 Where: Radisson Blu Edwardian, Vanderbilt 68-86 Cromwell Road, London, SW7 5BT

That’s why I strongly urge all NACFB Members to participate fully in the project.

You can find out more about the upcoming NACFB events programme by visiting: www.NACFB.org/events or by emailing Claire Luckhurst on Claire.Luckhurst@NACFB.org.uk

NACFB Magazine | 9

Compliance | update The latest from our in-house compliance team

Top tips for social media in business Following a series of sold out social media workshops, NACFB Compliance Officer Nicholas Murphy shares his top tips on managing your online presence

Nicholas Murphy NACFB Compliance Officer NACFB

O

n behalf of the Association I have been delivering a series of workshops on Social Media.

This has been a refreshing step away from technical and compliance related subjects but sits within our remit of raising professional standards through training and education. The subject was also top of the request list from our Members.

Through the course of these workshops I have met many Members all of whom have come with varying technological and digital experience. Ranging from those who do not yet have a business website or a social media account, to those wanting to refine and focus their existing online efforts. The feedback has been overwhelmingly positive and brokers have left feeling more confident and comfortable with the idea of using social media in a professional capacity.

In this article I would like to share some of the key learning points from these digital skills workshops with you.

10 | NACFB Magazine

Understanding the terminology For some of us, posting a tweet with a hashtag and knowing the difference between ‘replying’ and ‘mentioning’ is common practice.

However, software and social media platforms are changing and popping up on an almost daily occurrence - even the more experienced among us may across a term we have never heard before.

brand awareness. Quantifying how many times your content has been seen is also a valuable tool, not easily achieved through traditional billboard or newspaper advertising. But, ensuring your followers are regularly engaged in your content will allow you to build a loyal follower base; one that is more likely to remember you the next time they are seeking funding.

Whilst terms like ‘troll’ and ‘viral’ can get the imagination going, the important social media jargon to be considered are ‘impressions’, ‘engagement’ and ‘reach’. These three terms are essential in measuring the success of your efforts online and provide a basis for any social media strategy.

Recognising the opportunity During this course of the workshops, I have listened to many of the concerns of our Members when it comes to starting out on social media. Brokers quite rightly have concerns about privacy and are often sceptical, questioning how social media can be used in the commercial finance sector.

Impression – The number of times a post has been seen on a user’s feed Engagement - The number of interactions with your post Reach – The number of accounts, or individuals, your posts are reaching on social media Achieving a high number of impressions is essential for increasing

Some of the opportunities to be seized from the correct use of social media are lead generation, enhanced credibility, deeper market research, increased industry influence, further web traffic, potential recruitment and more direct customer service.

However, as we discuss in the workshop, in the commercial finance sector one of the most important opportunities is brand awareness.

Even the major high street banks use their social media to support

NACFB Magazine | 11

Compliance | update The latest from our in-house compliance team

Top tips for social media in business Following a series of sold out social media workshops, NACFB Compliance Officer Nicholas Murphy shares his top tips on managing your online presence

Nicholas Murphy NACFB Compliance Officer NACFB

O

n behalf of the Association I have been delivering a series of workshops on Social Media.

This has been a refreshing step away from technical and compliance related subjects but sits within our remit of raising professional standards through training and education. The subject was also top of the request list from our Members.

Through the course of these workshops I have met many Members all of whom have come with varying technological and digital experience. Ranging from those who do not yet have a business website or a social media account, to those wanting to refine and focus their existing online efforts. The feedback has been overwhelmingly positive and brokers have left feeling more confident and comfortable with the idea of using social media in a professional capacity.

In this article I would like to share some of the key learning points from these digital skills workshops with you.

10 | NACFB Magazine

Understanding the terminology For some of us, posting a tweet with a hashtag and knowing the difference between ‘replying’ and ‘mentioning’ is common practice.

However, software and social media platforms are changing and popping up on an almost daily occurrence - even the more experienced among us may across a term we have never heard before.

brand awareness. Quantifying how many times your content has been seen is also a valuable tool, not easily achieved through traditional billboard or newspaper advertising. But, ensuring your followers are regularly engaged in your content will allow you to build a loyal follower base; one that is more likely to remember you the next time they are seeking funding.

Whilst terms like ‘troll’ and ‘viral’ can get the imagination going, the important social media jargon to be considered are ‘impressions’, ‘engagement’ and ‘reach’. These three terms are essential in measuring the success of your efforts online and provide a basis for any social media strategy.

Recognising the opportunity During this course of the workshops, I have listened to many of the concerns of our Members when it comes to starting out on social media. Brokers quite rightly have concerns about privacy and are often sceptical, questioning how social media can be used in the commercial finance sector.

Impression – The number of times a post has been seen on a user’s feed Engagement - The number of interactions with your post Reach – The number of accounts, or individuals, your posts are reaching on social media Achieving a high number of impressions is essential for increasing

Some of the opportunities to be seized from the correct use of social media are lead generation, enhanced credibility, deeper market research, increased industry influence, further web traffic, potential recruitment and more direct customer service.

However, as we discuss in the workshop, in the commercial finance sector one of the most important opportunities is brand awareness.

Even the major high street banks use their social media to support

NACFB Magazine | 11

COMPLIANCE

NACFB Compliance support is available to all NACFB Members. Our team will provide you and your Brokerage with the guidance, training and support necessary to remain fully compliant with both regulatory requirements and the NACFB Minimum Standards.

their brand and bolster existing PR efforts. Indeed, one of the main reasons a social media user will stop interacting with your company account is if they feel they have become your customer not your peer.

Creating a ‘brand persona’ Whether you are starting out on your social media journey, or refining your current strategy, it is important to have your customer base in mind when posting to your social networks.

By creating a brand persona, you can better describe your typical customer base. This persona is constructed of age, gender, job and interests. In keeping two or three brand personas in mind, and sharing these with your team, you can ensure that the posts on your social networks are relevant and interesting to the clients you are seeking to interact with.

Gathering the right content For a consistent and engaging social media presence, it is essential to know the difference between good and bad content: Good content: Relevant news stories Developments in the sector Networking sessions Professional opinions Events attended

Bad content: Political opinions Controversial topics

25 Years Sector Experience

Complaining about customers Anything you wouldn’t say aloud in a public setting Mapping out the strategy In establishing or refining your online presence, working to a strategy allows you to set goals and ultimately measure how successful your online efforts are. For many of the Brokers I have met at our workshops, two to three unique posts per week are manageable. Many social media users fall into the trap of posting multiple times per day, however, maintaining this momentum can prove resource intensive.

Your new strategy should state who will be managing the social media for your business, and whether this will be their primary role. This allows for time to be afforded to the staff member to manage the social media effectively.

Utilising your website & Search Engine Optimisation (SEO) Your website is the essential anchor point of all your social media efforts.

It is important that your website contains links to each of your social media networks, and in turn, each of your social media networks should link to your website.

There are many things you can do yourself to ensure your company site ranks high; post relevant content, ensure there are links on every page, alongside clean and categorised content featuring relevant keywords.

However, another essential part of the push to increase your ranking is to ensure your website is linked back to all your posts on social media.

Measuring success Without measuring your efforts online, it can be impossible to further strengthen your offering. Each of the major social media networks offer native software to allow you to analyse and report in detail your number of impressions, engagements, video views and reach. By using the analytical tools built in to Facebook, LinkedIn, Twitter and Instagram, you will discover what times of day are best to post and what kind of posts have better engagement with your followers. By taking advantage of the data available to you, over time you will offer a more refined experience for your followers.

In attending our workshops, Members have been able to consider and re-visit their social media and digital marketing strategies and we have discussed the tools necessary for analysing and reporting their efforts. I hope to see you at an NACFB Compliance workshop in the new year.

Patron Engagement

Promoting a kitemark of quality and trust before the regulator, clients and lenders maintaining sector confidence

Criticisms of the competition

Search Engine Optimisation (SEO) is the process of maximising the number of visitors to your website

12 | NACFB Magazine

by ensuring your site appears higher on search engine results lists. For example, in the case of Bridging finance, when a potential client enters ‘short term business loans’ into their search engine, where does your company rank?

Members of the NACFB benefit from access to a wide range of bespoke template documents, help-desk support, regulatory updates, targeted workshops and access to our MyNACFB training portal.

Facilitating harmonisation between key stakeholders when new regulation is introduced.

Calendar of Workshops Centralised Personal Support

Hosting bespoke workshops, training sessions and webinars on a diverse range of industry matters.

Delivering high-quality expert insight via email and telephone as well as consultations in person.

Model Office & Pragmatic Support Providing a full suite of the latest customisable working documents for your business.

w. t. e. a.

nacfbcompliance.co.uk 02071010359 compliance@nacfb.org.uk 33 Eastcheap, London, EC3M 1DT

Regulatory Dialogue & Future Insight Maintaining a dialogue with the regulator keeping ahead of the curve.

@NACFBCompliance linkedin.com/in/nacfb

COMPLIANCE

NACFB Compliance support is available to all NACFB Members. Our team will provide you and your Brokerage with the guidance, training and support necessary to remain fully compliant with both regulatory requirements and the NACFB Minimum Standards.

their brand and bolster existing PR efforts. Indeed, one of the main reasons a social media user will stop interacting with your company account is if they feel they have become your customer not your peer.

Creating a ‘brand persona’ Whether you are starting out on your social media journey, or refining your current strategy, it is important to have your customer base in mind when posting to your social networks.

By creating a brand persona, you can better describe your typical customer base. This persona is constructed of age, gender, job and interests. In keeping two or three brand personas in mind, and sharing these with your team, you can ensure that the posts on your social networks are relevant and interesting to the clients you are seeking to interact with.

Gathering the right content For a consistent and engaging social media presence, it is essential to know the difference between good and bad content: Good content: Relevant news stories Developments in the sector Networking sessions Professional opinions Events attended

Bad content: Political opinions Controversial topics

25 Years Sector Experience

Complaining about customers Anything you wouldn’t say aloud in a public setting Mapping out the strategy In establishing or refining your online presence, working to a strategy allows you to set goals and ultimately measure how successful your online efforts are. For many of the Brokers I have met at our workshops, two to three unique posts per week are manageable. Many social media users fall into the trap of posting multiple times per day, however, maintaining this momentum can prove resource intensive.

Your new strategy should state who will be managing the social media for your business, and whether this will be their primary role. This allows for time to be afforded to the staff member to manage the social media effectively.

Utilising your website & Search Engine Optimisation (SEO) Your website is the essential anchor point of all your social media efforts.

It is important that your website contains links to each of your social media networks, and in turn, each of your social media networks should link to your website.

There are many things you can do yourself to ensure your company site ranks high; post relevant content, ensure there are links on every page, alongside clean and categorised content featuring relevant keywords.

However, another essential part of the push to increase your ranking is to ensure your website is linked back to all your posts on social media.

Measuring success Without measuring your efforts online, it can be impossible to further strengthen your offering. Each of the major social media networks offer native software to allow you to analyse and report in detail your number of impressions, engagements, video views and reach. By using the analytical tools built in to Facebook, LinkedIn, Twitter and Instagram, you will discover what times of day are best to post and what kind of posts have better engagement with your followers. By taking advantage of the data available to you, over time you will offer a more refined experience for your followers.

In attending our workshops, Members have been able to consider and re-visit their social media and digital marketing strategies and we have discussed the tools necessary for analysing and reporting their efforts. I hope to see you at an NACFB Compliance workshop in the new year.

Patron Engagement

Promoting a kitemark of quality and trust before the regulator, clients and lenders maintaining sector confidence

Criticisms of the competition

Search Engine Optimisation (SEO) is the process of maximising the number of visitors to your website

12 | NACFB Magazine

by ensuring your site appears higher on search engine results lists. For example, in the case of Bridging finance, when a potential client enters ‘short term business loans’ into their search engine, where does your company rank?

Members of the NACFB benefit from access to a wide range of bespoke template documents, help-desk support, regulatory updates, targeted workshops and access to our MyNACFB training portal.

Facilitating harmonisation between key stakeholders when new regulation is introduced.

Calendar of Workshops Centralised Personal Support

Hosting bespoke workshops, training sessions and webinars on a diverse range of industry matters.

Delivering high-quality expert insight via email and telephone as well as consultations in person.

Model Office & Pragmatic Support Providing a full suite of the latest customisable working documents for your business.

w. t. e. a.

nacfbcompliance.co.uk 02071010359 compliance@nacfb.org.uk 33 Eastcheap, London, EC3M 1DT

Regulatory Dialogue & Future Insight Maintaining a dialogue with the regulator keeping ahead of the curve.

@NACFBCompliance linkedin.com/in/nacfb

Commercial Finance

Masthaven reaches £500m in assets

Masthaven has announced that it has generated £500m in assets driven by the growth in its diversified lending across short-term and longterm property finance.

The specialist bank has also generated £1bn of loan applications since it launched as a bank in 2016.

Masthaven reported that over 15,000 savings accounts have now been opened.

Aldermore agrees over £200m of new invoice finance facilities

HTB secures ENABLE Guarantee to support SME housebuilders Hampshire Trust Bank (HTB) has secured an ENABLE Guarantee from the British Business Bank (BBB) to help it finance SME housebuilders across the UK. The transaction is expected to allow the specialist bank and BBB to support the building of new housing to a value of over £500m over the lifetime of the guarantee.

Just Cashflow quadruples max facility size Just Cash Flow PLC has increased the upper limit on its range of flexible finance facilities from £500,000 to £2m following a rise in customer demand.

The £2m upper limit applies to new and existing customers and the fintech lender will provide finance significantly in excess of the limit on a case-by-case basis.

Aldermore has announced that it has delivered over £200m of new invoice finance facilities to UK SMEs in the last 12 months.

The specialist bank has achieved this by hiring a team of senior business development and relationship managers, enabling Aldermore to provide funding into the private equity, acquisitions, back-to-back funding, asset-based lending and specialist finance spaces.

STB Commercial Finance opens Leeds office

STB Commercial Finance has opened a new office in Leeds as it continues its national expansion.

The office – which is based at Minerva House on East Parade – will be headed up by John Gribbon, regional director at STB Commercial Finance.

He is joined by Victoria Conway, portfolio and structuring director, and Paul Goodchild, who was recently appointed as regional sales director for Yorkshire.

Roma doubles sales and underwriting teams

Roma Finance has doubled the size of its BDM and underwriting teams.

This comes after the bridging and development lender reported an 80% year-onyear increase in H1 2018 lending volumes last month.

Its sales team has added six new members.

Assetz to launch property crowdfunding platform in Q4

New property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

The platform – part of the Assetz group of businesses, which includes Assetz Capital – allows users to invest in a range of properties, from student accommodation, privately rented houses and apartments to affordable housing.

Hope Capital launches fixed-fee loan Hope Capital has introduced a fixed-fee loan.

The bridging lender’s product is available up to 75% LTV and for a term of between one to six months, while the actual fee will be agreed on a case-by-case basis.

Hope added that the fixed-fee loan has no complicated interest calculations or hidden fees.

Octopus Property makes changes to residential products Octopus Property has revamped its bridge-to-let, development exit and refurbishment products.

The specialist lender has reduced rates to 6.99% per annum for its bridge-to-let and development exit products.

These products have a minimum loan size of £500,000 and loans over £10m will be considered.

Fund your clients faster.

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

Esme is the straightforward business loan. No early repayment charges and no hidden fees. Just a simple, paperless application and competitive rates. £10k - £150k Unsecured from 1 - 5 years

Search ‘Esme loans’ Applicant must be

£

£

© Esme Loans Limited, company number: 10411077. Registered address, 250 Bishopsgate, London, United Kingdom, EC2M 4AA.

14 | NACFB Magazine

NACFB Magazine | 15

Commercial Finance

Masthaven reaches £500m in assets

Masthaven has announced that it has generated £500m in assets driven by the growth in its diversified lending across short-term and longterm property finance.

The specialist bank has also generated £1bn of loan applications since it launched as a bank in 2016.

Masthaven reported that over 15,000 savings accounts have now been opened.

Aldermore agrees over £200m of new invoice finance facilities

HTB secures ENABLE Guarantee to support SME housebuilders Hampshire Trust Bank (HTB) has secured an ENABLE Guarantee from the British Business Bank (BBB) to help it finance SME housebuilders across the UK. The transaction is expected to allow the specialist bank and BBB to support the building of new housing to a value of over £500m over the lifetime of the guarantee.

Just Cashflow quadruples max facility size Just Cash Flow PLC has increased the upper limit on its range of flexible finance facilities from £500,000 to £2m following a rise in customer demand.

The £2m upper limit applies to new and existing customers and the fintech lender will provide finance significantly in excess of the limit on a case-by-case basis.

Aldermore has announced that it has delivered over £200m of new invoice finance facilities to UK SMEs in the last 12 months.

The specialist bank has achieved this by hiring a team of senior business development and relationship managers, enabling Aldermore to provide funding into the private equity, acquisitions, back-to-back funding, asset-based lending and specialist finance spaces.

STB Commercial Finance opens Leeds office

STB Commercial Finance has opened a new office in Leeds as it continues its national expansion.

The office – which is based at Minerva House on East Parade – will be headed up by John Gribbon, regional director at STB Commercial Finance.

He is joined by Victoria Conway, portfolio and structuring director, and Paul Goodchild, who was recently appointed as regional sales director for Yorkshire.

Roma doubles sales and underwriting teams

Roma Finance has doubled the size of its BDM and underwriting teams.

This comes after the bridging and development lender reported an 80% year-onyear increase in H1 2018 lending volumes last month.

Its sales team has added six new members.

Assetz to launch property crowdfunding platform in Q4

New property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

The platform – part of the Assetz group of businesses, which includes Assetz Capital – allows users to invest in a range of properties, from student accommodation, privately rented houses and apartments to affordable housing.

Hope Capital launches fixed-fee loan Hope Capital has introduced a fixed-fee loan.

The bridging lender’s product is available up to 75% LTV and for a term of between one to six months, while the actual fee will be agreed on a case-by-case basis.

Hope added that the fixed-fee loan has no complicated interest calculations or hidden fees.

Octopus Property makes changes to residential products Octopus Property has revamped its bridge-to-let, development exit and refurbishment products.

The specialist lender has reduced rates to 6.99% per annum for its bridge-to-let and development exit products.

These products have a minimum loan size of £500,000 and loans over £10m will be considered.

Fund your clients faster.

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

Esme is the straightforward business loan. No early repayment charges and no hidden fees. Just a simple, paperless application and competitive rates. £10k - £150k Unsecured from 1 - 5 years

Search ‘Esme loans’ Applicant must be

£

£

© Esme Loans Limited, company number: 10411077. Registered address, 250 Bishopsgate, London, United Kingdom, EC2M 4AA.

14 | NACFB Magazine

NACFB Magazine | 15

Cover Story | feature

The rise of the ‘super broker’ With a surge of specialist brokers eyeing new markets, could the sector be witnessing the emergence of intermediaries whose offerings are more diverse than ever before?

Tom Belger Senior reporter Bridging and Commercial Super brokers – according to one specialist finance lender – are adaptable introducers capable of providing a service across a range of specialities to serve their clients better.

For example, this means that a broker would be able to support a client when they are looking for property or business finance.

One industry expert also felt that brokers would be “foolish” to limit their market by just operating within one realm; by operating across more markets, it meant that brokers had more opportunities to write business.

These opinions suggest that we might be seeing the end of the specialist finance broker.

A recent survey from Investec Asset Finance Group backed up the rise of these multi-disciplinary brokers after it found that 57% of asset finance brokers were aiming to expand into new sectors.

16 | NACFB Magazine

When asked how they would achieve their growth targets, 37% expected to shift towards different products, including specialist loans such as VAT finance or those with more complex structures.

Is there a rise in super brokers entering new markets?

Zuhair Mirza, principal at Avamore Capital, said it had seen a rise, and that in many cases it could see the rationale for this given that relationship-driven brokers want to assist their clients as broadly as possible.

“We tend to see that when brokers do enter new markets they invest in building both knowledge and relationships in that sector.

“One example of this which we have seen is at the NACFB round tables.”

Recently there has been an increase in lenders, packagers and associations hosting workshops to help train brokers on different areas of finance.

Throughout the year the NACFB has hosted several roundtable broker days focusing on various areas of the specialist finance market, ranging from bridging finance to invoice and factoring discounting.

NACFB Magazine | 17

Cover Story | feature

The rise of the ‘super broker’ With a surge of specialist brokers eyeing new markets, could the sector be witnessing the emergence of intermediaries whose offerings are more diverse than ever before?

Tom Belger Senior reporter Bridging and Commercial Super brokers – according to one specialist finance lender – are adaptable introducers capable of providing a service across a range of specialities to serve their clients better.

For example, this means that a broker would be able to support a client when they are looking for property or business finance.

One industry expert also felt that brokers would be “foolish” to limit their market by just operating within one realm; by operating across more markets, it meant that brokers had more opportunities to write business.

These opinions suggest that we might be seeing the end of the specialist finance broker.

A recent survey from Investec Asset Finance Group backed up the rise of these multi-disciplinary brokers after it found that 57% of asset finance brokers were aiming to expand into new sectors.

16 | NACFB Magazine

When asked how they would achieve their growth targets, 37% expected to shift towards different products, including specialist loans such as VAT finance or those with more complex structures.

Is there a rise in super brokers entering new markets?

Zuhair Mirza, principal at Avamore Capital, said it had seen a rise, and that in many cases it could see the rationale for this given that relationship-driven brokers want to assist their clients as broadly as possible.

“We tend to see that when brokers do enter new markets they invest in building both knowledge and relationships in that sector.

“One example of this which we have seen is at the NACFB round tables.”

Recently there has been an increase in lenders, packagers and associations hosting workshops to help train brokers on different areas of finance.

Throughout the year the NACFB has hosted several roundtable broker days focusing on various areas of the specialist finance market, ranging from bridging finance to invoice and factoring discounting.

NACFB Magazine | 17

COVER STORY

Innovation and diversification are the key drivers to being successful in this market.

The series of bespoke events allow broker members to learn more about these areas of the market and hear from lenders operating in those sectors.

Some 132 brokers attended six roadshows held by Octopus Property across England last year, and the lender’s event schedule in 2018 saw similar numbers.

In August, Brightstar launched a specialist lending webinar programme.

The distributor’s online events have been designed to help brokers maximise the opportunity presented by the expanding specialist market.

Nick Holding-Parsons, asset finance adviser at Arc & Co, felt that there had definitely been a notable surge in brokers entering new sectors.

“Where your typical real estate debt adviser would only be focusing on development facilities or investment products, you now have them also providing equity packages.

“This means they can offer their clients more than one service.”

As to why brokers might look to diversify their offerings, Jo Breeden, managing director at Crystal Specialist Finance, said that clients had much more complex needs than just offering residential or BTL mortgages.

“With market conditions, changes in legislation and investors’ desire to maximise yields, we are seeing more portfolio buy-to-lets, bridging, semi-commercial and development applications.

“These sectors need to be part of a broker’s arsenal.”

Meanwhile, Kevin Vendel, head of sales at Spotcap, added: “It wasn’t long ago that our partners were purely commercial finance brokers.

“For example, we’re increasingly seeing mortgage brokers keen to

18 | NACFB Magazine

learn about business loans and curious about our product.”

grow, having more than four could then be more of a commercial buy-to-let.

Does this mean the end of the specialist finance broker?

Chris Oatway of LDNfinance felt the market had changed so much that there was now a requirement for all brokers across the board to upskill and diversify the areas of the market in which they operated.

“The customer may also then need a second charge to do refurbishment to their property, or a bridge for a chain-break opportunity.

“There is certainly still a need for ‘specialist knowledge’ in the more complex areas of lending, but it would be foolish for any broker to limit their market by just operating within one realm.

Richard Drake of Drake Business Funding said commercial brokers with an indepth knowledge in certain funding areas would provide an advantage.

“Innovation and diversification are the key drivers to being successful in this market.

“Simply the more markets in which you operate, the more opportunity you have to write new business.”

Nick added: “Like anything, if you limit your expertise, you are reducing your market exposure.

“If brokerages can specialise in a number of various debt and equity models for their clients, then they are providing a more well-rounded product.”

However, Nick did not believe that this was the end of specialist brokers.

“If anything, while times are currently a bit more challenging, specialist brokers should be thriving since the typical sources for funding are more limited.

“This gives brokers the opportunity to pick up new clients and introduce them to different funding opportunities.”

Jo also felt the role of the specialist finance broker was far from over.

“Borrowers go through the cycle and have different needs, for instance their first buy-to-let mortgage could be niche, then having one to four may be a mainstream buy-to-let, but as they

“These fields require a level of expertise to be realised.”

“Specialist commercial brokers having the right knowledge and skills, especially in the process for applying for finance, is vital to maximise the initial approach to the right lender(s) as this is often the key stage in any funding application, they would also be aware of current trends in their fields of expertise.”

Looking from a lender’s perspective, Zuhair said: “In some instances, particularly with complicated or unusual cases, it may be better for a specialist broker to assist.

“Having said that, we see a number of diversified brokers having specialists in a number of products.”

Kevin added: “Perhaps it isn’t important to have specialist brokers.

“There’s no reason why brokers can’t maintain a portfolio spanning a range of loan products from varying specialities without compromising the quality of their service.

“It ultimately means that products have to offer even more value to stand out from the crowd.

“I would argue that we’re not seeing the last of specialist brokers, but the first of the ‘super brokers’, intermediaries comfortable providing a service across a range of specialities to serve their clients better.”

LOWEST RATES & %%COMMISSION 2% AVAILABLE TO ALL ALL BROKERS

22

COVER STORY

Innovation and diversification are the key drivers to being successful in this market.

The series of bespoke events allow broker members to learn more about these areas of the market and hear from lenders operating in those sectors.

Some 132 brokers attended six roadshows held by Octopus Property across England last year, and the lender’s event schedule in 2018 saw similar numbers.

In August, Brightstar launched a specialist lending webinar programme.

The distributor’s online events have been designed to help brokers maximise the opportunity presented by the expanding specialist market.

Nick Holding-Parsons, asset finance adviser at Arc & Co, felt that there had definitely been a notable surge in brokers entering new sectors.

“Where your typical real estate debt adviser would only be focusing on development facilities or investment products, you now have them also providing equity packages.

“This means they can offer their clients more than one service.”

As to why brokers might look to diversify their offerings, Jo Breeden, managing director at Crystal Specialist Finance, said that clients had much more complex needs than just offering residential or BTL mortgages.

“With market conditions, changes in legislation and investors’ desire to maximise yields, we are seeing more portfolio buy-to-lets, bridging, semi-commercial and development applications.

“These sectors need to be part of a broker’s arsenal.”

Meanwhile, Kevin Vendel, head of sales at Spotcap, added: “It wasn’t long ago that our partners were purely commercial finance brokers.

“For example, we’re increasingly seeing mortgage brokers keen to

18 | NACFB Magazine

learn about business loans and curious about our product.”

grow, having more than four could then be more of a commercial buy-to-let.

Does this mean the end of the specialist finance broker?

Chris Oatway of LDNfinance felt the market had changed so much that there was now a requirement for all brokers across the board to upskill and diversify the areas of the market in which they operated.

“The customer may also then need a second charge to do refurbishment to their property, or a bridge for a chain-break opportunity.

“There is certainly still a need for ‘specialist knowledge’ in the more complex areas of lending, but it would be foolish for any broker to limit their market by just operating within one realm.

Richard Drake of Drake Business Funding said commercial brokers with an indepth knowledge in certain funding areas would provide an advantage.

“Innovation and diversification are the key drivers to being successful in this market.

“Simply the more markets in which you operate, the more opportunity you have to write new business.”

Nick added: “Like anything, if you limit your expertise, you are reducing your market exposure.

“If brokerages can specialise in a number of various debt and equity models for their clients, then they are providing a more well-rounded product.”

However, Nick did not believe that this was the end of specialist brokers.

“If anything, while times are currently a bit more challenging, specialist brokers should be thriving since the typical sources for funding are more limited.

“This gives brokers the opportunity to pick up new clients and introduce them to different funding opportunities.”

Jo also felt the role of the specialist finance broker was far from over.

“Borrowers go through the cycle and have different needs, for instance their first buy-to-let mortgage could be niche, then having one to four may be a mainstream buy-to-let, but as they

“These fields require a level of expertise to be realised.”

“Specialist commercial brokers having the right knowledge and skills, especially in the process for applying for finance, is vital to maximise the initial approach to the right lender(s) as this is often the key stage in any funding application, they would also be aware of current trends in their fields of expertise.”

Looking from a lender’s perspective, Zuhair said: “In some instances, particularly with complicated or unusual cases, it may be better for a specialist broker to assist.

“Having said that, we see a number of diversified brokers having specialists in a number of products.”

Kevin added: “Perhaps it isn’t important to have specialist brokers.

“There’s no reason why brokers can’t maintain a portfolio spanning a range of loan products from varying specialities without compromising the quality of their service.

“It ultimately means that products have to offer even more value to stand out from the crowd.

“I would argue that we’re not seeing the last of specialist brokers, but the first of the ‘super brokers’, intermediaries comfortable providing a service across a range of specialities to serve their clients better.”

LOWEST RATES & %%COMMISSION 2% AVAILABLE TO ALL ALL BROKERS

22

Top | story

Our bridging loan helped The Clarks to downsize before they’d even sold.

The upside of that, we helped them do it.

Our pick of the latest Patron news

Lending for the new normal.

FCA confirms greater access for SMEs to the FOS Theo Osborn Reporter Bridging & Commercial

T

he FCA has confirmed plans to extend access to the Financial Ombudsman Service (FOS) to more SMEs. The service will now be available to SMEs which have an annual turnover below £6.5m and fewer than 50 employees or an annual balance sheet below £5m.

This should account for around 210,000 additional SMEs, which will now be able to refer unresolved complaints to the ombudsman service.

Respondents to the FCA’s January 2018 consultation strongly supported the extension of the ombudsman service to larger SMEs, charities and trusts, and a new category of personal guarantors.

The changes will allow a wider number of SMEs to access the service, so they can seek redress.

The criteria for access to the service have been amended so that SMEs must only meet the turnover test and one of either the headcount or balance sheet total tests, not all three tests as previously proposed.

The FCA made this change in response to feedback that applying all three tests would unfairly exclude certain types of SME, for example those with relatively low turnover but 50 or more employees.

The FCA has published near-final rules, so the ombudsman service can start taking practical steps towards putting the extension of its remit in place, including starting recruitment of additional staff with the skills and experience required.

The FCA intends to publish final rules later this year, following its normal scrutiny of the ombudsman service’s draft business plan and budget.

The regulator expects the final rules on the SME extension to come into force on 1 April 2019.

Andrew Bailey, chief executive at the FCA, said: “The changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses.

“Before this their only option was potentially a costly legal one through the courts.

“The changes are an important extension of the ombudsman service’s role and remit.

“We will work closely with them to ensure that they are ready, so that SMEs are able to benefit from the new rules as soon as they come into force.”

Together with the near-final rules, the FCA has published a consultation on raising the maximum amount of compensation the ombudsman service can require financial services firms to pay out from £150,000 to £350,000.

At Together our experience spans over decades and tens of thousands of bridging loans. So no matter the circumstances our flexible approach to lending means that it’s perfectly normal to us.

Find out how we do things differently at togethermoney.com/bridge or call 0333 455 3900 For professional intermediary use only.

‘The Clarks’ has been used for illustrative purposes only.

20 | NACFB Magazine

Top | story

Our bridging loan helped The Clarks to downsize before they’d even sold.

The upside of that, we helped them do it.

Our pick of the latest Patron news

Lending for the new normal.

FCA confirms greater access for SMEs to the FOS Theo Osborn Reporter Bridging & Commercial

T

he FCA has confirmed plans to extend access to the Financial Ombudsman Service (FOS) to more SMEs. The service will now be available to SMEs which have an annual turnover below £6.5m and fewer than 50 employees or an annual balance sheet below £5m.

This should account for around 210,000 additional SMEs, which will now be able to refer unresolved complaints to the ombudsman service.

Respondents to the FCA’s January 2018 consultation strongly supported the extension of the ombudsman service to larger SMEs, charities and trusts, and a new category of personal guarantors.

The changes will allow a wider number of SMEs to access the service, so they can seek redress.

The criteria for access to the service have been amended so that SMEs must only meet the turnover test and one of either the headcount or balance sheet total tests, not all three tests as previously proposed.

The FCA made this change in response to feedback that applying all three tests would unfairly exclude certain types of SME, for example those with relatively low turnover but 50 or more employees.

The FCA has published near-final rules, so the ombudsman service can start taking practical steps towards putting the extension of its remit in place, including starting recruitment of additional staff with the skills and experience required.

The FCA intends to publish final rules later this year, following its normal scrutiny of the ombudsman service’s draft business plan and budget.

The regulator expects the final rules on the SME extension to come into force on 1 April 2019.

Andrew Bailey, chief executive at the FCA, said: “The changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses.

“Before this their only option was potentially a costly legal one through the courts.

“The changes are an important extension of the ombudsman service’s role and remit.

“We will work closely with them to ensure that they are ready, so that SMEs are able to benefit from the new rules as soon as they come into force.”

Together with the near-final rules, the FCA has published a consultation on raising the maximum amount of compensation the ombudsman service can require financial services firms to pay out from £150,000 to £350,000.

At Together our experience spans over decades and tens of thousands of bridging loans. So no matter the circumstances our flexible approach to lending means that it’s perfectly normal to us.

Find out how we do things differently at togethermoney.com/bridge or call 0333 455 3900 For professional intermediary use only.

‘The Clarks’ has been used for illustrative purposes only.

20 | NACFB Magazine

Introducing New and refreshed offerings for NACFB brokers on behalf of Patrons and Members

Assetz to launch property crowdfunding platform in Q4 New property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

Tom Belger Senior reporter Development Finance Today

N

ew property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

The platform – part of the Assetz group of businesses, which includes Assetz Capital – allows users to invest in a range of properties, from student accommodation, privately rented houses and apartments to affordable housing.

Investors can choose to invest in properties to be rented out – at market rent or affordably – or in properties to be built and sold on according to market demand.

new housing on to the market for rent or for sale as appropriate to local market conditions and demand.

everyone, but still aiming to deliver a healthy income for that activity, so that everyone benefits.

“We will also act as the gateway for existing tenanted, landlordheld housing to be acquired, improved, rented and released for sale to homeowners over time, again as appropriate to local market conditions.”

“Combined, these two businesses provide a model to get housebuilding moving faster in the UK – while also delivering for our investors.

Assetz Exchange is currently fundraising for launch with a Seedrs equity investment crowdfunding campaign with a pre-registration page.

Investments can be made privately or through an Isa with all properties being fully managed.

Stuart Law, founder of the Assetz group of companies (pictured above), said it has created Assetz Exchange to address a number of issues with the housing market.

“They will also be able to choose to not only fund normal market price properties, but also properties with affordable rents and affordable sale prices.

“We’ll direct investors’ capital to projects and investments that bring

“We’re making entrepreneurial philanthropy accessible to

22 | NACFB Magazine

No nonsense, no red tape We’ve got commercial mortgages covered. We’re breaking through barriers to give your customers a decision in principle within 24 hours.

Loans from as low as 5.9%.

Welcome to fast,

It is also accepting pre-registrations from potential investors on the Assetz Exchange platform.

“Investors can choose to invest in a housing development to be held for the long term, or they could carry out shorter-term investments by delivering new housing into the market by building housing schemes for rent or onward sale to homebuyers,” added Stuart.

An aftermarket will provide an optional exit if there is demand.

“We are creating a financial hub to help provide more solutions to help solve the housing crisis here in the UK.”

Commercial mortgages without the hassle

We will act as the gateway for existing tenanted, landlordheld housing to be acquired, improved, rented and released for sale to homeowners

Find out more at assetzcapital.co.uk/borrow or call 0800 470 0432 Assetz SME Capital Ltd is a company registered in England and Wales with company number 08007287. Assetz SME Capital Ltd is authorised and regulated by the Financial Conduct Authority (Reg No: 724996). ‘ Assetz Capital’ is a trading name of Assetz SME Capital Ltd.

Introducing New and refreshed offerings for NACFB brokers on behalf of Patrons and Members

Assetz to launch property crowdfunding platform in Q4 New property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

Tom Belger Senior reporter Development Finance Today

N

ew property crowdfunding platform Assetz Exchange is set to launch in Q4 2018.

The platform – part of the Assetz group of businesses, which includes Assetz Capital – allows users to invest in a range of properties, from student accommodation, privately rented houses and apartments to affordable housing.

Investors can choose to invest in properties to be rented out – at market rent or affordably – or in properties to be built and sold on according to market demand.

new housing on to the market for rent or for sale as appropriate to local market conditions and demand.

everyone, but still aiming to deliver a healthy income for that activity, so that everyone benefits.

“We will also act as the gateway for existing tenanted, landlordheld housing to be acquired, improved, rented and released for sale to homeowners over time, again as appropriate to local market conditions.”

“Combined, these two businesses provide a model to get housebuilding moving faster in the UK – while also delivering for our investors.

Assetz Exchange is currently fundraising for launch with a Seedrs equity investment crowdfunding campaign with a pre-registration page.

Investments can be made privately or through an Isa with all properties being fully managed.

Stuart Law, founder of the Assetz group of companies (pictured above), said it has created Assetz Exchange to address a number of issues with the housing market.

“They will also be able to choose to not only fund normal market price properties, but also properties with affordable rents and affordable sale prices.

“We’ll direct investors’ capital to projects and investments that bring

“We’re making entrepreneurial philanthropy accessible to

22 | NACFB Magazine

No nonsense, no red tape We’ve got commercial mortgages covered. We’re breaking through barriers to give your customers a decision in principle within 24 hours.

Loans from as low as 5.9%.

Welcome to fast,

It is also accepting pre-registrations from potential investors on the Assetz Exchange platform.

“Investors can choose to invest in a housing development to be held for the long term, or they could carry out shorter-term investments by delivering new housing into the market by building housing schemes for rent or onward sale to homebuyers,” added Stuart.

An aftermarket will provide an optional exit if there is demand.

“We are creating a financial hub to help provide more solutions to help solve the housing crisis here in the UK.”

Commercial mortgages without the hassle

We will act as the gateway for existing tenanted, landlordheld housing to be acquired, improved, rented and released for sale to homeowners

Find out more at assetzcapital.co.uk/borrow or call 0800 470 0432 Assetz SME Capital Ltd is a company registered in England and Wales with company number 08007287. Assetz SME Capital Ltd is authorised and regulated by the Financial Conduct Authority (Reg No: 724996). ‘ Assetz Capital’ is a trading name of Assetz SME Capital Ltd.

Case Studies

Creative property finance funds business acquisition

There have been a number of changes for businesses in 2018. From economic pressures and ongoing Brexit negotiations, to rising interest rates- all of which are creating uncertainty for the SME community in one way or another.

Gareth Lewis Commercial director mtf

H

owever, even amongst the uncertainty, growth and productivity are key priorities for SME owners. According to research from Hitachi Capital, two thirds of SME owners (67 per cent) are working on growth plans in the next three months.

At mtf, we have definitely seen a notable rise in the proportion of small business owners seeking funding for growth. As such, they are implementing innovations in their organisation by purchasing more stock, upgrading equipment, or even looking to expand into new markets to power that growth.

As an example, mtf recently completed a loan for a client who had been presented with a fantastic opportunity to expand his business.

The client owned a successful textile manufacturing company and as part of his growth strategy, was looking for funds to help him acquire a similar company. As part of the acquisition the client was able to take over an existing contract for materials and products from Southeast Asia, including a shipment that had already been approved and prepared for the new company.

By taking advantage of raising monies quickly against the client’s own home they were able to agree competitive terms with the existing business owners that made the project exceptionally cost effective. Not only this, but it also gave our clients the flexibility to restructure both businesses, which would ultimately improve productivity and profitability.

On receipt of the enquiry, we were able to give an immediate decision, and issued the offer in principle that day and as we were faced with roughly 2 weeks to deliver the funds, we immediately instructed the valuation at the same time as going to offer.

In just 13 days, mtf was able to secure a second charge £275,000 loan on the client’s property, at 60% LTV, based on the current open market value.

Interest was retained at 0.85% over 12 months, with no exit fees or early repayment charges. No personal guarantees were required.

Our loan meant the client was able to complete the acquisition by the specified completion date and capitalise on a fantastic investment to his business. Within 9 months the client was able to show a trading pattern and increased income that allowed them to raise monies to exit our loan.

SMEs contribute more than £200bn a year to the UK economy. Given the importance of SMEs together with the uncertain landscape facing them, a need for fast, reliable and transparent liquidity to help them seize opportunities is as critical as ever. mtf’s bridging loan products are designed to meet the many diverse needs of business owners. We do not require evidence of trading history, accounts or proof of income, and do not require personal guarantees. This allows us to take a practical, common sense approach to lending.

However, the sellers had a specific completion date which meant the client needed to move quickly to take advantage of the opportunity. He had attempted to borrow against his main residence, valued at £950,000, which had an existing first charge mortgage of £295,000. However, his existing mortgage lender was unable to provide additional funding against the property in the time-frame required.

Due to time sensitivity, the client’s broker contacted us straight away.

24 | NACFB Magazine

NACFB Magazine | 25

Case Studies

Creative property finance funds business acquisition

There have been a number of changes for businesses in 2018. From economic pressures and ongoing Brexit negotiations, to rising interest rates- all of which are creating uncertainty for the SME community in one way or another.

Gareth Lewis Commercial director mtf

H

owever, even amongst the uncertainty, growth and productivity are key priorities for SME owners. According to research from Hitachi Capital, two thirds of SME owners (67 per cent) are working on growth plans in the next three months.

At mtf, we have definitely seen a notable rise in the proportion of small business owners seeking funding for growth. As such, they are implementing innovations in their organisation by purchasing more stock, upgrading equipment, or even looking to expand into new markets to power that growth.

As an example, mtf recently completed a loan for a client who had been presented with a fantastic opportunity to expand his business.

The client owned a successful textile manufacturing company and as part of his growth strategy, was looking for funds to help him acquire a similar company. As part of the acquisition the client was able to take over an existing contract for materials and products from Southeast Asia, including a shipment that had already been approved and prepared for the new company.

By taking advantage of raising monies quickly against the client’s own home they were able to agree competitive terms with the existing business owners that made the project exceptionally cost effective. Not only this, but it also gave our clients the flexibility to restructure both businesses, which would ultimately improve productivity and profitability.

On receipt of the enquiry, we were able to give an immediate decision, and issued the offer in principle that day and as we were faced with roughly 2 weeks to deliver the funds, we immediately instructed the valuation at the same time as going to offer.

In just 13 days, mtf was able to secure a second charge £275,000 loan on the client’s property, at 60% LTV, based on the current open market value.

Interest was retained at 0.85% over 12 months, with no exit fees or early repayment charges. No personal guarantees were required.

Our loan meant the client was able to complete the acquisition by the specified completion date and capitalise on a fantastic investment to his business. Within 9 months the client was able to show a trading pattern and increased income that allowed them to raise monies to exit our loan.

SMEs contribute more than £200bn a year to the UK economy. Given the importance of SMEs together with the uncertain landscape facing them, a need for fast, reliable and transparent liquidity to help them seize opportunities is as critical as ever. mtf’s bridging loan products are designed to meet the many diverse needs of business owners. We do not require evidence of trading history, accounts or proof of income, and do not require personal guarantees. This allows us to take a practical, common sense approach to lending.

However, the sellers had a specific completion date which meant the client needed to move quickly to take advantage of the opportunity. He had attempted to borrow against his main residence, valued at £950,000, which had an existing first charge mortgage of £295,000. However, his existing mortgage lender was unable to provide additional funding against the property in the time-frame required.

Due to time sensitivity, the client’s broker contacted us straight away.

24 | NACFB Magazine

NACFB Magazine | 25

Fast, flexible and bespoke bridging loans expertly tailored for each individual deal OFFERING FREE VALUATIONS ON

MFS

®

RESIDENTIAL BRIDGING LOANS

Experts in fast, flexible and bespoke bridging loans MFS is a specialist in short-term bridging finance. We pride ourselves on transparency and speed, delivering fast loans catered to the requirements of the individual case.

Loan amounts: £200,000 to £10 million Rates: from 0.65% LTV: up to 80% Generous packages for intermediaries

+44(0)20 7060 1234 info@mfsuk.com www.mfsuk.com

Fast, flexible and bespoke bridging loans expertly tailored for each individual deal OFFERING FREE VALUATIONS ON

MFS

®

RESIDENTIAL BRIDGING LOANS

Experts in fast, flexible and bespoke bridging loans MFS is a specialist in short-term bridging finance. We pride ourselves on transparency and speed, delivering fast loans catered to the requirements of the individual case.

Loan amounts: £200,000 to £10 million Rates: from 0.65% LTV: up to 80% Generous packages for intermediaries

+44(0)20 7060 1234 info@mfsuk.com www.mfsuk.com

CASE STUDIES

The top-up that kept the broker and client coming back for more Kevin Vendel Head of sales Spotcap UK

Business finance is changing at a rate that surprises even the most familiar players in the industry. In the lifespan of a loan term, a client’s needs can change and a lender’s offering may adapt to match.

Partnering with Goodman Corporate Finance The greatest example of this has to be a recent case with Goodman Corporate Finance. A long-term partner, we provided its client with a fully unsecured loan on two separate occasions. While the results were consistently positive, the outcome was never entirely the same.

Established in 2006, Nottinghambased Goodman Corporate Finance has always been great communicators: responsive, quick and clear in describing its clients’ funding needs.

In this case, a manufacturer in the technology industry based in the North West looking for £150,000.

After an initial discussion with one of our relationship managers, sales director Stefan Radymski submitted an application through our portal on the client’s behalf. A review from our team highlighted there were some documents needed to make a thorough credit decision.

After a quick phone call with Stefan, the necessary documents were uploaded promptly to our portal.

Our underwriters approved the case based on the company’s wellmanaged bank account, strong credit bureau score and year-onyear VAT increases. The client walked away with a fully unsecured £150,000 glad that they didn’t need to provide a PG for the loan.

28 | NACFB Magazine

Coming back for more Six repayments later and the manufacturer had contacted Goodman Corporate Finance and Stefan again to look for further funding.

In order to proceed, we needed updated documents from the client.

These were uploaded swiftly by Stefan and our underwriters could get to work. Being in business for 11 years with a positive cash flow and stable year-on-year sales meant we were able to offer a £275,000 top-up for 24 months without a personal guarantee.

Commenting on the deal, Stefan said: “Spotcap has always thought outside the box, its constantly evolving product allowed us to help a client on two occasions with more options and speed than they expected. It was a smooth process for all involved.”

Helping Stefan to help his client was a great example of how pushing for progress can bring genuine benefits for the broker as well as its client. Our £350,000 loan limit and 24-month duration without the need for a PG offers solutions that were previously unavailable. Who knows what changes will come in the space of another 24-month loan term?

PROUD MEMBER OF THE

The AWARDS 2018

SHORTLISTED

Helping Fund UK Business

CASE STUDIES

The top-up that kept the broker and client coming back for more Kevin Vendel Head of sales Spotcap UK

Business finance is changing at a rate that surprises even the most familiar players in the industry. In the lifespan of a loan term, a client’s needs can change and a lender’s offering may adapt to match.

Partnering with Goodman Corporate Finance The greatest example of this has to be a recent case with Goodman Corporate Finance. A long-term partner, we provided its client with a fully unsecured loan on two separate occasions. While the results were consistently positive, the outcome was never entirely the same.

Established in 2006, Nottinghambased Goodman Corporate Finance has always been great communicators: responsive, quick and clear in describing its clients’ funding needs.

In this case, a manufacturer in the technology industry based in the North West looking for £150,000.

After an initial discussion with one of our relationship managers, sales director Stefan Radymski submitted an application through our portal on the client’s behalf. A review from our team highlighted there were some documents needed to make a thorough credit decision.

After a quick phone call with Stefan, the necessary documents were uploaded promptly to our portal.

Our underwriters approved the case based on the company’s wellmanaged bank account, strong credit bureau score and year-onyear VAT increases. The client walked away with a fully unsecured £150,000 glad that they didn’t need to provide a PG for the loan.

28 | NACFB Magazine

Coming back for more Six repayments later and the manufacturer had contacted Goodman Corporate Finance and Stefan again to look for further funding.

In order to proceed, we needed updated documents from the client.

These were uploaded swiftly by Stefan and our underwriters could get to work. Being in business for 11 years with a positive cash flow and stable year-on-year sales meant we were able to offer a £275,000 top-up for 24 months without a personal guarantee.

Commenting on the deal, Stefan said: “Spotcap has always thought outside the box, its constantly evolving product allowed us to help a client on two occasions with more options and speed than they expected. It was a smooth process for all involved.”

Helping Stefan to help his client was a great example of how pushing for progress can bring genuine benefits for the broker as well as its client. Our £350,000 loan limit and 24-month duration without the need for a PG offers solutions that were previously unavailable. Who knows what changes will come in the space of another 24-month loan term?

PROUD MEMBER OF THE

The AWARDS 2018

SHORTLISTED

Helping Fund UK Business

Patron | profile

Tuscan Capital Bridging has never been so popular.

So, what makes a new lender think it can offer NACFB members something they don’t already have? Colin Sanders of Tuscan Capital believes he has the answers.

W

hy “Tuscan Capital”?

That was pretty much the first thing everybody asked me when we launched to market in February 2018.

Good question. A name can reveal more about a business than one might think, and my reasons for choosing this one were as much personal as practical. My wife and I adore Italy, in general, and Tuscany in particular. I also wanted to avoid one of those made-up names so loved by fancy design agencies.

Importantly, the name and its domains were available. Job done.

So, who are we? First and foremost, we’re a bridging lender that provides short-term funding to the unregulated property sector in England and Wales. Our product palette comprises four distinct lending streams: bridging mixed-use/semi-commercial

30 | NACFB Magazine

refurbishment auction funding Our funding packages begin at £150,000 and are available up to £3m (and more by negotiation). Monthly rates start at 0.75% and we offer LTVs up to 75% (of open market value).

Standing out from the crowd At this point, you may be thinking: here’s another new bridging provider offering more of the same in a very well-supplied sector.

What makes them different?

This was perhaps my biggest early challenge: how to make ourselves stand out. The answer for me lay not in cut-price rates or an imprudent approach to risk – we actually want to be around for a while – but in an ethos that puts service front and centre.

I’ve been in bridging long enough to know (this isn’t my debut) that a one-size-fits-all mentality just

doesn’t cut it. Brokers need, and deserve, flexibility, and that’s what we offer. Our approach to risk is founded on an ‘inside and outside the box’ mentality. We offer both conventional and unconventional solutions and work hard to avoid a too-rigid product offering.

We provide our intermediaries with direct access to senior mandated decision makers and eschew bureaucratic credit committees.

Too many lenders in my view have become too institutionalised.

While this has brought benefits, I also believe it has helped to dilute that vital entrepreneurial edge that makes bridging so compelling.

We do not seek to compete head on with larger challenger lenders, but I am determined that we will always offer our brokers and their clients a bespoke, consistent and reliably decisive service. This is unashamedly designed with one purpose in mind: repeat custom.

Bridging for brokers Intermediaries are our focus. You are our primary and principal route to market, a fact we never forget. Since launching, we have benefited from historical relationships with a number of brokers and packagers whom we know well, mainly in London and the South East. Looking ahead, we want to make much deeper inroads into the Midlands and North of England, both key growth target regions for us.

Working with us means partnering with a lender who understands brokers and short-term lending. While a new lender in our own right, the team at Tuscan Capital collectively boasts over 150 years of experience in lending – and there aren’t a huge number of us. Importantly, we’re securely funded through a mix of capital injected by the directors – myself included – and funding from a specialist boutique equity house.

To intermediaries who haven’t worked with us before, I would say

that I know you’re spoilt for choice when it comes to bridging and that shopping around is essential to get the best deal for your client. With us, you are unlikely to find the cheapest headline lender. But, if you value qualities such as experience, reliability, integrity and a proven appetite to lend, then please get in touch.

Colin Sanders CEO Tuscan Capital

NACFB Magazine | 31

Patron | profile

Tuscan Capital Bridging has never been so popular.

So, what makes a new lender think it can offer NACFB members something they don’t already have? Colin Sanders of Tuscan Capital believes he has the answers.

W

hy “Tuscan Capital”?

That was pretty much the first thing everybody asked me when we launched to market in February 2018.

Good question. A name can reveal more about a business than one might think, and my reasons for choosing this one were as much personal as practical. My wife and I adore Italy, in general, and Tuscany in particular. I also wanted to avoid one of those made-up names so loved by fancy design agencies.

Importantly, the name and its domains were available. Job done.

So, who are we? First and foremost, we’re a bridging lender that provides short-term funding to the unregulated property sector in England and Wales. Our product palette comprises four distinct lending streams: bridging mixed-use/semi-commercial

30 | NACFB Magazine

refurbishment auction funding Our funding packages begin at £150,000 and are available up to £3m (and more by negotiation). Monthly rates start at 0.75% and we offer LTVs up to 75% (of open market value).

Standing out from the crowd At this point, you may be thinking: here’s another new bridging provider offering more of the same in a very well-supplied sector.

What makes them different?

This was perhaps my biggest early challenge: how to make ourselves stand out. The answer for me lay not in cut-price rates or an imprudent approach to risk – we actually want to be around for a while – but in an ethos that puts service front and centre.

I’ve been in bridging long enough to know (this isn’t my debut) that a one-size-fits-all mentality just

doesn’t cut it. Brokers need, and deserve, flexibility, and that’s what we offer. Our approach to risk is founded on an ‘inside and outside the box’ mentality. We offer both conventional and unconventional solutions and work hard to avoid a too-rigid product offering.

We provide our intermediaries with direct access to senior mandated decision makers and eschew bureaucratic credit committees.

Too many lenders in my view have become too institutionalised.

While this has brought benefits, I also believe it has helped to dilute that vital entrepreneurial edge that makes bridging so compelling.

We do not seek to compete head on with larger challenger lenders, but I am determined that we will always offer our brokers and their clients a bespoke, consistent and reliably decisive service. This is unashamedly designed with one purpose in mind: repeat custom.

Bridging for brokers Intermediaries are our focus. You are our primary and principal route to market, a fact we never forget. Since launching, we have benefited from historical relationships with a number of brokers and packagers whom we know well, mainly in London and the South East. Looking ahead, we want to make much deeper inroads into the Midlands and North of England, both key growth target regions for us.

Working with us means partnering with a lender who understands brokers and short-term lending. While a new lender in our own right, the team at Tuscan Capital collectively boasts over 150 years of experience in lending – and there aren’t a huge number of us. Importantly, we’re securely funded through a mix of capital injected by the directors – myself included – and funding from a specialist boutique equity house.

To intermediaries who haven’t worked with us before, I would say

that I know you’re spoilt for choice when it comes to bridging and that shopping around is essential to get the best deal for your client. With us, you are unlikely to find the cheapest headline lender. But, if you value qualities such as experience, reliability, integrity and a proven appetite to lend, then please get in touch.

Colin Sanders CEO Tuscan Capital

NACFB Magazine | 31

Ask | the expert

We are the people for Development Finance

Your questions answered by the most knowledgeable industry insiders

Jonathan Bower, Solicitor in the Real Estate Finance team at Seddons, on common questions lawyers get asked.

Q

Why do lender’s solicitors require borrowers to take Independent Legal Advice (ILA)?

A

Simply put, to stop the borrower challenging the loan. When a borrower takes out a loan, having a document which confirms that the borrower was independently advised, stops the borrower at a later stage complaining they were not aware of what they were entering into.

Q A

When is ILA required?

As a general rule, on any loan. What tends to hold up transactions is where parties and sometimes even lawyers fail to understand the need for ILA for parties who are not a party to the loan. For example, where a third party could claim occupation of the security property or claim a right to the proceeds of sale of the property.

Another common example is if there is the borrower’s spouse in occupation of the property, under no formal agreement, they might have a right to occupy under the Matrimonial Homes Act 1983. If no waiver is signed, the occupiers may have an overriding interest over any mortgagee.

Q A

What’s the point of a Legal Opinion?

When lending to a borrower who is an overseas company, the lender must be able to verify certain information on the borrower company. They do this by way of a legal opinion which confirms

32 | NACFB Magazine

amongst other things: That the company is registered, has the power to borrow, is not insolvent and whether the mortgage will be binding on the company. Whilst it may seem frustrating and often costly for the lender’s solicitors to request legal opinions, without one, a lender would not be able to confirm that the borrower can enter into the transaction. In a sense, a legal opinion replaces enquiries that the lender can make of the borrower at Companies House.

Q A

Why is an undertaking to provide a DS1 required?

This is a scenario that pops up on files time and time again. The property is already subject to a charge registered to a non-cml registered lender. Without an undertaking to send a signed DS1 from lawyers acting for that lender, the incoming lender will not be able to guarantee that their charge will be registered if the previous charge is not removed. Often, the outgoing lender will undertake themselves to send the DS1 on redemption of their charge. However, an undertaking not given by a solicitor does not carry the same weight as one given by a solicitor.

Q A

Common situations where indemnity insurance can be considered?

Indemnity insurance can be used in a number of situations to swiftly move matters along. The most common times that these are used in lending transactions are when property searches have not yet been undertaken. No search indemnity insurance will often be used to compensate

the lender financially, if the search would have revealed an adverse entry that affects the value or saleability of the security.

Lenders often request that property searches are dated within 3 months prior to completion but where this is not possible, Search Validation insurance may be used in a similar manner to a No Search Indemnity Insurance policy. Another example is Access Indemnity Insurance, to deal with situations where a property appears to have no legal right of access (i.e. does not abut a public highway). It is important to note that whilst indemnity insurance policies may compensate the lender/owner financially, the will not however remove the risk.

C

M

insufficient bleed

Y

CM

MY

CY

CMY

K

Q A

Do indemnity policies always work?

I recently received a mug from one insurance provider which had written on it the words, “Fe Fi Fo Fum, we have something for everyone”. Well, yes and no. Indemnity policies are often costly and contain numerous exclusions which can make appropriate cover difficult to come by.

A common example which is encountered is where a property is subject to various restrictive covenants. The lender’s solicitors are made aware that the beneficiary of the covenant has contacted the owner regarding a breach of covenant. The owner then asks if a restrictive covenant indemnity insurance policy can be procured. In such a scenario, as the insured is aware of the breach, a policy would not be available.

Let’s talk...

0208 349 5190 @ABC_Bridging sayhello@alternativebridging.co.uk alternativebridging.co.uk

Ask | the expert

We are the people for Development Finance

Your questions answered by the most knowledgeable industry insiders

Jonathan Bower, Solicitor in the Real Estate Finance team at Seddons, on common questions lawyers get asked.

Q

Why do lender’s solicitors require borrowers to take Independent Legal Advice (ILA)?

A

Simply put, to stop the borrower challenging the loan. When a borrower takes out a loan, having a document which confirms that the borrower was independently advised, stops the borrower at a later stage complaining they were not aware of what they were entering into.

Q A

When is ILA required?

As a general rule, on any loan. What tends to hold up transactions is where parties and sometimes even lawyers fail to understand the need for ILA for parties who are not a party to the loan. For example, where a third party could claim occupation of the security property or claim a right to the proceeds of sale of the property.

Another common example is if there is the borrower’s spouse in occupation of the property, under no formal agreement, they might have a right to occupy under the Matrimonial Homes Act 1983. If no waiver is signed, the occupiers may have an overriding interest over any mortgagee.

Q A

What’s the point of a Legal Opinion?

When lending to a borrower who is an overseas company, the lender must be able to verify certain information on the borrower company. They do this by way of a legal opinion which confirms

32 | NACFB Magazine

amongst other things: That the company is registered, has the power to borrow, is not insolvent and whether the mortgage will be binding on the company. Whilst it may seem frustrating and often costly for the lender’s solicitors to request legal opinions, without one, a lender would not be able to confirm that the borrower can enter into the transaction. In a sense, a legal opinion replaces enquiries that the lender can make of the borrower at Companies House.

Q A

Why is an undertaking to provide a DS1 required?

This is a scenario that pops up on files time and time again. The property is already subject to a charge registered to a non-cml registered lender. Without an undertaking to send a signed DS1 from lawyers acting for that lender, the incoming lender will not be able to guarantee that their charge will be registered if the previous charge is not removed. Often, the outgoing lender will undertake themselves to send the DS1 on redemption of their charge. However, an undertaking not given by a solicitor does not carry the same weight as one given by a solicitor.

Q A

Common situations where indemnity insurance can be considered?

Indemnity insurance can be used in a number of situations to swiftly move matters along. The most common times that these are used in lending transactions are when property searches have not yet been undertaken. No search indemnity insurance will often be used to compensate

the lender financially, if the search would have revealed an adverse entry that affects the value or saleability of the security.

Lenders often request that property searches are dated within 3 months prior to completion but where this is not possible, Search Validation insurance may be used in a similar manner to a No Search Indemnity Insurance policy. Another example is Access Indemnity Insurance, to deal with situations where a property appears to have no legal right of access (i.e. does not abut a public highway). It is important to note that whilst indemnity insurance policies may compensate the lender/owner financially, the will not however remove the risk.

C

M

insufficient bleed

Y

CM

MY

CY

CMY

K

Q A

Do indemnity policies always work?

I recently received a mug from one insurance provider which had written on it the words, “Fe Fi Fo Fum, we have something for everyone”. Well, yes and no. Indemnity policies are often costly and contain numerous exclusions which can make appropriate cover difficult to come by.

A common example which is encountered is where a property is subject to various restrictive covenants. The lender’s solicitors are made aware that the beneficiary of the covenant has contacted the owner regarding a breach of covenant. The owner then asks if a restrictive covenant indemnity insurance policy can be procured. In such a scenario, as the insured is aware of the breach, a policy would not be available.

Let’s talk...

0208 349 5190 @ABC_Bridging sayhello@alternativebridging.co.uk alternativebridging.co.uk

Special | features An up-to-date insight into the industry

Quality over quantity – lets go local Paul Turton Head of sales – development finance United Trust Bank It’s a fact that in the late 1980s small builders were responsible for four in 10 new homes compared to just 12% today.

It’s a fact that between 2007 and 2009, one-third of small companies ceased building homes. And it’s a fact that returning to the number of housebuilders operational in 2007 could help boost housing supply by 25,000 homes a year.

However, it’s not just the facts that are important. Small builders typically live in the communities in which they build which means they: Have an intimate knowledge of the streets and districts where they operate, enabling them to size and plan projects in an efficient and cost-effective manner.

Have supply chains that will include local materials and labour, contributing to the local economy and affluence of an area.

Are ever aware of the concerns and aspirations of their community and the push and pull of the local politics.

This enables them to predict the hurdles they will face during the planning and building process.

Know that they are only as good as their last project. Their brand, their reputation and their balance sheet are on the line each time a new scheme comes to market. That is why local developers know that they need to selfimpose the highest standards in design, materials and build quality through the planning, design and building process.

It is this in-depth knowledge of the DNA of a local market which allows SME developers to mobilise and deliver sites that larger and less connected operators would deem

34 | NACFB Magazine

too small or too difficult to build. Small is beautiful, whether it’s the sites that are built upon or the builder who delivers them and we cannot afford to overlook small- and medium-sized housebuilders and developers operating across England and Wales when considering how to tackle housing shortages for local people.

But what can be done to stimulate growth in the number of small builders operating in our towns and cities? The fact remains that a one-size-fits-all planning process has created a blind spot for small builders and the sites they wish to develop. This is reflected in our planning system which is over engineered. There is too much conditionality where the rules do not reflect the reality of delivering smaller sites. Furthermore, associated 106 agreements are overbearing in their demands, whether social or financial, and ignore the indirect economic benefits of infill and brownfield sites. Equally, local plans largely ignore smaller sites on both public and private property and only come forward on a case-by-case basis, adding to the uncertainty of what can be delivered where and at what cost.

Planners and developers need to build proper commercial relationships at a local level. There are plenty of platforms on which this can be done, whether it’s through bespoke forums or through local clubs, associations and chambers. Unfortunately, local officials can often fear that developing productive relationships with housebuilders might be viewed with suspicion, and fear that their professional integrity might be called into question. This must be replaced with bravery and a determination to create trust and a desire to conduct business in an open and honest manner through regular, face-to-face interaction. Collaborative rather than combative is the way forward.

Through these relationships, planners will find that they have a local private sector community which can identify small sites that can be nominated for the local plan.

More of the right kind of homes in the

right places is a win for the planners, the housebuilders and the local community.

All developers face a mountain of potential pre-commencement conditions when trying to gain permission to build. These should be restricted to a handful of essential pre-commencement conditions with the balance marked pre-occupation so as not to drain the housebuilder of their resources before even starting the groundworks. Reasonable and sensible conditions are useful and protect future homeowners and the existing community, but to take just one example, the preapproval of bat boxes is not helpful to anyone, least of all the bats themselves.

It also appears to me that saddling smaller developers with the responsibility of providing affordable housing is to hamstring them at a critical stage in their evolution, when they will be investing their profits in the growth of their businesses.

Economies of scale should be properly reflected by lifting the threshold at which social housing considerations come into play. Placing these requirements on the larger and more accessible sites targeted by national housebuilders would be much fairer. It is much easier to blend the lower margins achieved on social housing units on a 200-unit site than it is on a 12-unit site.

Equally, any financial contributions liable under the community infrastructure levy should be allowed to be settled on a ‘build now, pay later’ basis when sales income can be used rather than having to pay it before a project has started and the cash to get a project off the ground may already be tight.

SME housebuilders could play a more significant role in delivering the UK’s new housing needs. Removing obstacles in the planning system, reducing red tape and recognising that smaller housebuilders complement national housebuilders rather than compete against them, would be big steps towards reinvigorating the SME sector.

SPEED MEETS KNOWLEDGE 020 7655 3388

Fast property finance At Commercial Acceptances speed alone is not enough. Speak straight to decision makers: a quick and personal service. No arrangement fees, no extension fees and no end fees. Interest charged from only 0.75% per calendar month.

Your property may be repossessed if you do not keep up on your mortgage repayments or any other debt secured on it. A rate from 0.75% will be chargeable on the amount borrowed every calendar month. However rates are subject to change and will increase or decrease in line with movements in 3m LIBOR (The London Inter-Bank Offered Rate For Three Month Sterling Deposits). Rates will be adjusted on each calendar month anniversary of the facility. The overall cost for comparison is 10.6% APR.

Special | features An up-to-date insight into the industry

Quality over quantity – lets go local Paul Turton Head of sales – development finance United Trust Bank It’s a fact that in the late 1980s small builders were responsible for four in 10 new homes compared to just 12% today.

It’s a fact that between 2007 and 2009, one-third of small companies ceased building homes. And it’s a fact that returning to the number of housebuilders operational in 2007 could help boost housing supply by 25,000 homes a year.

However, it’s not just the facts that are important. Small builders typically live in the communities in which they build which means they: Have an intimate knowledge of the streets and districts where they operate, enabling them to size and plan projects in an efficient and cost-effective manner.

Have supply chains that will include local materials and labour, contributing to the local economy and affluence of an area.

Are ever aware of the concerns and aspirations of their community and the push and pull of the local politics.

This enables them to predict the hurdles they will face during the planning and building process.

Know that they are only as good as their last project. Their brand, their reputation and their balance sheet are on the line each time a new scheme comes to market. That is why local developers know that they need to selfimpose the highest standards in design, materials and build quality through the planning, design and building process.

It is this in-depth knowledge of the DNA of a local market which allows SME developers to mobilise and deliver sites that larger and less connected operators would deem

34 | NACFB Magazine

too small or too difficult to build. Small is beautiful, whether it’s the sites that are built upon or the builder who delivers them and we cannot afford to overlook small- and medium-sized housebuilders and developers operating across England and Wales when considering how to tackle housing shortages for local people.

But what can be done to stimulate growth in the number of small builders operating in our towns and cities? The fact remains that a one-size-fits-all planning process has created a blind spot for small builders and the sites they wish to develop. This is reflected in our planning system which is over engineered. There is too much conditionality where the rules do not reflect the reality of delivering smaller sites. Furthermore, associated 106 agreements are overbearing in their demands, whether social or financial, and ignore the indirect economic benefits of infill and brownfield sites. Equally, local plans largely ignore smaller sites on both public and private property and only come forward on a case-by-case basis, adding to the uncertainty of what can be delivered where and at what cost.

Planners and developers need to build proper commercial relationships at a local level. There are plenty of platforms on which this can be done, whether it’s through bespoke forums or through local clubs, associations and chambers. Unfortunately, local officials can often fear that developing productive relationships with housebuilders might be viewed with suspicion, and fear that their professional integrity might be called into question. This must be replaced with bravery and a determination to create trust and a desire to conduct business in an open and honest manner through regular, face-to-face interaction. Collaborative rather than combative is the way forward.

Through these relationships, planners will find that they have a local private sector community which can identify small sites that can be nominated for the local plan.

More of the right kind of homes in the

right places is a win for the planners, the housebuilders and the local community.

All developers face a mountain of potential pre-commencement conditions when trying to gain permission to build. These should be restricted to a handful of essential pre-commencement conditions with the balance marked pre-occupation so as not to drain the housebuilder of their resources before even starting the groundworks. Reasonable and sensible conditions are useful and protect future homeowners and the existing community, but to take just one example, the preapproval of bat boxes is not helpful to anyone, least of all the bats themselves.

It also appears to me that saddling smaller developers with the responsibility of providing affordable housing is to hamstring them at a critical stage in their evolution, when they will be investing their profits in the growth of their businesses.

Economies of scale should be properly reflected by lifting the threshold at which social housing considerations come into play. Placing these requirements on the larger and more accessible sites targeted by national housebuilders would be much fairer. It is much easier to blend the lower margins achieved on social housing units on a 200-unit site than it is on a 12-unit site.

Equally, any financial contributions liable under the community infrastructure levy should be allowed to be settled on a ‘build now, pay later’ basis when sales income can be used rather than having to pay it before a project has started and the cash to get a project off the ground may already be tight.

SME housebuilders could play a more significant role in delivering the UK’s new housing needs. Removing obstacles in the planning system, reducing red tape and recognising that smaller housebuilders complement national housebuilders rather than compete against them, would be big steps towards reinvigorating the SME sector.

SPEED MEETS KNOWLEDGE 020 7655 3388

Fast property finance At Commercial Acceptances speed alone is not enough. Speak straight to decision makers: a quick and personal service. No arrangement fees, no extension fees and no end fees. Interest charged from only 0.75% per calendar month.

Your property may be repossessed if you do not keep up on your mortgage repayments or any other debt secured on it. A rate from 0.75% will be chargeable on the amount borrowed every calendar month. However rates are subject to change and will increase or decrease in line with movements in 3m LIBOR (The London Inter-Bank Offered Rate For Three Month Sterling Deposits). Rates will be adjusted on each calendar month anniversary of the facility. The overall cost for comparison is 10.6% APR.

SPECIAL FEATURES

SPECIAL FEATURES

The importance of diversity, inclusion and understanding in the workplace Laura Roberts Legal director Liberty Leasing

H

aving worked in finance for over 15 years, Laura Roberts, legal director of Liberty Leasing, is passionate about diversity within the workplace. As a woman, a mother and a wheelchair user, Laura offers her unique and honest insight on how perceptions are changing as well as how the industry is making efforts to embrace equality, diversity and inclusion.

A chance meeting My first experience of the finance industry was back in 2001 when I completed a placement year with State Securities while studying at Bournemouth University.

However, my first ‘proper’ job after graduating began with a chance meeting on a train. I met a lady who was curious about the logistics of travelling on my own in an electric wheelchair, as her son was also a wheelchair user. She encouraged me to

36 | NACFB Magazine

send over my CV for the graduate scheme at Bibby Financial Services, which is how my career started in the finance industry and where I was dealing with invoice finance. State Securities did, however, entice me back and I was able to progress and complete my legal practice course (LPC) with them to become a qualified solicitor, which had always been my goal before going to university. I was really grateful as they had to implement quite a few changes in order for me to do my training contract.

A shift in attitudes I’ve always been treated equally, whether that be by my family, friends or work colleagues. But there have been times when it was very clear that my disability was causing an issue. I once attended an interview where the interviewer spent the majority of the interview talking about how their fire evacuation procedure would need changing, rather than finding out about me as a potential candidate and my relevant skills. I attended a money laundering course in 2007, but I was the only female in the room and the youngest

by far. Although people have always been accepting at these sorts of events and conferences, I have, at times, had to politely smile off a few comments such as “You are too young to be here” or “Are you able to understand all of this?”

As I deal with accountancy and legal firms, I’ve witnessed a more even mix of men and women in senior positions in these sectors. From encounters and dealings with individuals at the early stages of their careers, I have found them to be respectful, open minded and they seem to genuinely value and thrive off the experience and knowledge of their senior colleagues. So, even though the finance world does appear to have a bit of catching up to do, there are definitely positive efforts taking place and steps in the right direction being made.

Diversity and inclusion research programme This year, I became a contributing member to a research programme which is designed to understand diversity and inclusion in business finance organisations. Something

like this is certainly an encouraging initiative and the aim is to identify barriers and opportunities, uncover best practices and pinpoint interventions that work.

Peter Thomas, executive director of the Leasing Foundation, who is conducting this research on behalf of the foundation, said: “We think it’s important to get under the surface of what inclusion really means. That’s why we have designed our research to not just identify what people are doing in promoting inclusion, but also to understand how effective current interventions are in terms of how people feel included. To do that, we are not just talking to those who are taking the lead on promoting inclusive workplaces, but as part of our research inviting everyone in the industry to tell us what works and what doesn’t – and why. We’re looking for a way to help companies move beyond talking inclusion, to doing inclusion brilliantly.”

People-first approach Being involved in HR and recruitment, one aspect I really admire about Liberty

We think it’s important to get under the surface of what inclusion really means. That’s why we have designed our research to not just identify what people are doing in promoting inclusion, but also to understand how effective current interventions are in terms of how people feel included.

is its ‘people-first’ approach. The focus is on ensuring Liberty employs people who have the right attitude and personality who will fit in, with any training needs being secondary. But when it comes to training, instead of adopting a ‘one-size-fits-all’ training programme, we identify their needs and come up with a development plan that is right for them and their career path. I’ve recently hired a legal assistant and, although there were candidates with relevant experience, and the lady I employed came from a retail background, it was obvious she was the right person and fit for Liberty and my team. We are going to support her through her legal training leading to a qualification and I believe this investment is worthwhile for her career and to Liberty.

NACFB Magazine | 37

SPECIAL FEATURES

SPECIAL FEATURES

The importance of diversity, inclusion and understanding in the workplace Laura Roberts Legal director Liberty Leasing

H

aving worked in finance for over 15 years, Laura Roberts, legal director of Liberty Leasing, is passionate about diversity within the workplace. As a woman, a mother and a wheelchair user, Laura offers her unique and honest insight on how perceptions are changing as well as how the industry is making efforts to embrace equality, diversity and inclusion.

A chance meeting My first experience of the finance industry was back in 2001 when I completed a placement year with State Securities while studying at Bournemouth University.

However, my first ‘proper’ job after graduating began with a chance meeting on a train. I met a lady who was curious about the logistics of travelling on my own in an electric wheelchair, as her son was also a wheelchair user. She encouraged me to

36 | NACFB Magazine

send over my CV for the graduate scheme at Bibby Financial Services, which is how my career started in the finance industry and where I was dealing with invoice finance. State Securities did, however, entice me back and I was able to progress and complete my legal practice course (LPC) with them to become a qualified solicitor, which had always been my goal before going to university. I was really grateful as they had to implement quite a few changes in order for me to do my training contract.

A shift in attitudes I’ve always been treated equally, whether that be by my family, friends or work colleagues. But there have been times when it was very clear that my disability was causing an issue. I once attended an interview where the interviewer spent the majority of the interview talking about how their fire evacuation procedure would need changing, rather than finding out about me as a potential candidate and my relevant skills. I attended a money laundering course in 2007, but I was the only female in the room and the youngest

by far. Although people have always been accepting at these sorts of events and conferences, I have, at times, had to politely smile off a few comments such as “You are too young to be here” or “Are you able to understand all of this?”

As I deal with accountancy and legal firms, I’ve witnessed a more even mix of men and women in senior positions in these sectors. From encounters and dealings with individuals at the early stages of their careers, I have found them to be respectful, open minded and they seem to genuinely value and thrive off the experience and knowledge of their senior colleagues. So, even though the finance world does appear to have a bit of catching up to do, there are definitely positive efforts taking place and steps in the right direction being made.

Diversity and inclusion research programme This year, I became a contributing member to a research programme which is designed to understand diversity and inclusion in business finance organisations. Something

like this is certainly an encouraging initiative and the aim is to identify barriers and opportunities, uncover best practices and pinpoint interventions that work.

Peter Thomas, executive director of the Leasing Foundation, who is conducting this research on behalf of the foundation, said: “We think it’s important to get under the surface of what inclusion really means. That’s why we have designed our research to not just identify what people are doing in promoting inclusion, but also to understand how effective current interventions are in terms of how people feel included. To do that, we are not just talking to those who are taking the lead on promoting inclusive workplaces, but as part of our research inviting everyone in the industry to tell us what works and what doesn’t – and why. We’re looking for a way to help companies move beyond talking inclusion, to doing inclusion brilliantly.”

People-first approach Being involved in HR and recruitment, one aspect I really admire about Liberty

We think it’s important to get under the surface of what inclusion really means. That’s why we have designed our research to not just identify what people are doing in promoting inclusion, but also to understand how effective current interventions are in terms of how people feel included.

is its ‘people-first’ approach. The focus is on ensuring Liberty employs people who have the right attitude and personality who will fit in, with any training needs being secondary. But when it comes to training, instead of adopting a ‘one-size-fits-all’ training programme, we identify their needs and come up with a development plan that is right for them and their career path. I’ve recently hired a legal assistant and, although there were candidates with relevant experience, and the lady I employed came from a retail background, it was obvious she was the right person and fit for Liberty and my team. We are going to support her through her legal training leading to a qualification and I believe this investment is worthwhile for her career and to Liberty.

NACFB Magazine | 37

SPECIAL FEATURES

We’re redefining standard The Knights Foundation Liberty has become a patron of the Knights Foundation, an organisation close to my heart and one that illustrates the importance of diversity and equality in the workplace.

Nicky Banger, CEO of the Knights Foundation, explained this point perfectly: “My daughter Sophia has cerebral palsy and now, as a young teenager, she has worries and concerns about what she will do with her life when she grows up. Like any parent, I encourage her that she can achieve anything she puts her mind to regardless of her physical limitations. She actually wants to be a lawyer - and with her sharp

mind she will be fantastic - but until I met Laura, I had no one to say to Sophia: ‘Look at what this person achieved, you can do the same’. One aspect of the work we do at the Knights Foundation is to work with businesses and speak to them about how they can make accessibility adjustments and improvements. It shouldn’t be about having to employ someone with a disability, but more about not missing out on the right person for your business due to an accessibility issue and the impossible cost of making adaptations.”

For there to be positive change and to move forward, we need to be honest and realistic about the current situation and

hopefully things like the Leasing Foundation programme will help open eyes and bring attention to the need for change.

Recruiting people on merit, their skills and attitude is far more important than ticking boxes, meeting quotas or potential PR reasons. Diversity and inclusion should be ingrained into the company culture and represent a basic commitment of any company doing business in today’s world.

In my opinion, it’s about dealing with people as individuals, with respect, without judgement and being understanding to our differences and accepting of them.

We’ve put a lot of thought into our newly extended suite of short-term lending products.

In an increasingly diverse world we know brokers need maximum flexibility to handle the widest possible range of client scenarios.

Standard bridging that’s anything but standard • • • • •

Prime Bridging Standard Bridging Light Development Development Commercial

Are you ready to rethink what standard means?

masthaven.co.uk Masthaven Bank Limited is a company registered in England & Wales with registration number 09660012 and whose registered office is at: 11 Soho Street, London W1D 3AD. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Firm reference number 719354).

38 | NACFB Magazine

The “Masthaven” name and logos and all other brands, names, logos, marks and slogans on this document are the trademarks or service marks of us or our licensors.

SPECIAL FEATURES

We’re redefining standard The Knights Foundation Liberty has become a patron of the Knights Foundation, an organisation close to my heart and one that illustrates the importance of diversity and equality in the workplace.

Nicky Banger, CEO of the Knights Foundation, explained this point perfectly: “My daughter Sophia has cerebral palsy and now, as a young teenager, she has worries and concerns about what she will do with her life when she grows up. Like any parent, I encourage her that she can achieve anything she puts her mind to regardless of her physical limitations. She actually wants to be a lawyer - and with her sharp

mind she will be fantastic - but until I met Laura, I had no one to say to Sophia: ‘Look at what this person achieved, you can do the same’. One aspect of the work we do at the Knights Foundation is to work with businesses and speak to them about how they can make accessibility adjustments and improvements. It shouldn’t be about having to employ someone with a disability, but more about not missing out on the right person for your business due to an accessibility issue and the impossible cost of making adaptations.”

For there to be positive change and to move forward, we need to be honest and realistic about the current situation and

hopefully things like the Leasing Foundation programme will help open eyes and bring attention to the need for change.

Recruiting people on merit, their skills and attitude is far more important than ticking boxes, meeting quotas or potential PR reasons. Diversity and inclusion should be ingrained into the company culture and represent a basic commitment of any company doing business in today’s world.

In my opinion, it’s about dealing with people as individuals, with respect, without judgement and being understanding to our differences and accepting of them.

We’ve put a lot of thought into our newly extended suite of short-term lending products.

In an increasingly diverse world we know brokers need maximum flexibility to handle the widest possible range of client scenarios.

Standard bridging that’s anything but standard • • • • •

Prime Bridging Standard Bridging Light Development Development Commercial

Are you ready to rethink what standard means?

masthaven.co.uk Masthaven Bank Limited is a company registered in England & Wales with registration number 09660012 and whose registered office is at: 11 Soho Street, London W1D 3AD. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Firm reference number 719354).

38 | NACFB Magazine

The “Masthaven” name and logos and all other brands, names, logos, marks and slogans on this document are the trademarks or service marks of us or our licensors.

SPECIAL FEATURES

SPECIAL FEATURES

Commercial finance brokers overwhelmingly positive on growth Stuart Hughes Broker manager Investec Asset Finance

Each year, Investec carries out an in-depth survey of more than 100 UK asset finance brokers. Alongside regular contact with our customers, this survey helps us to ensure that we know what brokers are looking for, so that we can support them in their growth ambitions.

We get responses from across the length and breadth of the country, and brokers of all sizes take part.

40 | NACFB Magazine

T

his year, we have analysed those results and used the findings to build a picture of what the industry expects over the next 12 months, focusing on the plans of asset finance brokers for the future and what they see as the major growth opportunities. In brief, what’s the mood of

94%

94%

the industry, and what challenges are your peers gearing up for?

stay fairly constant. Just one in 20 (6%) expected volumes to materially decline.

Great expectations The most striking finding from our research was that commercial finance brokers are overwhelmingly positive on growth.

When we asked what brokers thought would happen to business volumes over the next 12 months, nearly a quarter (23%) said that they expected them to increase by more than 15%. A further 40% expected volumes to increase by between five and 15%, and 23% expected them to

Recent figures from the Finance & Leasing Association (FLA) showed that asset finance new business as a whole grew by 5% in the second quarter of 2018, but had fallen by 3% in June year-on-year.

94%

23%

23% 5%

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After a significant dip in 2008/09, asset finance volumes generally have had a good run, so at first glance you could argue that these figures reflect a continuation of that steady growth. However, increasing volumes by more than 5% is not something that simply happens: any broker or

94%

lender will tell you that, in order to grow your book in a way that is sustainable, takes great care and consideration.

With that in mind, we also looked at how brokers expected to grow: what techniques would they use to achieve that level of growth without compromising on quality?

Fuelling growth through diversification We asked the same panel of brokers what they saw as the growth areas for

their business. There was a broad range of responses, but the majority (57%) said that they would expand into new sectors, with potential industries including fitness, recycling and data centre equipment. FLA research from Q2 2018 showed that certain sectors had outperformed the market significantly: IT equipment finance grew by 15%, for example, while plant and machinery finance remained flat and business equipment finance volumes shrunk by 2%.

Just over a third (37%) would focus on different or new products. Some were exploring specialist loans such as VAT

37% 57% 37% 57% 37% 37% 37% 57% 57% 57% 23% 23% 23% 9% 15% 9% 15% 5% 15% 5% 15%9% 15% 5% 5% 6% 6%

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NACFB Magazine | 41

SPECIAL FEATURES

SPECIAL FEATURES

Commercial finance brokers overwhelmingly positive on growth Stuart Hughes Broker manager Investec Asset Finance

Each year, Investec carries out an in-depth survey of more than 100 UK asset finance brokers. Alongside regular contact with our customers, this survey helps us to ensure that we know what brokers are looking for, so that we can support them in their growth ambitions.

We get responses from across the length and breadth of the country, and brokers of all sizes take part.

40 | NACFB Magazine

T

his year, we have analysed those results and used the findings to build a picture of what the industry expects over the next 12 months, focusing on the plans of asset finance brokers for the future and what they see as the major growth opportunities. In brief, what’s the mood of

94%

94%

the industry, and what challenges are your peers gearing up for?

stay fairly constant. Just one in 20 (6%) expected volumes to materially decline.

Great expectations The most striking finding from our research was that commercial finance brokers are overwhelmingly positive on growth.

When we asked what brokers thought would happen to business volumes over the next 12 months, nearly a quarter (23%) said that they expected them to increase by more than 15%. A further 40% expected volumes to increase by between five and 15%, and 23% expected them to

Recent figures from the Finance & Leasing Association (FLA) showed that asset finance new business as a whole grew by 5% in the second quarter of 2018, but had fallen by 3% in June year-on-year.

94%

23%

23% 5%

94%

After a significant dip in 2008/09, asset finance volumes generally have had a good run, so at first glance you could argue that these figures reflect a continuation of that steady growth. However, increasing volumes by more than 5% is not something that simply happens: any broker or

94%

lender will tell you that, in order to grow your book in a way that is sustainable, takes great care and consideration.

With that in mind, we also looked at how brokers expected to grow: what techniques would they use to achieve that level of growth without compromising on quality?

Fuelling growth through diversification We asked the same panel of brokers what they saw as the growth areas for

their business. There was a broad range of responses, but the majority (57%) said that they would expand into new sectors, with potential industries including fitness, recycling and data centre equipment. FLA research from Q2 2018 showed that certain sectors had outperformed the market significantly: IT equipment finance grew by 15%, for example, while plant and machinery finance remained flat and business equipment finance volumes shrunk by 2%.

Just over a third (37%) would focus on different or new products. Some were exploring specialist loans such as VAT

37% 57% 37% 57% 37% 37% 37% 57% 57% 57% 23% 23% 23% 9% 15% 9% 15% 5% 15% 5% 15%9% 15% 5% 5% 6% 6%

These br The increase Over half increase equipment Over half of Over These halfIT brokers ofequipment ITofequipment IT The equipment brokers TheseThe brokers An extremelyAn extremely Nearly a Nearly An aextremely The increase An extremely Nearly An Over extremely ahalf ofNearly aTheITof equipment Nearly aTheITincrease These The increase brokers Over Lesshalf than a LessThese than a relatively relatively Less than willob in new quarter asset brokers in said new asset of brokers said brokers will said befinance finance be support will be support heartening heartening quarter of quarter heartening of in new asset heartening brokers heartening of said quarter of quarter finance in newfinance asset in new will be asset brokers tenthsaid of finance tenth will ofsmall small tenth finance busifinance they busithat they busithat focussed they surges, on surges, focussed surges, on focussed on focusse percentage of percentage these of positive these positive percentage finance busiof percentage these of percentage that positive they these of that positive these surges, positive financesurges, busifinance focussed on brokers that they would brokers would for increasing for increasing brokers wo new offe ness by midwould ness be by mid-ness would to offerings, bemidwould new offerings, be according tobe according new toaccording offerings, to offerings, brokers brokers brokers brokers brokers ness by mid-brokers brokers would brokers be brokers according brokers toaccording by midnew ness by be would expanding be expanding loan new sizes loan besizes expand 2018 reported driving 2018 reported FLA’s2018 driving Q2 specialist with driving specialist the FLA’s Q2 the FLA’s with Q2 the specialist FLA’swith Q2a specialist believe busi-believe busibelieve the believe believe the 2018 reported busi-believe busibelieve believe driving thebusibelieve the the believe FLA’s2018 the Q2 the reported with reported driving through through hints at hintswith through at a spe and the FLA growth by2018 the FLA research growth and growth hard 2018 asset research 2018 research and2018 hard research asset and asset ness volumesness volumes increase will increase ness will by volumes the FLA nessby volumes increase ness growth volumes will increase will increase research will by2018 the FLA and byhard the FLA asset investment growth in investment infocus onhardfocus investmen on hard lendi through through lendingstaffing lending lending will grow over will growbe over more thanbe more willthan grow over will growbe over more willthrough grow thanbe over more thanbe more than lending through through and/or staffing and/or long-term long-term staffing and provi diversifying provingdiversifying proving proving the next 12 the next 12 15% 15% the next 12 the next 12 diversifying 15% the next 12 diversifying 15% 15% provingdiversifying infrastructure infrastructure sustainability sustainability infrastruct popu intopopular new intopopular new popular popular months months months months into months new into new into in the new next in the next in the sector in thein sector the ne sectors sectors sectors sectors sectors year year year

NACFB Magazine | 41

SPECIAL FEATURES

Unsurprisingly, economic uncertainty featured strongly – particularly Brexit – and some brokers had noted that clients were still deferring purchases due to the perceived additional risks, hurting growth. finance or those with more esoteric structure, but many were looking at writing more deals with hard assets – an area in which Investec has been increasingly active.

A smaller number of businesses indicated that they would focus on customer acquisition and marketing (16%) and improving their infrastructure (9%), for example, by taking on more staff or streamlining processes.

Only one in 20 (6%) said that they would be growing by increasing loan sizes, suggesting that overall, the industry is focused on sustainable, conservative growth rather than chasing bigger volumes at all costs.

What does it all mean?

It is a good time to be in asset finance – and despite some obstacles ahead, it’s reassuring to see that brokers remain confident that they have what it takes to grow despite an uncertain economy.

We remain committed to helping brokers grow in a sustainable way, and although brokers are aware of the challenges ahead, there are clearly opportunities for good brokers to flourish over the year ahead.

We went pro and started lending our own capital back in 2009.

From kick-off to completion, you win with Amicus:

Over a long career in the game, we’ve built a team that’s known for speed, efficiency and excellent deal control, guided by hands-on management.

• Lending to cover all angles

• NET LTV lending – when we say it’s 70%, it’s 70%* • Dedicated drawdown team for quick results • We don’t move the goalposts – when we say we’ll do something, we do it.

Unsurprisingly, economic uncertainty featured strongly – particularly Brexit – and some brokers had noted that clients were still deferring purchases due to the perceived additional risks, hurting growth.

Speaking in August, Investec economist Victoria Clarke noted that a “‘no deal’ could encompass a multitude of sins, from an agreement to trade on WTO schedules preceded by an implementation period, to (an extreme) complete standstill in relations between the UK and the EU”.

It is not surprising that these threats are weighing down on business confidence.

37% 37% 37%

57%

5%

Managing uncertainty We also asked businesses what they saw as the risks to their growth, and many pointed to increasing competition in the markets, noting that an overcrowded market was causing difficulties for both lenders and brokers. Downward pressure on prices as a result of this competition was cited by many – although some named new lenders as a threat, while others were more concerned about larger banks entering the market.

Your winning team

15%

15%

9%

9%

9% 6%

6%

6%

These brokers er uipment half of IT equipment IT equipment These brokers These Less brokers than a Less than aThe Lessrelatively than aThe relatively The relatively be nance kers said finance will finance will be tenth will beof tenth of small tenth support of small support small support urges, at they surges, focussed surges,onfocussed on brokers focussed would on brokers would brokers for increasing would for increasing for increasing offerings, ould rdingbeto accordingnew to according new to offerings, new be expanding offerings, be expanding beloan expanding sizes loan sizes loan sizes FLA’s rivingQ2the FLA’s with Q2 thespecialist FLA’s Q2 with specialist withthrough specialist through hints through at a hints at a hints at a and hard asset rowth research 2018 research 2018 research and hard asset and investment hard asset investment in investment in focus on in focus on focus on lending lendingstaffing hrough lending and/or staffing and/or staffing long-term and/orlong-term long-term proving proving infrastructure ersifying proving infrastructure infrastructure sustainability sustainability sustainability popular popular inpopular to new the next in the nextin inthe thesector next in the sector in the sector ectors year year year

42 | NACFB Magazine

*Unregulated products only. Fees and interest added to the loan amount. All loans subject to underwriting criteria.

Tel: 020 3540 5120 Discover more at amicuspropertyfinance.co.uk/lending/your-winning-team For professional intermediary use only.

Loans offered subject to underwriting criteria.

Amicus Property Finance is a trading name of Amicus Finance Plc which is registered for anti-money laundering purposes, our FCA Registration Number is 735544. You can confirm our registration on the FCA’s website www.fca.org.uk or by contacting the FCA on 0800 111 6768. Registered in England & Wales, no. 06994954. Registered office: 7 Air Street, London W1B 5AD.

SPECIAL FEATURES

Unsurprisingly, economic uncertainty featured strongly – particularly Brexit – and some brokers had noted that clients were still deferring purchases due to the perceived additional risks, hurting growth. finance or those with more esoteric structure, but many were looking at writing more deals with hard assets – an area in which Investec has been increasingly active.

A smaller number of businesses indicated that they would focus on customer acquisition and marketing (16%) and improving their infrastructure (9%), for example, by taking on more staff or streamlining processes.

Only one in 20 (6%) said that they would be growing by increasing loan sizes, suggesting that overall, the industry is focused on sustainable, conservative growth rather than chasing bigger volumes at all costs.

What does it all mean?

It is a good time to be in asset finance – and despite some obstacles ahead, it’s reassuring to see that brokers remain confident that they have what it takes to grow despite an uncertain economy.

We remain committed to helping brokers grow in a sustainable way, and although brokers are aware of the challenges ahead, there are clearly opportunities for good brokers to flourish over the year ahead.

We went pro and started lending our own capital back in 2009.

From kick-off to completion, you win with Amicus:

Over a long career in the game, we’ve built a team that’s known for speed, efficiency and excellent deal control, guided by hands-on management.

• Lending to cover all angles

• NET LTV lending – when we say it’s 70%, it’s 70%* • Dedicated drawdown team for quick results • We don’t move the goalposts – when we say we’ll do something, we do it.

Unsurprisingly, economic uncertainty featured strongly – particularly Brexit – and some brokers had noted that clients were still deferring purchases due to the perceived additional risks, hurting growth.

Speaking in August, Investec economist Victoria Clarke noted that a “‘no deal’ could encompass a multitude of sins, from an agreement to trade on WTO schedules preceded by an implementation period, to (an extreme) complete standstill in relations between the UK and the EU”.

It is not surprising that these threats are weighing down on business confidence.

37% 37% 37%

57%

5%

Managing uncertainty We also asked businesses what they saw as the risks to their growth, and many pointed to increasing competition in the markets, noting that an overcrowded market was causing difficulties for both lenders and brokers. Downward pressure on prices as a result of this competition was cited by many – although some named new lenders as a threat, while others were more concerned about larger banks entering the market.

Your winning team

15%

15%

9%

9%

9% 6%

6%

6%

These brokers er uipment half of IT equipment IT equipment These brokers These Less brokers than a Less than aThe Lessrelatively than aThe relatively The relatively be nance kers said finance will finance will be tenth will beof tenth of small tenth support of small support small support urges, at they surges, focussed surges,onfocussed on brokers focussed would on brokers would brokers for increasing would for increasing for increasing offerings, ould rdingbeto accordingnew to according new to offerings, new be expanding offerings, be expanding beloan expanding sizes loan sizes loan sizes FLA’s rivingQ2the FLA’s with Q2 thespecialist FLA’s Q2 with specialist withthrough specialist through hints through at a hints at a hints at a and hard asset rowth research 2018 research 2018 research and hard asset and investment hard asset investment in investment in focus on in focus on focus on lending lendingstaffing hrough lending and/or staffing and/or staffing long-term and/orlong-term long-term proving proving infrastructure ersifying proving infrastructure infrastructure sustainability sustainability sustainability popular popular inpopular to new the next in the nextin inthe thesector next in the sector in the sector ectors year year year

42 | NACFB Magazine

*Unregulated products only. Fees and interest added to the loan amount. All loans subject to underwriting criteria.

Tel: 020 3540 5120 Discover more at amicuspropertyfinance.co.uk/lending/your-winning-team For professional intermediary use only.

Loans offered subject to underwriting criteria.

Amicus Property Finance is a trading name of Amicus Finance Plc which is registered for anti-money laundering purposes, our FCA Registration Number is 735544. You can confirm our registration on the FCA’s website www.fca.org.uk or by contacting the FCA on 0800 111 6768. Registered in England & Wales, no. 06994954. Registered office: 7 Air Street, London W1B 5AD.

SPECIAL FEATURES

What does the interest rate rise mean for SMEs and their future plans?

Technology Finance

Finance for the pace of change

As technology continues to evolve dramatically, those businesses able to cope with the rapid rate of change are creating competitive advantages by investing in the right critical platforms, software, hardware and infrastructure.

Whilst the benefits can be transformational the associated costs of maintaining or upgrading existing systems can have a significant impact on any business. Our technology finance options have been developed to help manage these costs, enabling your clients to move forward at pace.

Technology Finance at a Glance The assets and services we will finance:

Marc Bajer CEO Hadrian’s Wall Capital

T

his September marks the 10th anniversary of the collapse of Lehman Brothers. It also sees businesses dealing with the latest interest rate rise from the Bank of England.

The two events are not completely unconnected. August’s interest rate rise is part of the process for the Bank of England indicating that the economy is improving and now healthy enough to survive the transition from virtually zero interest rates to interest rates that reflect a healthier economic environment. The emergency low level of interest rates brought in as a consequence of the Lehman Brothers collapse no longer seem to be needed.

Therefore, the Bank of England is now allowing rates to start rising again.

Unfortunately, the return to normalcy in interest rates is likely to have a knock-on impact for tens of thousands of small businesses. The cost of rising interest payments from the interest rate rise would be far less if there was more fixed rate debt made available to SMEs.

While the recent 0.25% increase may seem modest, our estimates reveal costs will actually jump from £3.9bn to £4.2bn overnight for British SMEs. Those interest payments eat into cash flow and, of course, make new capital investment and corporate finance activity – such as debt-funded MBOs and MBIs – look far less attractive for business owners.

Businesses are exposed to the interest rate rise because they are now predominantly using floating rate lending - £128.6bn of lending is floating rate. Data from the Bank of England shows that this makes up 83% of the total amount of lending to SMEs in the UK. Fixed rate lending that would protect businesses from interest rate rises has just become too rare.

If businesses want to protect against the threat rising rates pose to their operations, they need to start thinking about using fixed rate lending. Very few of us believe that the most recent interest rate rise is the last. Each future rate rise will heap more interest costs on to SMEs. Not so long ago, SMEs would have found protection against rising rates by buying interest rates swaps. However, the swaps mis-selling scandal – which led to widespread distress among borrowers and embarrassment for the banks – means that interest swaps are not an

option for SMEs. Banks are simply unable to sell swaps to an SME due to capital adequacy rules imposed upon the banks by the regulators and many SMEs view swaps as too complicated and risky.

So, if interest rates continue heading higher towards historical norms, many businesses will simply find it more difficult to afford repayments on their debt unless they have switched their floating rate debt for fixed rate debt. We would anticipate the recent interest rate rise will start to focus the minds of many business owners on how they can keep the effects of rising interest rates in check.

Hardware: laptops, desktops, displays, tablets and smartphones, printers, scanners, servers, switches, local and wireless networks, telephony systems, security, EPOS, digital signage

■

Software: all business critical software including hosted software and variable licence agreements

■

Services: warranties, customisation, consultancy, training, installation and deployment, Year 1 support, delivery, design

In addition to these assets and services, we are also able to fund related investments that form part of a technology based facility – including lighting, furniture, partitioning, cabling and flooring, climate control and air-conditioning.

Banks have limited the amount of fixed rate lending which they make available to small businesses. They don’t want to be trapped as their funding costs rise and thus be unable to pass these higher costs on to their customers. That restriction of supply actually provides a great opportunity to corporate finance brokers and advisers.

Corporate finance brokers are able to provide real value to their clients by sourcing financing that is not widely available from high street banks. Funders such as Hadrian’s Wall – which specialise in fixed rate debt for small businesses – deliver protection from rising interest rates which your clients will need in this new rising rate environment.

■

The solutions we offer: ■

Lease

■

Hire Purchase

■

Loans

Key advantages of working with us:

Call: 01277 892 281 technology@shawbrook.co.uk shawbrook.co.uk/technology Proudly different.

■

Our leases cover 100% of software costs and up to 49% for services

■

Preserve capital, protect cash flow and existing lines of credit with a dedicated technology funding line

■

Finance technology investment in whole or in part, including hardware, software and servicing

■

Simplify the financial impact and management of upgrades and maintenance

■

Terms from 1 to 5 years, tailored to the life cycle of the technology

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS GC_BF_TEF_NACFBAd_20180216_V2

44 | NACFB Magazine

SPECIALIST SECTOR FINANCE: AGRICULTURE | AVIATION | HEALTHCARE | MARINE | RENEWABLES | TAXI | TECHNOLOGY

SPECIAL FEATURES

What does the interest rate rise mean for SMEs and their future plans?

Technology Finance

Finance for the pace of change

As technology continues to evolve dramatically, those businesses able to cope with the rapid rate of change are creating competitive advantages by investing in the right critical platforms, software, hardware and infrastructure.

Whilst the benefits can be transformational the associated costs of maintaining or upgrading existing systems can have a significant impact on any business. Our technology finance options have been developed to help manage these costs, enabling your clients to move forward at pace.

Technology Finance at a Glance The assets and services we will finance:

Marc Bajer CEO Hadrian’s Wall Capital

T

his September marks the 10th anniversary of the collapse of Lehman Brothers. It also sees businesses dealing with the latest interest rate rise from the Bank of England.

The two events are not completely unconnected. August’s interest rate rise is part of the process for the Bank of England indicating that the economy is improving and now healthy enough to survive the transition from virtually zero interest rates to interest rates that reflect a healthier economic environment. The emergency low level of interest rates brought in as a consequence of the Lehman Brothers collapse no longer seem to be needed.

Therefore, the Bank of England is now allowing rates to start rising again.

Unfortunately, the return to normalcy in interest rates is likely to have a knock-on impact for tens of thousands of small businesses. The cost of rising interest payments from the interest rate rise would be far less if there was more fixed rate debt made available to SMEs.

While the recent 0.25% increase may seem modest, our estimates reveal costs will actually jump from £3.9bn to £4.2bn overnight for British SMEs. Those interest payments eat into cash flow and, of course, make new capital investment and corporate finance activity – such as debt-funded MBOs and MBIs – look far less attractive for business owners.

Businesses are exposed to the interest rate rise because they are now predominantly using floating rate lending - £128.6bn of lending is floating rate. Data from the Bank of England shows that this makes up 83% of the total amount of lending to SMEs in the UK. Fixed rate lending that would protect businesses from interest rate rises has just become too rare.

If businesses want to protect against the threat rising rates pose to their operations, they need to start thinking about using fixed rate lending. Very few of us believe that the most recent interest rate rise is the last. Each future rate rise will heap more interest costs on to SMEs. Not so long ago, SMEs would have found protection against rising rates by buying interest rates swaps. However, the swaps mis-selling scandal – which led to widespread distress among borrowers and embarrassment for the banks – means that interest swaps are not an

option for SMEs. Banks are simply unable to sell swaps to an SME due to capital adequacy rules imposed upon the banks by the regulators and many SMEs view swaps as too complicated and risky.

So, if interest rates continue heading higher towards historical norms, many businesses will simply find it more difficult to afford repayments on their debt unless they have switched their floating rate debt for fixed rate debt. We would anticipate the recent interest rate rise will start to focus the minds of many business owners on how they can keep the effects of rising interest rates in check.

Hardware: laptops, desktops, displays, tablets and smartphones, printers, scanners, servers, switches, local and wireless networks, telephony systems, security, EPOS, digital signage

■

Software: all business critical software including hosted software and variable licence agreements

■

Services: warranties, customisation, consultancy, training, installation and deployment, Year 1 support, delivery, design

In addition to these assets and services, we are also able to fund related investments that form part of a technology based facility – including lighting, furniture, partitioning, cabling and flooring, climate control and air-conditioning.

Banks have limited the amount of fixed rate lending which they make available to small businesses. They don’t want to be trapped as their funding costs rise and thus be unable to pass these higher costs on to their customers. That restriction of supply actually provides a great opportunity to corporate finance brokers and advisers.

Corporate finance brokers are able to provide real value to their clients by sourcing financing that is not widely available from high street banks. Funders such as Hadrian’s Wall – which specialise in fixed rate debt for small businesses – deliver protection from rising interest rates which your clients will need in this new rising rate environment.

■

The solutions we offer: ■

Lease

■

Hire Purchase

■

Loans

Key advantages of working with us:

Call: 01277 892 281 technology@shawbrook.co.uk shawbrook.co.uk/technology Proudly different.

■

Our leases cover 100% of software costs and up to 49% for services

■

Preserve capital, protect cash flow and existing lines of credit with a dedicated technology funding line

■

Finance technology investment in whole or in part, including hardware, software and servicing

■

Simplify the financial impact and management of upgrades and maintenance

■

Terms from 1 to 5 years, tailored to the life cycle of the technology

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS GC_BF_TEF_NACFBAd_20180216_V2

44 | NACFB Magazine

SPECIALIST SECTOR FINANCE: AGRICULTURE | AVIATION | HEALTHCARE | MARINE | RENEWABLES | TAXI | TECHNOLOGY

Industry | guides Insider tips from the Association’s Patrons and Members

Cleared for take off - a guide to aviation finance The ability to finance aircraft gives brokers an opportunity to spread their wings, broadening their appeal to a wider range of clients.

Daniel Bailey Executive Director Arkle Finance

H

owever even light aircraft are highly complex assets, and securing suitable finance against them can pose unfamiliar challenges.

That said, this complexity - and the relative scarcity of aircraft - provides benefits too. Unlike most cars, which tend to depreciate rapidly because of their abundance, well maintained aircraft can retain their value very well.

Using asset finance to fund the purchase of an aircraft is straightforward in principle; the customer takes out a loan which is secured against the aircraft with a type of mortgage.

As with any form of asset finance, understanding the asset’s true value - and its ability to retain it - is crucial for any lender. While brokers need not be experts in aircraft themselves,

46 | NACFB Magazine

offer clients a degree of flexibility over the pace at which they repay the loan.

For example, at Arkle we allow borrowers to spread the cost of their aircraft over five years - and vary their repayments in line with their seasonal income.

The benefits to brokers Aviation finance is a niche product.

Borrowers are unlikely to be able to secure it without the help of a financial intermediary, and brokers who offer it give themselves a powerful differentiator.

Having such a speciality doesn’t just bring new clients through a broker’s door, the human factor it offers is beneficial too. Whether a client buys an aircraft for private or commercial use, the nature of the asset means they are likely to have a strong bond with it - and by extension, the broker who helped them finance it.

If you are considering offering this sort of finance, research potential lenders thoroughly. It’s essential that you work with lenders who offer suitable products, and have a track record of valuing, understanding and lending against - a range.

Even if your client is a private pilot, the aviation community is close-knit. A job well done can win you invaluable referrals to other pilots, not to mention repeat business from the client themself.

they should ensure they partner with lenders who are; such expertise will improve the client’s chances of being offered finance that’s properly tailored to their needs.

For example, at Arkle Finance, we make prior inspections of all aircraft we lend against - both new and used and rely on general aviation experts to complement our own expertise. We also insist that the aircraft be listed on the UK’s Civil Aviation Register, and that it holds a valid Airworthiness Certificate.

Once the funds are released to the borrower, the client will typically make a pre-agreed number of repayments to the lender, which are usually offered on a fixed-interest basis.

Because of aircraft’s ability to retain their value, some lenders are willing to

NACFB Magazine | 47

Industry | guides Insider tips from the Association’s Patrons and Members

Cleared for take off - a guide to aviation finance The ability to finance aircraft gives brokers an opportunity to spread their wings, broadening their appeal to a wider range of clients.

Daniel Bailey Executive Director Arkle Finance

H

owever even light aircraft are highly complex assets, and securing suitable finance against them can pose unfamiliar challenges.

That said, this complexity - and the relative scarcity of aircraft - provides benefits too. Unlike most cars, which tend to depreciate rapidly because of their abundance, well maintained aircraft can retain their value very well.

Using asset finance to fund the purchase of an aircraft is straightforward in principle; the customer takes out a loan which is secured against the aircraft with a type of mortgage.

As with any form of asset finance, understanding the asset’s true value - and its ability to retain it - is crucial for any lender. While brokers need not be experts in aircraft themselves,

46 | NACFB Magazine

offer clients a degree of flexibility over the pace at which they repay the loan.

For example, at Arkle we allow borrowers to spread the cost of their aircraft over five years - and vary their repayments in line with their seasonal income.

The benefits to brokers Aviation finance is a niche product.

Borrowers are unlikely to be able to secure it without the help of a financial intermediary, and brokers who offer it give themselves a powerful differentiator.

Having such a speciality doesn’t just bring new clients through a broker’s door, the human factor it offers is beneficial too. Whether a client buys an aircraft for private or commercial use, the nature of the asset means they are likely to have a strong bond with it - and by extension, the broker who helped them finance it.

If you are considering offering this sort of finance, research potential lenders thoroughly. It’s essential that you work with lenders who offer suitable products, and have a track record of valuing, understanding and lending against - a range.

Even if your client is a private pilot, the aviation community is close-knit. A job well done can win you invaluable referrals to other pilots, not to mention repeat business from the client themself.

they should ensure they partner with lenders who are; such expertise will improve the client’s chances of being offered finance that’s properly tailored to their needs.

For example, at Arkle Finance, we make prior inspections of all aircraft we lend against - both new and used and rely on general aviation experts to complement our own expertise. We also insist that the aircraft be listed on the UK’s Civil Aviation Register, and that it holds a valid Airworthiness Certificate.

Once the funds are released to the borrower, the client will typically make a pre-agreed number of repayments to the lender, which are usually offered on a fixed-interest basis.

Because of aircraft’s ability to retain their value, some lenders are willing to

NACFB Magazine | 47

GUIDES

GUIDES

A successful relationship is the sum of its parts

Creating trust

Pure Commercial breaks down the various elements that contribute to a healthy, successful working relationship between brokers and clients, helping you navigate the various aspects of the transaction and, ultimately, the partnership.

Ben Lloyd Manager Director Pure Commercial Finance Creating trust Communication plays a vital element in every aspect of our business.

Getting this wrong can, at best, cause frustration and delays for the client and, at worst, cost the client and the business money.

The client may lose their faith in the business, ultimately damaging the relationship beyond repair.

Clients want to know they’re working with a reliable and trustworthy company. More clients than ever are telling us they chose to work with us based on our transparency and service delivery, not just cost and value for money. Being open and honest can create a stronger and more profitable client relationship.

Being clear on fees One area in particular where transparency is critical is fees. On occasion, fees may change depending on how the enquiry progresses, but agreeing our standard fee structure early in the process goes some way to preventing misunderstandings.

Clients should always understand what they are paying for. We make it clear from the outset exactly what the client can expect from us and any potential areas that fall outside of our scope. This should help the client to identify any gaps in the professional services they require.

48 | NACFB Magazine

The fine print Terms and conditions must be easy to digest. It’s common knowledge that the vast majority of clients don’t take the time to read the T&Cs. The most important information is often hard for the client to identify, meaning they generally disengage with the details provided. Considering the volume of information provided to the client throughout the sales process, this doesn’t really come as much of a surprise. While you’re never going to convince every client to go through your terms and conditions with a fine-tooth comb, it is worth revisiting this document regularly to remove any outdated or irrelevant information that, over time, has resulted in the document growing from four pages to 12 pages with an appendix. It should be easy for a client to refer to these documents in the future and quickly find the information they require to resolve their query.

Understanding and adapting to your client Every client and their funding requirements are unique; regardless of how long you’ve been in the industry, you’ll always come up against something completely new and exciting. A strong initial factfind really helps us fully understand what the client is looking to achieve.

Of course, clients aren’t always completely clear on what they need or want so we’ll always summarise what we believe the client is looking for and share our proposals to make sure we’re on the right track before we invest a lot of time and effort heading in the wrong direction entirely.

Agility is so important for our clients, we have to be prepared to respond to their shifting needs at a moment’s notice. We keep in regular contact with the client throughout their application. In our opinion, the more conversations we can have with our clients the better; this allows us to have a stronger understanding of their expectations and requirements. This also keeps us on the front foot and ready to react to changes to the project, timescales and client’s finances.

Streamlining communication We keep ourselves accessible to our clients; they need to know how and when to contact us. Our clients are busy people who don’t appreciate being kept on hold or being transferred around the office just to get a quick response to a critical question. It seems obvious, but we’ve found that our clients really appreciate a smooth handover during any periods where their main contact is out of the office. It can come as an unwelcome surprise to the client if they call in for an update at a key point in their project, only to be told that their case handler is away for two weeks. A quick call to introduce our client to the person who will be taking care of them in the interim helps us remove any unnecessary panic or stress.

Realising that tech has its place Communication should be enhanced by technology, but quality must never be compromised. A lot of our clients like to communicate with us through email, or text message, which really

Embracing reviews

Understanding and adapting to your client Being clear on fees

Streamlining communication

The fine print Realising that tech has its place

Always being one step ahead

helps to remove barriers and allows for those vital exchanges. However, we’re mindful that regardless of the channel of contact our client chooses, our communications must always be clear, taking the time to explain any terminology and industry jargon that the client may be unfamiliar with.

Always being one step ahead If things go wrong, we work even harder. Most clients understand that change happens; a down valuation, changes to lending criteria, lastminute underwriting requirements etc. What they really dislike are nasty

surprises. When issues arise on either side it’s easy for people to ignore them and hope they’ll go away. Human error, third-party delays etc are inevitably going to happen and this is when great communication and understanding is paramount. Some problems can be resolved as quickly as they arise, and the client is blissfully unaware that there were any issues at all. For those occasions when the client really does need to know that there is a problem, they should be told as early as possible, this alleviates lastminute pressure and gives you time to work on a contingency plan together.

In our view, we’re not just working for the client, we’re working with them.

Embracing reviews We listen to client feedback whether it is positive or negative, prompted or unprompted. It’s always worth asking the client for feedback on how well we’ve communicated throughout the whole process. Did they feel well informed, were we proactive enough?

Were our messages clear? After all, who knows how well you’ve engaged a client if not the client themselves?

NACFB Magazine | 49

GUIDES

GUIDES

A successful relationship is the sum of its parts

Creating trust

Pure Commercial breaks down the various elements that contribute to a healthy, successful working relationship between brokers and clients, helping you navigate the various aspects of the transaction and, ultimately, the partnership.

Ben Lloyd Manager Director Pure Commercial Finance Creating trust Communication plays a vital element in every aspect of our business.

Getting this wrong can, at best, cause frustration and delays for the client and, at worst, cost the client and the business money.

The client may lose their faith in the business, ultimately damaging the relationship beyond repair.

Clients want to know they’re working with a reliable and trustworthy company. More clients than ever are telling us they chose to work with us based on our transparency and service delivery, not just cost and value for money. Being open and honest can create a stronger and more profitable client relationship.

Being clear on fees One area in particular where transparency is critical is fees. On occasion, fees may change depending on how the enquiry progresses, but agreeing our standard fee structure early in the process goes some way to preventing misunderstandings.

Clients should always understand what they are paying for. We make it clear from the outset exactly what the client can expect from us and any potential areas that fall outside of our scope. This should help the client to identify any gaps in the professional services they require.

48 | NACFB Magazine

The fine print Terms and conditions must be easy to digest. It’s common knowledge that the vast majority of clients don’t take the time to read the T&Cs. The most important information is often hard for the client to identify, meaning they generally disengage with the details provided. Considering the volume of information provided to the client throughout the sales process, this doesn’t really come as much of a surprise. While you’re never going to convince every client to go through your terms and conditions with a fine-tooth comb, it is worth revisiting this document regularly to remove any outdated or irrelevant information that, over time, has resulted in the document growing from four pages to 12 pages with an appendix. It should be easy for a client to refer to these documents in the future and quickly find the information they require to resolve their query.

Understanding and adapting to your client Every client and their funding requirements are unique; regardless of how long you’ve been in the industry, you’ll always come up against something completely new and exciting. A strong initial factfind really helps us fully understand what the client is looking to achieve.

Of course, clients aren’t always completely clear on what they need or want so we’ll always summarise what we believe the client is looking for and share our proposals to make sure we’re on the right track before we invest a lot of time and effort heading in the wrong direction entirely.

Agility is so important for our clients, we have to be prepared to respond to their shifting needs at a moment’s notice. We keep in regular contact with the client throughout their application. In our opinion, the more conversations we can have with our clients the better; this allows us to have a stronger understanding of their expectations and requirements. This also keeps us on the front foot and ready to react to changes to the project, timescales and client’s finances.

Streamlining communication We keep ourselves accessible to our clients; they need to know how and when to contact us. Our clients are busy people who don’t appreciate being kept on hold or being transferred around the office just to get a quick response to a critical question. It seems obvious, but we’ve found that our clients really appreciate a smooth handover during any periods where their main contact is out of the office. It can come as an unwelcome surprise to the client if they call in for an update at a key point in their project, only to be told that their case handler is away for two weeks. A quick call to introduce our client to the person who will be taking care of them in the interim helps us remove any unnecessary panic or stress.

Realising that tech has its place Communication should be enhanced by technology, but quality must never be compromised. A lot of our clients like to communicate with us through email, or text message, which really

Embracing reviews

Understanding and adapting to your client Being clear on fees

Streamlining communication

The fine print Realising that tech has its place

Always being one step ahead

helps to remove barriers and allows for those vital exchanges. However, we’re mindful that regardless of the channel of contact our client chooses, our communications must always be clear, taking the time to explain any terminology and industry jargon that the client may be unfamiliar with.

Always being one step ahead If things go wrong, we work even harder. Most clients understand that change happens; a down valuation, changes to lending criteria, lastminute underwriting requirements etc. What they really dislike are nasty

surprises. When issues arise on either side it’s easy for people to ignore them and hope they’ll go away. Human error, third-party delays etc are inevitably going to happen and this is when great communication and understanding is paramount. Some problems can be resolved as quickly as they arise, and the client is blissfully unaware that there were any issues at all. For those occasions when the client really does need to know that there is a problem, they should be told as early as possible, this alleviates lastminute pressure and gives you time to work on a contingency plan together.

In our view, we’re not just working for the client, we’re working with them.

Embracing reviews We listen to client feedback whether it is positive or negative, prompted or unprompted. It’s always worth asking the client for feedback on how well we’ve communicated throughout the whole process. Did they feel well informed, were we proactive enough?

Were our messages clear? After all, who knows how well you’ve engaged a client if not the client themselves?

NACFB Magazine | 49

Opinion | & commentary Thought leadership from our Patrons and Members

Brokers can get involved with property auction finance decision making there are plenty of options for clients to secure the funding they need.

Paul Day Director of sales and development Clever Lending

In many circumstances, preparation before buying is key. The financing options can also be looked at prior to the auction, so the client can bid with confidence on the day and know – that up to a certain amount for a specific property – funds will be made available.

T

he property auction market used to be seen as only offering repossession or problem properties.

Now, it’s a much more dynamic environment that provides a quick and easy way of buying or selling a wide range of investment assets.

With limited housing stock on the market, but a continued demand for housing, buyers at auction are looking to purchase directly for a range of purposes: to buy their own house, acquire a buy-to-let or are looking for a business opportunity.

Brokers can usually assist in all or some of these finance requirements and a specialist distributor can help with sourcing products or getting a complicated case over the line.

It’s true that there are still properties sold that need some renovation, but these can be picked up for a good price by the astute developer or landlord, or those that are experienced to see the possibilities in a property based on its potential yield and sale or rental value in the local market.

Investors needn’t just look at residential buy-to-lets and HMOs. Other property types come to market such as office buildings, retail units, semi-commercial properties and fully commercial premises.

However, it’s often possible to convert commercial property with a view to changing its use. This can usually be done when the new use will be in the same class, but if a client is going to propose a complete change of use, then if there any uncertainties it’s always best to get planning advice before committing to buy. For example, when converting offices to flats or large residential houses to care homes or nurseries.

50 | NACFB Magazine

When it comes to well-located retail units, there’s also the option to convert the rooms above to living accommodation and by putting in a separate entrance, the landlord can realise two income streams from one property.

Clearly commercial development properties have potential, but some building works are often required to maximise the benefit.

There are also often parcels of development land at many auctions, making them a good way of getting hold of much sought-after plots for property or commercial development projects.

Finance for buying at auction isn’t usually possible with traditional lenders.

The timescales can be short – between 14 and 28 days for full payment – and the poor state of repair of a particular property might rule out standard forms of finance, and if the proposal is to develop a commercial business, then this may also take time to present the business plan and show it’s a viable proposition.

But, there are numerous lenders operating in this space and many bridging products available to auction buyers, with lenders geared up to be able to deliver the funding in the timeframe required. Cases are looked at individually and assessed on their viability and with this coupled to fast

As with standard residential mortgages, brokers should be encouraged to seek assistance in sourcing the most suitable finance option for each customer and property profile they are looking to source funds for.

With more landlords buying under a limited company, they are also more likely to be repeat purchasers with long-term investment strategies, and brokers can benefit from ongoing relationships and more regular funding requirements.

Brokers are well placed to discuss the benefits and possible pitfalls of buying properties at auctions with clients. By working closely with buyers, sellers and developers who are active in the market, this could lead to an increase in their income across the residential, commercial and buy-to-let lending, while increasing the number of longterm clients securing future income.

Fast & flexible funding for your clients from Just Cashflow...

Fast, flexible funding solutions from £10k to £2m Simple application process

Range of solutions to meet differing client needs

Only pay interest on the amount drawn down

A strong underwriting team and broker relations team to support you and your clients needs

Just call us now

0121 418 5037 Alternatively, find out more

justcashflow.com/partner Patron Member FS668057

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB under Company number 08508165 © Just Cash Flow PLC 2018

Opinion | & commentary Thought leadership from our Patrons and Members

Brokers can get involved with property auction finance decision making there are plenty of options for clients to secure the funding they need.

Paul Day Director of sales and development Clever Lending

In many circumstances, preparation before buying is key. The financing options can also be looked at prior to the auction, so the client can bid with confidence on the day and know – that up to a certain amount for a specific property – funds will be made available.

T

he property auction market used to be seen as only offering repossession or problem properties.

Now, it’s a much more dynamic environment that provides a quick and easy way of buying or selling a wide range of investment assets.

With limited housing stock on the market, but a continued demand for housing, buyers at auction are looking to purchase directly for a range of purposes: to buy their own house, acquire a buy-to-let or are looking for a business opportunity.

Brokers can usually assist in all or some of these finance requirements and a specialist distributor can help with sourcing products or getting a complicated case over the line.

It’s true that there are still properties sold that need some renovation, but these can be picked up for a good price by the astute developer or landlord, or those that are experienced to see the possibilities in a property based on its potential yield and sale or rental value in the local market.

Investors needn’t just look at residential buy-to-lets and HMOs. Other property types come to market such as office buildings, retail units, semi-commercial properties and fully commercial premises.

However, it’s often possible to convert commercial property with a view to changing its use. This can usually be done when the new use will be in the same class, but if a client is going to propose a complete change of use, then if there any uncertainties it’s always best to get planning advice before committing to buy. For example, when converting offices to flats or large residential houses to care homes or nurseries.

50 | NACFB Magazine

When it comes to well-located retail units, there’s also the option to convert the rooms above to living accommodation and by putting in a separate entrance, the landlord can realise two income streams from one property.

Clearly commercial development properties have potential, but some building works are often required to maximise the benefit.

There are also often parcels of development land at many auctions, making them a good way of getting hold of much sought-after plots for property or commercial development projects.

Finance for buying at auction isn’t usually possible with traditional lenders.

The timescales can be short – between 14 and 28 days for full payment – and the poor state of repair of a particular property might rule out standard forms of finance, and if the proposal is to develop a commercial business, then this may also take time to present the business plan and show it’s a viable proposition.

But, there are numerous lenders operating in this space and many bridging products available to auction buyers, with lenders geared up to be able to deliver the funding in the timeframe required. Cases are looked at individually and assessed on their viability and with this coupled to fast

As with standard residential mortgages, brokers should be encouraged to seek assistance in sourcing the most suitable finance option for each customer and property profile they are looking to source funds for.

With more landlords buying under a limited company, they are also more likely to be repeat purchasers with long-term investment strategies, and brokers can benefit from ongoing relationships and more regular funding requirements.

Brokers are well placed to discuss the benefits and possible pitfalls of buying properties at auctions with clients. By working closely with buyers, sellers and developers who are active in the market, this could lead to an increase in their income across the residential, commercial and buy-to-let lending, while increasing the number of longterm clients securing future income.

Fast & flexible funding for your clients from Just Cashflow...

Fast, flexible funding solutions from £10k to £2m Simple application process

Range of solutions to meet differing client needs

Only pay interest on the amount drawn down

A strong underwriting team and broker relations team to support you and your clients needs

Just call us now

0121 418 5037 Alternatively, find out more

justcashflow.com/partner Patron Member FS668057

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB under Company number 08508165 © Just Cash Flow PLC 2018

OPINION & COMMENTARY

OPINION & COMMENTARY

E

very industry seems to be in the midst of its own transparency revolution, and commercial finance is certainly no exception. Brokers are now increasingly pushing for transparency in order to deliver a better service to their clients.

How (and why) lenders can bring more transparency to the table

Research confirms that this is a top priority for consumers. Up to 94% of consumers are loyal to a company that provides complete transparency, an astonishingly high figure considering the number of factors that can contribute to customer loyalty. Studies also show that nearly two-thirds of people will pay more for products when a company offers complete transparency. Within the commercial finance market, 25% of brokers consider it to be the most important improvement that lenders can make. Taken together, these statistics make it clear that prioritising transparency as part of an overall company ethos is becoming increasingly necessary.

Within the context of commercial lending, there are obvious places where transparency is key; pricing is often the most salient point for brokers and their clients, in addition to fee structure – but ultimately, the benefit of lender transparency for a broker is that it affords a level of predictability which mitigates unwelcome surprises and improves efficiency. There are four key areas in which lenders can work with brokers in service of this goal:

Faith Syliva Business development manager The Route

52 | NACFB Magazine

1. Being honest and realistic. Lenders have a tendency to make sweeping claims using vague phrases to attract brokers to their product.

Generally, these criteria are met only in a small percentage of deals or in ‘best-case scenarios’, which can be confusing or misleading for brokers.

2. Being clear about red lines and deal breakers. All too often, loans fall through at the last minute for reasons that the lender can avoid by providing clarity on the deal’s breaking point. It helps to let brokers know at the outset what has the potential to jeopardise a deal, whether it be through confirming the lowest workable valuation figure, legal structure and contract formats or long-stop dates.

3. Creating an environment of trust.

Keeping a broker informed is fundamental to creating trust within a long-term relationship that allows both parties to do their jobs efficiently and productively. When brokers know that a lender will pick up the phone as soon as issues arise, talk them through complicated points and explain decisions made throughout the diligence process, they can offer better guidance to their clients. There is also a danger – when information is not readily shared – that the borrower incurs unnecessary costs and delays in the diligence process and during the loan term. The Route – Finance has always delivered on the loans it commits to, having made clear the due diligence requirements. Establishing trust with a broker early on is key to keeping this commitment, as it provides the Route with confidence that the full picture of the deal is provided at the outset.

4. Illuminating the process. Too often, lenders are reactive in explaining what they need to quickly and effectively underwrite a loan. Deals come in different forms and each one has its own idiosyncrasies that can make it challenging to fully standardise due diligence requirements. But it isn’t a difficult exercise to set out the items

that are always required to underwrite different asset classes. To help brokers communicate these requirements effectively, lenders can go one step further and explain why the information is needed, and how it is used to assess the deal and the borrower.

It is one thing to list the ways that we, as lenders, should be more transparent; it’s another to make a change. The Route – Finance provides specialist loans, which means that each deal is considered on a bespoke basis. Technology is often considered the solution to achieving transparency, whether it be through online application forms that produce immediate decisions or APIs that streamline the exchange of information, but where a more personal approach is taken, a different strategy is required.

For example, the Route – Finance has a set of guidance notes for brokers, which is consistently updated to reflect changes in the market and on the private debt platform. An important part of the guide is to clarify the information that the Route – Finance needs to conduct diligence on each type of loan. The newest version of the guide will explain in detail the development loan process, which is inherently complex, clarifying how drawdowns work, what is expected of the borrower and what each party does during the loan term.

Beyond this, the Route – Finance is working to assign only one point of contact over each stage of the lending cycle, so brokers always know who to speak to and how to get answers for their client. Regular updates are key, and nothing can replace picking up the phone to keep the broker informed and the dialogue open.

NACFB Magazine | 53

OPINION & COMMENTARY

OPINION & COMMENTARY

E

very industry seems to be in the midst of its own transparency revolution, and commercial finance is certainly no exception. Brokers are now increasingly pushing for transparency in order to deliver a better service to their clients.

How (and why) lenders can bring more transparency to the table

Research confirms that this is a top priority for consumers. Up to 94% of consumers are loyal to a company that provides complete transparency, an astonishingly high figure considering the number of factors that can contribute to customer loyalty. Studies also show that nearly two-thirds of people will pay more for products when a company offers complete transparency. Within the commercial finance market, 25% of brokers consider it to be the most important improvement that lenders can make. Taken together, these statistics make it clear that prioritising transparency as part of an overall company ethos is becoming increasingly necessary.

Within the context of commercial lending, there are obvious places where transparency is key; pricing is often the most salient point for brokers and their clients, in addition to fee structure – but ultimately, the benefit of lender transparency for a broker is that it affords a level of predictability which mitigates unwelcome surprises and improves efficiency. There are four key areas in which lenders can work with brokers in service of this goal:

Faith Syliva Business development manager The Route

52 | NACFB Magazine

1. Being honest and realistic. Lenders have a tendency to make sweeping claims using vague phrases to attract brokers to their product.

Generally, these criteria are met only in a small percentage of deals or in ‘best-case scenarios’, which can be confusing or misleading for brokers.

2. Being clear about red lines and deal breakers. All too often, loans fall through at the last minute for reasons that the lender can avoid by providing clarity on the deal’s breaking point. It helps to let brokers know at the outset what has the potential to jeopardise a deal, whether it be through confirming the lowest workable valuation figure, legal structure and contract formats or long-stop dates.

3. Creating an environment of trust.

Keeping a broker informed is fundamental to creating trust within a long-term relationship that allows both parties to do their jobs efficiently and productively. When brokers know that a lender will pick up the phone as soon as issues arise, talk them through complicated points and explain decisions made throughout the diligence process, they can offer better guidance to their clients. There is also a danger – when information is not readily shared – that the borrower incurs unnecessary costs and delays in the diligence process and during the loan term. The Route – Finance has always delivered on the loans it commits to, having made clear the due diligence requirements. Establishing trust with a broker early on is key to keeping this commitment, as it provides the Route with confidence that the full picture of the deal is provided at the outset.

4. Illuminating the process. Too often, lenders are reactive in explaining what they need to quickly and effectively underwrite a loan. Deals come in different forms and each one has its own idiosyncrasies that can make it challenging to fully standardise due diligence requirements. But it isn’t a difficult exercise to set out the items

that are always required to underwrite different asset classes. To help brokers communicate these requirements effectively, lenders can go one step further and explain why the information is needed, and how it is used to assess the deal and the borrower.

It is one thing to list the ways that we, as lenders, should be more transparent; it’s another to make a change. The Route – Finance provides specialist loans, which means that each deal is considered on a bespoke basis. Technology is often considered the solution to achieving transparency, whether it be through online application forms that produce immediate decisions or APIs that streamline the exchange of information, but where a more personal approach is taken, a different strategy is required.

For example, the Route – Finance has a set of guidance notes for brokers, which is consistently updated to reflect changes in the market and on the private debt platform. An important part of the guide is to clarify the information that the Route – Finance needs to conduct diligence on each type of loan. The newest version of the guide will explain in detail the development loan process, which is inherently complex, clarifying how drawdowns work, what is expected of the borrower and what each party does during the loan term.

Beyond this, the Route – Finance is working to assign only one point of contact over each stage of the lending cycle, so brokers always know who to speak to and how to get answers for their client. Regular updates are key, and nothing can replace picking up the phone to keep the broker informed and the dialogue open.

NACFB Magazine | 53

OPINION & COMMENTARY

Is it still safe to fund higher risk businesses?

SPECIALIST LENDING SOLUTIONS BRIDGING FINANCE

Richard Doe Managing director of commercial lending Paragon Bank

A

general concern for funders is around more lenders coming into the market and whether this is outstripping demand.

In the asset finance arena alone, FLA statistics show that market growth is slowing down, while more and more lenders are appearing.

With so many new funding options, there is a tendency that they can all look the same and raise the risk of under-pricing for risk. This in turn puts pressure on banks and lenders to be different and stand out from the crowd.

Here at Paragon, we service a broad range of mid-market SME customers with strong credit profiles, but also look at niche areas where our expertise and attention means we can price risk appropriately.

We have also focused on getting credit to where it is most needed as we noticed that some of the most challenged small businesses are underserved, with some resorting to getting help from unscrupulous lenders.

Our near-prime funding aims to ensure that loans are getting to the SMEs that are struggling the most – those at the end of their tether who have often been turned away from high street banks

54 | NACFB Magazine

because they are seen as being at the weaker end of the SME spectrum.

As a specialist lender, we are going out of our way to support those with the most challenged credit and take steps to do this in a suitable, professional manner, as we know that opening the door to the full credit spectrum can be a lifeline for many businesses.

Widening access to funding for the most in need is something that we shouldn’t shy away from, if done in a credible and responsible manner. After all, it can be a lifeline for many and our invoice financing team have seen companies preserved from insolvency thanks to packages that also provided small firms with debt protection.

Our specialist staff create tailored tier 3 funding and give added support to businesses by managing their portfolios carefully while continuing to engage

with the customers on a regular basis.

Designing suitable products and ensuring customers are treated fairly also plays a key part in our approach.

In this way, tailored lending for borrowers who have a low credit score or who may also have adverse credit information doesn’t have to be something that lenders avoid.

Whether it’s to help them refinance assets, buy new ones, use a loan for debt restructuring or help their business get off the ground with new start finance, there are ways that regulated lenders can offer a much-needed shoulder of support.

Available for standard and light refurbishment Automated valuations and Joint Legal Representation for faster completions Dedicated underwriter from DIP to completion Available through all distribution channels

Contact your local BDM 0800 116 4385 precisemortgages.co.uk

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498).

Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01848 (3)

With all this in mind, financial organisations may be wondering if increased regulation and market pricing mean that it is still safe to fund higher-risk businesses and my answer to that would be a definite “yes” - if you take the right approach.

Our lowest Bridging Finance range from only 0.49%pm

Get in touch

Against this background of change, we are also seeing the influence of more regulation, increasing concerns over the price-risk relationship, and an FCA with more bite that is fighting unscrupulous practices.

OPINION & COMMENTARY

Is it still safe to fund higher risk businesses?

SPECIALIST LENDING SOLUTIONS BRIDGING FINANCE

Richard Doe Managing director of commercial lending Paragon Bank

A

general concern for funders is around more lenders coming into the market and whether this is outstripping demand.

In the asset finance arena alone, FLA statistics show that market growth is slowing down, while more and more lenders are appearing.

With so many new funding options, there is a tendency that they can all look the same and raise the risk of under-pricing for risk. This in turn puts pressure on banks and lenders to be different and stand out from the crowd.

Here at Paragon, we service a broad range of mid-market SME customers with strong credit profiles, but also look at niche areas where our expertise and attention means we can price risk appropriately.

We have also focused on getting credit to where it is most needed as we noticed that some of the most challenged small businesses are underserved, with some resorting to getting help from unscrupulous lenders.

Our near-prime funding aims to ensure that loans are getting to the SMEs that are struggling the most – those at the end of their tether who have often been turned away from high street banks

54 | NACFB Magazine

because they are seen as being at the weaker end of the SME spectrum.

As a specialist lender, we are going out of our way to support those with the most challenged credit and take steps to do this in a suitable, professional manner, as we know that opening the door to the full credit spectrum can be a lifeline for many businesses.

Widening access to funding for the most in need is something that we shouldn’t shy away from, if done in a credible and responsible manner. After all, it can be a lifeline for many and our invoice financing team have seen companies preserved from insolvency thanks to packages that also provided small firms with debt protection.

Our specialist staff create tailored tier 3 funding and give added support to businesses by managing their portfolios carefully while continuing to engage

with the customers on a regular basis.

Designing suitable products and ensuring customers are treated fairly also plays a key part in our approach.

In this way, tailored lending for borrowers who have a low credit score or who may also have adverse credit information doesn’t have to be something that lenders avoid.

Whether it’s to help them refinance assets, buy new ones, use a loan for debt restructuring or help their business get off the ground with new start finance, there are ways that regulated lenders can offer a much-needed shoulder of support.

Available for standard and light refurbishment Automated valuations and Joint Legal Representation for faster completions Dedicated underwriter from DIP to completion Available through all distribution channels

Contact your local BDM 0800 116 4385 precisemortgages.co.uk

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498).

Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01848 (3)

With all this in mind, financial organisations may be wondering if increased regulation and market pricing mean that it is still safe to fund higher-risk businesses and my answer to that would be a definite “yes” - if you take the right approach.

Our lowest Bridging Finance range from only 0.49%pm

Get in touch

Against this background of change, we are also seeing the influence of more regulation, increasing concerns over the price-risk relationship, and an FCA with more bite that is fighting unscrupulous practices.

our book stays open

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