Commercial Broker (NACFB Magazine) May 2019

Issue 70 MAY 2019

Broker COMMERCIAL

The magazine for the National Association of Commercial Finance Brokers

16 PERSONAL GUARANTEE INSURANCE Mitigating risk for your business borrower clients

34 DIVERSIFY YOUR OFFERING Increasing client retention whilst boosting your brand

Staying positive Ways to maintain your clients’ happiness

42 MORE RESPONSIBLE FINANCE Unlocking value through supporting diverse entrepreneurs

44 WHEELS WITHIN WHEELS Broker reaction to the FCA’s Motor Finance report

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

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

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.

Contents

In this May issue NACFB News

Special Features

4 6 8 10-11 12-14

26-27

Note from Graham Toy Updates from the Association Lloyds: Business Barometer Industry news round-up Patron news

28-29 30-32

34-35

36-37 38-39

Funding Circle: A thriving economy Arkle: Block financing NACFB: Your guide to happier clients Fleximize: Broker diversification Spotcap: Being less antisocial OSB: Reasons to be cheerful

Industry Insight 40-41 42-43

BBB: Beyond timidity Responsible Finance:

Supporting diverse entrepreneurs

Opinion & Commentary

28 Case Studies 16

Purbeck: Personal Guarantee Insurance 18 Kingsway: Asset finance solutions

44-45

46 48-49

50 52 54

GHA Finance: Wheels within wheels Esme: Artificial intelligence BFS: Development finance journey Avamore: De-risking era Listicle: Staying positive Five minutes with: Damien Druce, Director of Intermediaries – Assetz Capital

Patron Profile 20-21

KIERAN JONES Communications Manager & Editor

33 Eastcheap | London | EC3M 1DT Kieran.Jones@nacfb.org.uk LAURA MILLS Magazine Production Assistant

Barclays: The personal touch RUTH DUNN Magazine Advertising T 0845 0043169

Magazine@nacfb.org.uk

22-23 The ethical approach

MACKMAN Design & Production T 01787 388038

Ask the Expert

Further Information

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

Compliance Update

24

34

Julian Rose: Motor Finance report

38

mackman.co.uk

NACFB | 3

Welcome

Graham's Note

W

elcome to the May edition of our magazine.

We are now well into the year and I hope you are finding articles that help you run your business.

In this edition we have broadened the content to reach some of the softer skills that we all need to run our businesses as best we can.

Graham Toy CEO | NACFB

As the first quarter is now behind us, I am sure that you will be dissecting your KPIs and critiquing how the data contributes to your plans for the year, but how much of this data focusses on the elements of your business that are less easy to measure but are critical to success. For the most part these relate to your people, your behaviours and culture. Even if it isn’t easy to calibrate, these measures are significant enablers and shouldn’t have a lower priority than the hard performance numbers, because ultimately, without an engaged and motivated workforce, much of what we all value in our businesses simply wouldn’t happen.

So, in the following pages we have had a closer look at the power of good communication, the importance of transparency in how we manage and lead as well as how we can all contribute to the development of our people.

We build on this by sharing a few insights from an excellent recent piece of work jointly published by UK Finance and Linklaters which poses some challenging and searching questions around ethics in banking and finance.

Finally, next month sees us return to Birmingham’s NEC on Wednesday 19th June. The free event is open to anyone with an interest in commercial finance and 2019’s event will host a wider spread of exhibitors than ever before – with more than 120 already confirmed to exhibit. We look forward to seeing you there.

4 | NACFB

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NACFB News

Association updates for May 2019

NACFB news round-up June’s #CFE2019 set to be biggest ever

Limited early bird Gala Dinner tickets remain

Wednesday 19th June sees the NACFB Commercial Finance Expo returning to Hall 3A at Birmingham’s NEC for the tenth time, and with over 120 confirmed exhibitors, we are on course to stage the biggest event in the Association’s history.

The NACFB Gala Dinner and Awards Ceremony returns to the Park Plaza Westminster on Thursday 28th November 2019.

A limited number of early bird tickets are still available to purchase at last year’s price and will be until the end of June.

As well as a place to do business, the NACFB Commercial Finance Expo is a place to join the debate held in the event’s conference arena. This year’s panel sessions are guaranteed to feature lively exchanges and will seek to present a variety of differing viewpoints on the issues impacting our lending community.

The dinner is one of the most prestigious events in the UK commercial finance calendar, with over 750 of the best and brightest from the lending community expected to attend on the night.

Speaking at last year’s Expo, Andy Bishop of headline sponsor Lloyds Bank, reminded brokers of the importance of the event in helping to fund UK business; adding that the CFE compounds the “…synergies between the NACFB’s mission and Lloyds’ own Help Britain Prosper campaign.”

The NACFB Awards Ceremony provides an annual opportunity for the Association’s brokers to recognise Patron lenders. This year we’re revising the format so that lender Patrons will be asked to submit an award submission form, from which a shortlist will be compiled by a broker panel. This shortlist will then be voted on by the Association’s membership.

Our Meet the Expert sessions will focus on key issues within each of the main commercial finance sectors and will be hosted by representatives from the Association’s 2019 support sponsors: Together, Precise Mortgages, Barclays, Aldermore, Hitachi Capital, Spotcap and Hitachi Asset Finance.

Don’t forget, you can view a detailed version of the agenda, profiles of the panellists and submit questions 48-hours prior to the conference via the ‘CFE 2019’ app which can be downloaded via the Expo website, Apple App or Google Play stores.

Each session consists of 20-minute presentations from industry experts within the Commercial Mortgages, Asset, Buy-to-let, Development, Cashflow, Invoicing & Factoring Bridging/Short-term and Unsecured sectors.

Further information For further information, including the day’s full agenda and conference timings, and to register your attendance, please visit our event website: commercialfinanceexpo.co.uk 6 | NACFB

The event, which in 2019 will be sponsored by Lloyds Bank, provides an annual forum for the UK’s most highly regarded lenders and dynamic brokers to engage socially and celebrate the successes of their collaboration. Be sure to secure your place today as the event is on course to sell out in record time.

Pricing Early bird tickets (until Friday 28th June) £310 +VAT per person £3100 +VAT for a table of ten

Standard tickets (from Monday 1st July) £325 +VAT per person £3250 +VAT for a table of ten To book, please email admin@nacfb.org.uk

COMMERCIAL FINANCE

expo

Wednesday 19th June 2019 Hall 3a, The NEC 9.30am – 4.30pm

Register your attendance today

commercialfinanceexpo.co.uk 2019 SPONSORS

#CFE2019

Note from our Sponsor

How the Lloyds Bank Business Barometer can help give your clients a reassuring steer

Andy Bishop National Director of Business Development SME Banking Lloyds Bank

A

s a broker, you need to keep on top of business trends and optimism levels within UK industry – perhaps now more than ever. Our products and tools are designed to help you give your clients confidence in their approach to the current economic times.

One way in which we support brokers is with the Lloyds Bank Business Barometer. Running since 2002, the Barometer is a monthly snapshot of 1,200 companies across all regions of the UK. Industries surveyed include manufacturing, transport, retail, financial, education, healthcare, property and business services. We include companies of all sizes and turnovers – so you can be sure you are getting the broad picture.

To compile the Business Barometer, we ask firms for their current views on prospects and trading, confidence in the economy, future staffing plans and any concerns or opportunities they may have identified around Brexit.

In March, the Business Barometer showed overall business confidence increased by six points to 10%, but remains below the long-term average of 24%. Overall, 21% of firms (unchanged from February) said that leaving the EU will have a positive impact on their business activity, while 38% (down from 39% in February) thought it would have a negative impact.

8 | NACFB

Additional questions around business preparedness for the UK’s departure from the EU revealed that when it comes to their own business models, a majority of firms believe they are suitably prepared. 62% believe their working capital arrangements will allow them to withstand any additional pressures from leaving the EU. However, UK-EU negotiations clearly continue to affect business investment decisions. 20% said they are holding back from refinancing debt due to uncertainty, while 28% believe they will look to invest once more certainty is provided.

We have a range of resources available to you and your clients including business guides, up-to-date economic insight, Brexit FAQs and information on trading internationally. You can find out more at resources.lloydsbank.com

More economic and market insights from Lloyds Bank available at resources.lloydsbank.com: Monitor: Markets Stay up-to-date with the economy and what to look out for in interest rates, FX and commodity markets.

The Week With... Bite-sized views and opinions, discussing important market themes and the week ahead.

Gala

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

November

28

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

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

Industry News

Industry News 3. Profit growth shrinks at mid-sized firms

1

Profits among UK mid-sized companies grew by 4% last year, down from 19% in 2017, according to research by BDO. The 4% growth recorded in 2018 was outstripped by 37% profit growth among Spain’s mid-sized companies, as well as the 30% seen in Germany and 24% in Italy.

1. Invoice finance returns to growth in H2 2018

7. Scammers steal £1.2bn from British bank customers

2. Scottish start-up loans top £26m

2 10 | NACFB

5. Hammond cracks down on late payment Philip Hammond is to force big companies to reveal how long they take to pay small suppliers as part of a crackdown on late payments. The Chancellor said audit committees will be required to review payment practices and report on them in their annual accounts, with a nonexecutive director given responsibility for reporting on how quickly suppliers were being paid.

Invoice finance and asset-based lending returned to growth in 2018, according to analytics software provider Equiniti Riskfactor. After two consecutive quarterly declines in the first half of 2018, total advances at the end of December 2018 totalled £22.7 billion, up over £100 million on the previous quarter and up 2.4% on the previous year.

New data from the British Business Bank (BBB) reveals total lending to Scottish microbusinesses through its start-up scheme has now topped £26 million. Figures published by the BBB show that its start-up loans programme has issued more than 3,500 loans to Scottish entrepreneurs, at an average of £7,200 each, since its launch in June 2012.

5

4

Figures from UK Finance show criminals fraudulently stole a total of £1.2 billion from UK bank customers in 2018 – up almost a quarter on 2017, when £968 million was stolen. The amount stolen in authorised push payment (APP) scams rose to £354 million, although financial providers were able to return a total of £83 million of these losses.

4. PayPal looks to expand SME finance

6. Growth of small firms held back by political turmoil

PayPal has lent £1 billion to more than 37,000 SMEs in the UK since launching its Working Capital division in 2014 and the firm is now looking at expanding its suite of loans to help small businesses get the growth finance they need. The total amount advanced to SMEs increased by 60% or £375 million last year.

According to the latest SME Finance Monitor from research agency BVA BDRC only 4% of firms surveyed had applied for new finance in 2018. The survey of almost 4,500 SMEs found that 24% of firms now see political uncertainty as a major barrier to their business going forward, up from 15% a year ago.

8. SME Alliance gives backing to Dispute Resolution Scheme

10. Europe’s leasing market grew 32.7% in 2017

The SME Alliance has accepted an invitation to join the steering group to deliver the Dispute Resolution Scheme (DRS). The DRS was formed in response to the Walker Report on SME banking disputes, which recommended that the banks revisit and settle legacy cases.

White Clarke Group has published its 13th Global Leasing Report, showing a 32.7% growth in leasing in Europe for 2017, expanding its share of the global leasing market by 1.9%. North America’s share of the global market has declined by 3.1% due to the rapid growth of other leasing markets.

The UK asset finance market grew for the seventh consecutive year, rising 5%.

9. Calls for Bank of England to modernise A report from the Public Accounts Committee (PAC) has warned that the Bank of England must modernise its outdated way of working, slash costs and overhaul its compliance or risk damaging its credibility. The PAC said that the Bank has acknowledged it needs to improve its operations and lacks a clear vision of the changes needed to drive the widespread overhaul needed.

9

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NACFB | 11

Patron News

Barclays backs SMEs through Brexit with £14bn lending fund Patron launches fund to support UK enterprises through ongoing uncertainty

B

arclays has announced a £14 billion lending fund as part of a series of initiatives to help UK SMEs to succeed and flourish through Brexit and beyond.

Focussed on building SME resilience during uncertain times, the NACFB Patron has unveiled a £14 billion package of support that includes a dedicated lending fund for the businesses that are the lifeblood of the UK economy; with a turnover of £0-£25 million. The package also outlines plans for more than 100 SME Brexit clinics and seminars being run in local communities across the country and establishes a network of on-the-ground relationship management experts and industry specialists.

The interventions are designed to help SMEs think about managing cashflow and working capital, exporting goods abroad, labour, supply chain management, and broader issues of preparedness.

Launching the fund, Group CEO Jes Staley, said: “Barclays stands ready to help local businesses in towns, cities and rural communities, up and down the country, during this period of uncertainty. The £14 billion fund, along with our broader package of support, shows our commitment to the local businesses that are the backbone of the UK economy – we are here to help them plan for the future and invest for growth.

“It is the entrepreneurs, the farmers, the manufacturers, the house-builders, the new tech firms, and countless other businesses, that will help the country deal with – and capitalise on – this period of change. Barclays is here to help SMEs to do exactly that.”

12 | NACFB

Glynn Richards of AEG Teachwall Limited, a Merseyside-based SME that imports aluminium and specialist engineering parts from China also commented on the news. Glynn said: “Today’s commitment is reassuring for a business like ours. Despite some broader economic uncertainty, we’re keen to invest in new machinery in our main factory to keep on growing our business. With Barclays’ support on this front, I feel that we can invest with confidence, hire more people and hopefully expand across the North West and beyond.”

Bob Long of WSBL Ltd, manufacturers of noise insulation materials for the building and automotive industries, based in Blackburn, shared his reaction: “It’s really important for WSBL to be ready to leverage new opportunities and markets, and as such we welcome this commitment from Barclays. They really understand our business, which provides real confidence for the future.”

“

The interventions are designed to help SMEs think about managing cashflow and working capital, exporting goods abroad, labour, supply chain management, and broader issues of preparedness

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Patron News

Funding Circle bolsters presence in the North and Scotland P2P Patron seeks to build on the £1bn it lent through the broker channel

N

ACFB Patron, Funding Circle, has announced the expansion of its broker team with three notable hires, in order to provide greater support to its introducer network in the North and Scotland.

Mike Morris, formerly of Merchant Bank Close Brothers, joins Funding Circle as regional manager for the North region and Scotland, bringing with him over ten years of experience in commercial finance within asset-based lending and leasing finance. Cameron Ritchie and Nick Newton also join the team as business development managers, further strengthening the Patron’s presence in those regions.

Over his career, Mike helped to grow Close Brothers Retail Finance from a relatively new business to over £100 million in annual sales in just three years. In addition, he supported the creation of a broker channel at Thinksmart, a digital payments provider, to promote asset-based lending.

To date, over £1 billion has been lent through the broker channel at Funding Circle, supporting the growth of more than 9,600 businesses up and down the country.

Mike Morris spoke of his new role, saying: “I’m hugely excited to be joining the team at Funding Circle. The business continues to grow at an incredible rate year after year and our offering to small businesses keeps getting better.

14 | NACFB

“Helping Funding Circle become the first choice that introducers recommend for small business finance is something I’m very passionate about, and I’m looking forward to supporting our valued introducers in the North and Scotland over the coming months.”

Cameron Ritchie, who was recruited from an asset management firm where he worked as an account manager developing strong relationships with Scottish IFA’s, also joins as the Patron’s first business development manager for Scotland. Nick Newton joined Funding Circle as the North East business development manager in December 2018, bringing with him six years of experience in commercial finance.

Tom Shave, head of broker at Funding Circle, said: “Over the past year, we have seen a 50% increase in new broker registrations, demonstrating a growing demand for fast, flexible and fair business loans nationally.

“We recognise the significant role commercial finance brokers play across the country in helping their customers access the finance they require, which is why we remain dedicated to providing them with the best possible service. Bolstering the North is of strategic importance to the growth of Funding Circle’s Broker Team and we look forward to building out our proposition there with these new hires.”

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Case Study

Personal Guarantee protection pays off Claim settled as sunbed salon feels the heat

Todd Davison Director Purbeck Insurance Services

S

ummer 2018 was the joint hottest on record according to the Met Office. During a six-week spell from the end of June to the second week of August, daytime temperatures in parts of the country consistently topped 30°C. Pictures of sunbathers on packed beaches and in parks across the UK became a common feature in news reports as the nation couldn’t believe its luck.

we had invited couldn’t get to us. Perhaps that was an early reminder of how little control we have over weather. Even so, we could never have anticipated such a prolonged spell of sunshine filled days.

“When we started looking into Personal Guarantee backed finance to fund the opening of the salon, we knew the personal risks we would be taking so when we came across Purbeck Personal Guarantee Insurance it made sense to secure the cover as part of the finance deal – as such the premium was paid for by the business. Although we hoped we’d never need it, the cover offered valuable peace of mind that if something did go wrong, there would be limited impact on our personal finances.

But for many businesses, the blessing of weeks of unrelenting sunshine was a curse. For those working in the sunbed business, summer 2018 created very challenging trading conditions with those in the early stages of their life really struggling to keep their business ticking over into the months when trade would pick up again.

“When we alerted Purbeck to the situation, they offered great advice and support but sadly we just couldn’t keep the business afloat.

It was a very stressful time, but it could have been considerably worse if we hadn’t taken Personal Guarantee Insurance. I would seriously recommend it to any director or business owner taking a Personal Guarantee backed loan.”

Sun Kiss Tanning, a sunbed salon, opened in Milton Keynes in March 2018. To support the start-up, the four directors secured Personal Guarantee backed finance amounting to £91,000.

However, fully appreciating the risk taking a Personal Guarantee entails, with the potential loss of personal assets, the directors had the foresight to secure Personal Guarantee Insurance from Purbeck Insurance Services.

Sun Kiss Tanning really demonstrates how circumstances completely beyond a business’ control can have such a negative impact on trade. This is why those firms using Personal Guarantee backed finance should have insurance in place to protect them against the risk of their personal assets being used to settle an outstanding loan.

No business wants to fail but it’s sensible, particularly in these uncertain times to prepare for the worst rather than just hope for the best.

As the long hot summer progressed, the downturn in custom was marked. Despite positive customer reviews and valuable support from Purbeck to help attract custom, the business entered insolvency during September 2018.

However, because the directors had secured Personal Guarantee Insurance, their personal assets were protected. All the outstanding start-up finance was settled by Purbeck Insurance Services in November 2018, in accordance with the policy terms.

Paul Gornall, former director of Sun Kiss Tanning, said: “Ironically we opened on one of the snowiest days of the year so many of those 16 | NACFB

“

It was a very stressful time, but it could have been considerably worse if we hadn’t taken Personal Guarantee Insurance

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Case Study

Providing budding hoteliers with an asset advantage Husband and wife team benefit from broker partnership

Mike Day Sales Manager Kingsway Asset Finance Ltd

O

ur foundations have always been built on solid broker relationships. As we approach our 24th anniversary we pride ourselves on both the continuity of credit decisions and customer service. Whilst we adopt traditional lending values and underwrite every proposal on a case-by-case basis, it is fair to say that we’ve seen pretty much everything over the years.

From catering and refrigeration equipment, shop and office fit-outs, to construction and scaffolding equipment, IT hardware and software, as well as general office equipment – Kingsway has had the soft asset market place well covered.

Our Professions Loan facility is increasingly popular for companies looking to fund, amongst many things, disbursements, partner buyouts or office refurbishments. We have also launched our SME Loan product, available to those customers that don’t require a traditional lease or hire purchase facility.

But it is lease and hire purchase that has been the lifeblood of Kingsway for more than two decades.

Only recently an NACFB broker contacted us regarding a husband and wife team who had embarked upon renovating a hotel, restaurant and spa in Cumbria. The husband had a proven track record of owning a successful business and his wife had a strong background in the leisure industry. Their combined experience made them a very good team.

From the outset the directors invested substantial sums of their own money into the project, but unfortunately a flood hit the hotel badly, resulting in a temporary closure for repair works and flood prevention measures to be installed.

18 | NACFB

During this enforced closure, the directors took the opportunity to implement phase two of the hotel’s development and expand the spa facilities. With the obvious financial impact of the closure noted, the business sought to raise £110,000 to assist with the expansion costs and begin immediate repair works whilst waiting on insurance paperwork.

The broker identified several typical Kingsway asset products: changing room lockers, seating and vanity stations, treatment room equipment, a reception area as well as audio and CCTV equipment.

Due to the sound financials in the year prior to the flood, an excellent proposal from the broker, that included a site visit, and the strength of the personal net worth of the directors we were able to assist with the full amount required on a five-year lease.

As a member of the Praetura Asset Finance Group, Kingsway has access to unlimited funding including the recently finalised £75 million securitisation facility with NatWest. The rated facility will allow the Group to expand its origination capacity enabling growth in our loan book to provide up to £200 million to SMEs across the UK.

“

Due to the sound financials in the year prior to the flood, an excellent proposal from the broker and the strength of the personal net worth of the directors we were able to assist with the full amount required on a five-year lease

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Patron Profile

Valuing personal relationships in a changing market Working with brokers to identify the best possible solution Tony Geary National Head of Business Development Barclays UK

W

ith exceptional year-on-year growth and the value of new term completions through broker introductions more than doubling over the past five years, building strong relationships with brokers and making sure it’s easy for them to do business with us is absolutely critical to Barclays.

Last year, we offered finance to more than 1,800 new clients via brokers, which is testament to our continued investment in the channel since 2014. As a direct result of this we’ve been busy expanding the team, especially in London, the East of England, North of England and Scotland. We now have a national team of 23 business development managers (BDMs), who provide end-to-end case management support for our broker panel.

The ability to provide nationwide coverage is a real asset, but I think what really sets us apart is the ability and knowledge of our BDMs, which helps them understand what brokers are looking for from the bank. In my view, you can’t beat a single point of contact who can open the door to our wider banking network and specialists, while managing each case through to completion and keeping in close contact.

We work with brokers to carefully assess clients’ needs and identify the best possible solution, before selecting a dedicated relationship manager with the right sector expertise and local know-how to tailor a funding solution to meet their needs.

20 | NACFB

On top of this there’s Barclays’ breadth and scale, which means we can support brokers’ clients in pretty much any industry sector – and whatever their lending need. Operating across both our business and corporate banking operations means we’re not limited in the size of deal or type of client we can support. Last year, lending to individual clients ranged from £25,000 to £50 million.

So, what’s new?

I’ve been around long enough to know that client satisfaction equals broker satisfaction, and these days that means recognising that clients’ debt needs are moving from traditional facilities like commercial mortgages to more nuanced requirements. That’s why we’ve extended our teams to include Specialist Finance and Franchising to provide more choice and specialist solutions for our broker panel.

Take our newly formed Specialist Finance team, for example.

It supports business owners who want to grow through acquisition or who want to sell all or part of their business, offering flexible financing structures with repayments based on business cashflow.

Whether it’s SMEs looking to grow or family businesses planning for succession, we help clients to understand the options, and offer guidance on deal structure and appropriate financial due diligence.

Franchising boom The UK’s entrepreneurial spirit has led to a huge rise in the popularity of franchising over the past five to ten years. In fact, the number of franchised units in the UK reached a whopping 48,600 in 2018, up 10% on 2015. Prompted by an increase in approaches to brokers from would-be franchisees, we launched our Specialist Franchising

team in 2018. The team prides itself on industry knowledge, expertise and insights, which adds to the financial support we can provide to franchisees through overdrafts, term loans, bespoke pricing and free banking for 12 months.

We also work with major franchisors such as Vodafone UK to offer bespoke finance packages to their franchisees and expect to see similar partnerships with other core franchisor brands in the near future.

Buy-to-let and beyond We’re really excited to have launched a new proposition aimed at helping property investors who run their rental businesses through a limited company. Buy-to-let for limited companies is aimed at investors who want to invest up to £1 million spread across three properties through a limited company or an LLP. We’re anticipating a high volume of enquiries from brokers about this as minimum lending starts from just £50,000, and we’ll be able to consider company owners’ personal income as well as rental income in the lending decision.

We also expect to see further growth in broker introductions to SMEs and start-ups across a vast array of sectors where there is a strong appetite for growth, such as pharmacies, high street healthcare (dentists/GPs), business services, agriculture and fast-growing businesses, where our High Growth & Entrepreneurs team can give invaluable support.

With the prospect of higher interest rates in the near future, we’re also experiencing increased enquiries from brokers whose clients are looking for longer-term fixed rate loans to give them more certainty over their costs in an uncertain environment.

Technology and the broker-bank relationship We recognise there is a lot of uncertainty within the broker community as technology is changing the way the clients access and secure finance.

However, as the market evolves and choice expands, I see this as an opportunity to embrace change. With increased choice, I believe clients will more than ever want the clarity and guidance that a broker offers.

Over the next 18 months, Barclays is planning a series of digital enhancements that are intended to improve the client journey and broker experience. This will continue to be underpinned by our core strength of one-to-one relationships, built around local knowledge, industry expertise and tailored financial solutions. This is what I believe the broker community values above all, and it is how we’ll continue to excel.

If you would like to discuss a client lending case or would like to become one of our approved brokers, contact one of Barclays’ BDMs by visiting barclays.co.uk/business-banking/brokers

“

I think what really sets us apart is the ability and knowledge of our BDMs, which helps them understand what brokers are looking for from banks

NACFB | 21

Compliance

Driving ethical standards in the finance sector Why good conduct, culture and ethical behaviours should be at the core of sustainable, long-term performance Graham Toy Chief Executive Officer NACFB

O

ccasionally you read a piece of work that is worthy of sharing with colleagues and the recent report produced by UK Finance and Linklaters; Ethics in Banking & Finance, makes for an excellent read. I would not do the report justice by trying to precis the content but the way the report has been constructed throws into relief some thought-provoking and astute observations.

In each section the narrative is followed by some challenging questions and it is these that will make our readers think carefully about either their own business or the business partners or stakeholders with whom they trade.

The report touches upon key aspects of leadership, responsibility and accountability. Senior managers are challenged about how they sponsor and show commitment to initiatives which promote ethical values, responsible business practice and regulatory compliance.

This is supplemented by asking whether there is any difference between the message and actual decisions within the business.

And finally, the report reflects on how leadership teams can embrace different strategies to communicate on ethics and culture effectively.

Looking at the subject through the lens of risk management and control framework the report is equally revealing. How does a firm communicate to staff operating in the first line of defense that it is their responsibility to dispatch their responsibilities in accordance within an ethical code? Also, what barriers might exist to business teams prioritising ethics when it comes to product design and customer service?

Given that people are the engine room of the business it is arguable that the ethics of the enterprise should be hard wired into an 22 | NACFB

organisation at the point of recruitment. Therefore, how does a firm communicate its values and guiding principles so as to attract candidates with a compatible mindset? The answers to this inform how you ensure that your recruitment process is effective in assessing the candidates with a complementary ethical outlook.

Having onboarded a new recruit, the natural tendency is to focus on technical training but how much focus is on the provision of soft skills training? Also, delivering the training is just part of the journey.

How often is the effectiveness of any training measured, if at all?

Staying on the subject of the workforce, how does an organisation seek to build trust with its staff? Does the business enable a 'speakup and listen' environment and do they want to hear and then act on the feedback? Taking a more holistic view, how engaged is the firm in ensuring that employees enjoy an appropriate work-life balance?

When thinking about an embedded approach to ethical principles, how does your operation incorporate or take account of its ethical values and standards in its objective setting, appraisal and promotion processes? How much account is taken from 360-degree feedback on conduct and behaviour and is this factored into appraisals and remuneration decisions? This emphasises both the how and the what when considering achievement.

Viewing ethics through the prism of product design and approval throws up yet more challenges. A question which spans all sectors is whether the product has had sufficient consideration from the perspective of vulnerable customers? Also do longer term products have an appropriate level of built-in flexibility that can adapt to changing circumstances in which customers might find themselves?

Remaining with product design, the report poses a question which is very relevant to our industry and of the moment; how does a firm determine what standards should apply to the conduct of business which is not subject to specific rules or guidance or which falls outside the regulatory perimeter? Also, how does the firm use a ‘customer lens’ to review the information and documentation associated with its products and services?

Then finally, there are some more topical issues which fall within the broader ethical arena. We have all read pieces on AI in our industry and it is here that there is a risk of unintended consequences from an ethical standpoint. So, the question is what action has been taken to guard against potential customer detriment – including through accidental unfair bias – owing to poor data quality or algorithmic design? And taking a broader and overarching perspective, how does a firm ensure that the policies and procedures which apply to its staff, and the business decisions taken in relation to customers and counterparties, reflect the ethical values and principles of the organisation?

I hope that this article has drawn out enough from the full report to whet your appetite for a more detailed read. Many of the observations and questions posed are well constructed and thoughtprovoking. They should either support an embedded ethical culture or challenge current attitudes and procedures which may be overdue for review. Either way I encourage you to allocate some quality time and invest in a longer read.

“

What action has been taken to guard against potential customer detriment – including through accidental unfair bias – owing to poor data quality or algorithmic design?

NACFB | 23

Ask the Expert

Assessing the FCA Motor Finance review

Q Julian Rose Director Asset Finance Policy

What has been the reaction from asset finance professionals to the report?

The FCA had indicated its views on several occasions over the past year, so the findings didn’t come as a big surprise.

The new bit was the FCA suggesting that lenders should do more to ensure that authorised dealers and brokers comply with CONC, the consumer credit handbook.

Do you recognise the FCA’s interpretation of current practices?

Some of the findings seem relevant only to a small part of the car finance market.

Most motor lenders outside of the sub-prime sector either don’t use Difference in Charges (DiC) commission models at all, or carefully manage the risk of conflicts of interest if they are used.

What was highlighted as problematic within existing commission models?

There are theoretical conflicts of interest within DiC models, that can be effectively managed, but the real problem might be one of transparency. We might expect the FCA to require brokers’ commission mark-ups to be disclosed where DiC is used, rather than banning the model altogether.

24 | NACFB

Do you anticipate changes to key asset products?

Do you think any changes in the consumer space could impact commercial brokers?

&

Lenders will clearly need to review commission models. As a minimum, they will want to check that any theoretical conflicts of interest from DiC are being effectively managed, across both consumer and business finance. That could lead to some stricter DiC policies, although in most cases this will only be formalising the conversations that already take place between lenders and brokers.

All asset users are increasingly interested in the benefits they obtain from using assets, rather than focussing on ownership.

Fortunately, that trend is a good fit with the regulation, with a need for simpler financial products. The shift from PCP to PCH is one example of this happening.

A

Do you anticipate changes for asset finance brokers and current finance models?

Whenever the FCA changes its consumer credit rules, unless they specifically limit the changes to certain products, they impact regulated asset finance. I doubt any changes to the regulations will be limited to consumer car finance.

Will firms' policies and procedures face increased testing?

Smaller car dealers are likely to need to be more closely supervised. Rather than spending a lot of time testing dealers’ policies and procedures, lenders might consider two alternatives.

The first is to use more technology to ensure they have control over how finance is sold. The second is to work with specialist brokers.

Could any replacement for Difference in Charges (DiC) commissions alter power structure between brokers and between brokers and lenders?

The FCA first needs to consider that an outright ban on DiC could be quite harmful for small businesses. A simple flat rate model could make it too expensive for brokers to provide services to the firms that most need support. Whatever the solution, commission should be proportionate to the risks, time and effort required by the broker – not to the broker’s negotiating power.

Julian Rose is director of Asset Finance Policy, author of the A to Z of Leasing and Asset Finance, and researcher for Apex Insight reports into consumer credit sectors including used car and retail point of sale finance.

We fund assets of all shapes and sizes At Aldermore it’s not one size fits all.

From machine tools to food processing, we’ve got the combination that’s right for you and your customers.

AAF773-0319-004899

Call us on 0370 218 7800 or go to the website to find out more aldermore.co.uk/allshapesandsizes

Special Feature

Advertising Feature

By supporting small businesses, we can help the economy thrive Tom Shave Head of Broker Funding Circle

S

mall businesses are the lifeblood of our economy.

They account for 99% of all businesses in the UK and over 60% of private sector employment. Their role is absolutely crucial in helping communities to flourish and in providing jobs around the country. For small businesses to continue to thrive, they need support and access to capital.

By working together, Funding Circle and our community of introducers can do just that.

Funding Circle was founded in 2010, a time when small businesses weren’t able to access the finance they needed to grow. We set out to give them a new way to access capital, and our lending platform now helps thousands of businesses across the UK. From retail to healthcare and leisure to manufacturing, we can help your clients from across industries and regions access finance to take their next step.

Along with our brokers, we’ve been stepping up to help small business owners while other sources of traditional finance have been in decline. In fact, more lending is now done through Funding Circle than ever before, and in the UK in 2018, net lending (total lending minus repayments) to SMEs through Funding Circle was higher than all the UK high street banks combined (£723 million to £515 million – Bank of England data).

While we’ve come a long way since 2010, underpinning all of our work is a passion to help small businesses. It’s a drive that we share with our brokers, because they understand that by supporting small businesses, we help the economy thrive.

Probably most remarkable, is that for every £1 of lending to small businesses through Funding Circle, more than £2 is added to the UK economy. This highlights just how valuable small business finance is to us as a country, and why reliable, affordable access to capital is a win-win for everybody.

26 | NACFB

Investing in our introducer service As the business continues to grow, we’ve also been investing heavily in our introducer channel. The team grew by 50% in 2018, and we’ve recently welcomed two senior hires to the team including a new regional manager in the North and our first ever BDM dedicated to Scotland. We’ll continue to strengthen the team in 2019, with a particular focus on building out our regional offering.

Our regional managers are also supported by our team of Business Development Executives (BDEs), who are on hand to provide day-to-day support to introducers, helping them get more deals done more efficiently, so they can give a better service to their clients. Our introducer team is also backed up with tech resource to enhance our offering and online experience. By developing all of these areas through 2019 and beyond, we’ll continue to improve and give introducers the highest level of service possible.

A faster service for your clients When we launched our introducer channel in 2012, it could take as little as two weeks to go from initial application to funds in an account. Fast forward to today and you can see the real benefits that introducers can enjoy.

Our introducers can now check their client’s eligibility in 30 seconds without leaving any credit footprint. If they apply and submit all the documents by 1pm, they’ll typically get a decision the same day. The funds will then be in their client’s account in as little as five working days.

This level of service helps clients make quick decisions for their business, moving quickly on new developments and making the most of their opportunities. We’re not stopping there though.

By continuing to invest in our product, we plan to have 50% of applications fully automated by 2020, further reducing the time it takes to give a loan offer.

To find out more about how we can work together to support small businesses, come visit us at June’s NACFB Commercial Finance Expo and join us at the Funderpark (stand G06).

Meet your dedicated BDM at the NACFB Commercial Finance Expo NEC Birmingham, 19th June

See you at the

on stand G06

Special Feature

New kids on the block How block finance is opening up to more brokers Brian Jerome Associate Director Arkle Finance

I

But the landscape is shifting, and a new breed of smaller, more agile players has emerged, offering more choice to both brokers and their clients.

Building blocks

t’s a boast few forms of finance can match. Block discounting allows commercial finance brokers to build long-term relationships with their clients, while at the same time generating a steady stream of recurring revenue.

Block discounting is best known as a way for a business to raise funds against a future income stream. But it’s also a useful tool for ‘own book’ brokers, as well as dealer connections holding their own rental portfolios.

At a time of intense competition and squeezed deal flow, block finance in effect enables brokers to offer their clients an ‘own book’ funding solution. Its uniqueness allows the broker to differentiate themselves from the competition and generate long-term value by producing strong, sustained earnings over a period of time.

As the name suggests, these lease agreements are grouped together into a block. This block, which is underpinned by end customers’ repayments, is used as security for the duration of the funding agreement. Once the block is repaid, the funder returns ownership of the agreements to the business.

However, block finance has traditionally been dominated by a finite number of larger funders, who have tended to insist on minimum thresholds beyond the reach of many brokers wishing to access this form of finance.

The injection of finance at the start of the process is of course highly attractive to clients. But in addition to the instant boost to the business’ cash flow, the real appeal of block discounting lies in its flexibility, competitive price and the certainty that comes

28 | NACFB

from knowing the profit margin between their lending and funding rates.

The benefits for brokers and funders Such deals offer corresponding long-term benefits to brokers.

Beyond the obvious draw of recurring revenue and the chance to forge an ongoing relationship with the client, block discounting allows brokers to build their own brand in a controlled way – scaling up market share in stable, sustainable increments.

While block finance may offer lower absolute returns for funders than individual asset finance deals, there can be significant economies of scale. While due diligence needs to be thorough to ensure that all the customer agreements in a block are of similar quality, the common thread means research and scrutiny costs can be competitive.

But for many funders the core appeal mirrors that of brokers – continuity and the chance to forge strong relationships with brokers who may prove crucial introducers in future.

As specialist funders we offer a variety of finance products and we have a depth of experience in offering block discounting facilities to clients in niche sectors that tend to be overlooked by the bigger players. By increasing our activity in this sector, clients and brokers are steadily being offered more choice, not less.

“

But the landscape is shifting, and a new breed of smaller, more agile players has emerged, offering more choice to both brokers and their clients

NACFB | 29

Special Feature

Maintaining a client’s happiness An enhanced service ensures your business borrower clients keep coming back – and remember, first impressions really do count Norman Chambers Managing Director NACFB

I

t costs five times more to find a new customer than it does to retain a current customer and the latest research suggests that an unhappy client will share their experience with approximately 20 people, while a happy client shares their experience with just three or four.

This is something brokers and lenders operating in the commercial space know all too well; that there are few things more important than keeping your clients happy.

As brokers you have to provide and maintain high-levels of client care on multiple fronts both with the business borrower and the lenders you partner with to fund them.

We have all witnessed those who naturally excel in customer service.

They have greater understanding, patience, and listening skills.

Good for them. But for others, and from my own personal experience, instilling an organisational culture of quality customer service can be trickier.

Your clients want your relationship to work – that’s why they engaged you in the first instance. There are obvious signs a customer is unhappy and failure to spot the warnings can be symptomatic of a relationship that’s already broken down beyond repair.

No one wants to admit that their client care could do with improving, and for most of the Association’s Members, it doesn’t, but it is always helpful to review our own processes, behaviours and imbedded cultures and reflect honestly as to whether this best serves a client’s needs.

I’ve outlined a series of questions that explore the journey of a client relationship, if you can honestly say you meet all the requirements, then brilliant. But maybe one of these aspects will shine light on an area that could be improved upon and even save you the agony of a lost client.

Are you giving the right first impression?

As the adage goes, you never get a second chance to make a first impression. I remember only too well in previous client facing roles the challenges we had in raising customer satisfaction levels.

It is though easy to get so wrapped-up in the correct protocol and language that some forget what I consider to be the basics; maintaining eye-contact, a confident posture, remembering to use a client’s name, and doing so with a smile!

Is your brand reflective of your offering?

You should always strive to be the best brokerage in your sector or region. If businesses see your brokerage as a leading brand, they are much more likely to stick by you. This will give them confidence because the consensus confirms that they already have one of the best finance providers. Your brand is more than just a logo and website, it is in all sense and purpose your shop

window, and it is important that it is consistent, appropriate, and conveys the right tone.

Are you identifying opportunities proactively?

Don’t wait for customers to ask you what else can be done. Come up with ideas and new strategies to proactively tell your clients how they can get more from their borrowing requirements. This demonstrates to them that you care about making sure their investment in your expertise is helping them to grow. It will also improve your business adding more to the bottom line.

How often do you call your clients?

Modern communication makes everything easier. Scheduling periodical calls with your clients to share product updates and to ask how things are going rarely yields negative results. If you can make the, somewhat awkward, ask of ranking your service out of ten, this can then be tracked over time. If they do not give you a ten, try not to ask why, instead ask what you can do to make it a ten.

“

No one wants to admit that their client care could do with improving, and for most of the Association’s Members, it doesn’t, but it is always helpful to review our own processes, behaviours and imbedded cultures

NACFB | 31

How long are your clients waiting to receive an email reply?

We’ve all experienced an email inbox bursting at the seams, and it can feel overwhelming. The happiest clients are usually responded to within 24-hours, and if possible, within the hour.

It is much more effective to reply saying that you received an email and that you will reply as soon as possible instead of waiting several hours and responding with a long-detailed email.

Are you maximising the value of your insights?

Your opinion and market insights will no doubt be valued by both clients and lenders alike and you may even highlight for them opportunities that they might not be aware of. Generating valuable content shows that you are on top of your game and improves brand awareness. The very magazine you’re reading provides you with a platform to share your insights, are you making the most of the benefit of membership by joining the conversation?

We would really like to hear from you.

Are you being decisive enough?

Clients hire you because, to them, you are the expert. You cannot afford to be uncertain of what’s best for their needs. Your confidence should come across in your discussions. A simple cheat is simply to avoid the terms ‘if’ or ‘maybe’ in your correspondence with them.

If you anticipate questions that require further research, try and conduct this research ahead of time and if you don’t have the right answer share your client’s curiosity to obtain it.

Are you adding a personal touch?

Adding a personal touch to the relationship such as a hand-written Christmas card or an email about a work anniversary or achievement goes a long way. Fundamentally, it shows that you care and reinforces the view that you also value what your clients think of you. Brokers are particularly good at being personable; but remember not all clients will want to discuss their business on the eighteenth – or even in the nineteenth – hole.

Realistically, are you over-promising?

Time for another adage; it’s better to under promise and over deliver.

One way to avoid naysayers or unhappy clients is to set realistic expectations from the start and only work with clients that are happy with them. It takes discipline when dealing with new and repeat 32 | NACFB

clients to avoid the pitfalls associated with over committing; the clear communication of both your approach and timelines will go some way in managing expectations.

Do you instil confidence in your clients?

Confidence doesn’t have to come from you alone. Remember, as a broker you are part of a nationally recognised trade body – the largest independent one for brokers in the UK – do your clients know this? It can’t be understated the reassurance your clients will feel with the knowledge that you adhere to a Code of Practice and have undergone independent reviews before coming a Member.

Display the NACFB logo proudly, it is a kitemark that commands respect from SMEs and lenders alike.

Are you taking the time to listen?

Your SME clients are as much of an expert in their field as you are in yours. You need to listen to ideas and inputs from them because they may have worked with their own client-base longer than you and can make your efforts more efficient. Listening to why a business wants to borrow can be as important as the how and the when.

It all forms part of painting as clearer picture as possible for a lender to evaluate the deal.

Have you accepted that you’ll never win them all?

And finally, I’ll end my list with a quote. Microsoft founder Bill Gates once said: “Your most unhappy customers are your greatest source of learning” as unhappy and dissatisfied customers can still be of value for your organisation. Beyond that, once you’ve accepted that you can excel at all of the soft skills I have outlined here and still lose clients, you’ll sleep more easily.

“

There are obvious signs a customer is unhappy and failure to spot the warnings can be symptomatic of a relationship that’s already broken down beyond repair

Helping clients navigate through Fast non-status bridging from ÂŁ30k to ÂŁ250k

info@charterbank.co.uk | 01392 340150

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

Special Feature

Making the case for brokers to diversify their offer Thinking outside of the box with an added value proposition

Peter Tuvey Managing Director Fleximize

D

iversification of broker services can usually be demonstrated by brokers expanding their product portfolio to offer their customers more than one form of finance. If the business owner you’re working with needs a commercial mortgage to secure a second premises and drum up more business, what better opportunity than to support them with working capital too? Whilst this type of diversification is growing as brokers adopt means of offering more to their customers, it’s also important to think outside the box.

At Fleximize, we recently took measures to diversify our own offering.

In February, we celebrated surpassing lending over £100 million to UK businesses by launching our member benefits. To do this, we conducted a short survey to understand what business support tools our customers value most. Then, we worked closely with a range of B2B and B2C providers to curate a collection of offers and discounts for our customers.

This resulted in member offers varying from business tools such as card readers and legal advice, to benefits that could improve customers’ work/life balance. Crucially, we don’t take a commission for these partnerships. Instead, the value for us lies in providing our customers more than just finance. The point of the exercise is, very simply, to help our customers. But in doing so, we’re showing them that we understand how hectic life can be when running a small business, and by adding value in the form of perks and discounts, we’re helping to make their business and personal lives that little bit easier – and cheaper.

This form of diversification illustrates how you can offer more to your clients by appealing to other aspects of their lives. Instead of simply trying to sell customers more of the same product, think of ways you can draw in new customers with ‘added value’ services, whilst rewarding loyal customers for staying with you.

In terms of brokerages, this can be practised by building your broker brand and letting go of the preconception that customers only value your expertise. To investigate this line of thought, we conducted a survey amongst brokers to identify what they believe customers value most. Of the 102 brokers who responded, the majority believed that ‘quality of service’ and their ‘knowledge and experience’ are the two most valuable factors to their customers.

When we took the same survey to business owners looking for commercial brokers the ‘quality of service provided’ and the ‘knowledge and experience of the broker’ were also popular choices, but business owners explained that these were factors they would expect from any reputable broker anyway. However, the clear

majority stated that the ‘range of lenders and products the broker has access to’ was the most important thing they look for. Many explained that this was because they would then have access to the most competitive products on the market, meaning that they’d be more likely to get a better deal.

Although customers clearly value diversification, it’s not uncommon to hear brokers airing concerns that diversification will distract from their core product and specific area of expertise. If that’s the case, consider building partnerships with other brokers in order to offer customers more while retaining the stance of being an expert in your sector of finance.

This can also be achieved by collaborating with other business service providers. In fact, when looking for a finance broker, ‘recommendations from accountants’ pulled in around 20% of the votes from business owners, demonstrating that there is certainly value in partnerships with other B2B service providers.

Similarly, over 58% of business owners said they’d trust a ‘recommendation from a business associate or friend’ over and above any other source, so it’s well worth thinking of ways to increase customer satisfaction and loyalty by offering your customers more than just your core product. This will also help to build your broker brand, instil trust in your service and attract new and repeat customers.

No matter which form of diversification you opt for, whether it’s working with other business advisors and industry specialists to offer your clients more products, or thinking outside the box to offer your clients perks and benefits to complement your core product, it’s clear that diversification for the sake of adding value has the potential to increase customer retention and boost the overall image of your broker brand.

“

Instead of simply trying to sell customers more of the same product, think of ways you can draw in new customers with ‘added value’ services, whilst rewarding loyal customers for staying with you

NACFB | 35

Special Feature

Don’t be so antisocial With 562 million users, LinkedIn is all about building networks and connections. It’s not just about who you know, but about who your connections know Kevin Vendel Head of Sales Spotcap UK

Gareth Davies VP Digital Strategy MWWPR

W

e all know it, there is no way around LinkedIn. But what’s in it for brokers? We’ll let Robert Collins, co-founder of Sirius Property Finance, answer: “I think it is important to work on a number of sales strategies and LinkedIn is an obvious way to target prospective clients and associated professionals. You need to work smart to make the most of LinkedIn.” Many of the brokers we’ve spoken to about LinkedIn told us that once they’d familiarised themselves with the platform, they soon realised its vast potential. But they also admitted that regularly posting on their own profile and company page and liking or commenting on their connections’ posts only got them so far.

“I want to take LinkedIn to the next level, but don’t know where to start,” one broker told us. Another one said: “I spoke to others and they have generated leads from it, but how?”

In order to support brokers in this matter and enable them to look beyond the basics of LinkedIn, Spotcap and the NACFB recently organised a LinkedIn workshop with public relations firm MWWPR. The half-day workshop focussed on helping brokers expand their existing LinkedIn knowledge with the aim of helping them reach new audiences and acquire new clients.

Graham Toy, CEO of the NACFB, was also among the participants.

He said: “In the fast-evolving world of social media it was great to spend some quality time with NACFB Members learning about the many uses of LinkedIn from a seasoned professional who presented 36 | NACFB

the practicalities and challenges of the platform. A perfectly pitched event empathising with the varied level of skills in the room.”

Following the workshop, we gathered the top tips to help all NACFB brokers get ahead of the game:

Make it easier to be found – profile checklist • Choose your profile picture wisely. Keep it professional but let your personality shine • Set your profile as visible to recruiters • Hide the “People also viewed” box on your sidebar to avoid viewers being distracted • Add a short and snappy headline to stand out • Use the summary and experience section to tell people why they should work with you • Add relevant media articles, award wins or your corporate video to your intro section • Finally, focus on the most relevant skills and don’t try to include *everything*

Go further than your network

Leverage your company page to drive acquisition

Once you have created an engaging personal profile as well as a company page, you can make new connections and engage with your network on a regular basis. Now, it’s time to start thinking about reaching new audiences. LinkedIn can be a powerful tool to build brand awareness, generate business leads and establish yourself as a thought leader. Put a small amount of marketing spend behind your content to boost its reach and speak directly to your target audiences.

• In addition to company and customer testimonials, share some more light-hearted comments or an office shot once in a while

The targeting on LinkedIn is incredibly sophisticated and you can advertise directly to the industries or professionals you want.

This can be tricky at first, so play around with a very small amount of spend until you get the hang of it or enlist the help of people with this expertise.

• Upload several pictures as this can multiply your engagement rate • Don’t forget to tag relevant team members, contacts and organisations to drive engagement • If possible, include a link to your website to increase online traffic

If you found these tips useful and want to learn more, why not join our next workshop? Owing to its success, we will be running another LinkedIn session later this year. To register interest in upcoming workshops email kevin.vendel@spotcap.co.uk

Not sure whether you should sign up? Let’s find out from these two brokers what they thought of the workshop:

Did you know? Four top headline terms which catch people’s attention

“Very educational and well worth the time spent at Spotcap, and Gareth from MWWPR was brilliant” – Paul Misner, Commercial Mortgage Broker, Vintage Financial Solutions Limited.

“Leader” or “Leaders”

“I recently attended a seminar to expand what was my limited knowledge of the benefits of LinkedIn for business use. At the end of the two-hour session, I cannot say I suddenly became an expert, but my eyes were certainly opened as to the benefits of using LinkedIn within the business sector” – Kevin Jones, CEO, Omega Group.

“Successful”

“Habits”

“Mistakes”

NACFB | 37

Special Feature

Reasons to be cheerful Are these the best times to be a broker?

Darrell Walker Head of Sales InterBay Commercial

I

t would be too easy for Brexit and the general discord in government to contribute to a sense of malaise for brokers as the effects of the ongoing saga seem to have contributed to a paralysis within the UK housing market. Anyone would be hard pressed to accurately predict what might be next on the horizon.

For brokers, however, the picture isn’t quite so gloomy. Growing complexity, both in the demand from buyers, and the increased range of financial products, brings with it opportunity. As changes arise as a result of market forces and government policy, the market responds with new products. It is increasing in complexity as specialist areas of lending grow in importance to respond to new demand.

This new level of complexity is a good thing for the broker. In fact, we are beginning to wonder if there has ever been a better time to be a broker. Indeed, the most recent report from IMLA suggests demand for professional advice amidst these uncertain times has reached an historic high – up to 90 cases p/a.

The bridging market is a good example of an area that has expanded over recent years with new lenders entering and new products being introduced to the market, providing a new potential revenue stream

38 | NACFB

for brokers. Our own research found that 70% of brokers believed demand for bridging has risen in the last year, and 68% of brokers noticed an increase in the number of bridging products available.

This increased activity brings opportunity with 65% of brokers attesting to the fact that as bridging cases often involve higher fees, it presented an opportunity to earn additional income.

As the number of bridging cases increases, so does the complexity of cases requiring bespoke solutions. An example of this was when we were approached by a client about a soon-to-be-completed development of nine houses and nine flats in Battersea, South London.

The developer was looking for an exit from seven remaining houses valued at £16.35 million, with costs of £11.34 million. As the agreement drew to a close, the client wanted a product that could repay the outstanding development finance and allow the sale of the units over a 12-month period, avoiding the need for a quick-fire sale.

InterBay created a bespoke product that meant as the client sold the units; the bank would retain full sale proceeds until the LTV fell below 50%. Once this had been achieved, the developer would then retain a share of the profits, as long as the LTV didn’t exceed 50%.

Government policy is another area which has created opportunities for brokers. As the mortgage tax relief begins to bite even more in this tax year, more and more landlords are turning to specialist brokers as they seek to borrow through a limited company to offset the changes to the tax treatment of Buy-to-let. Our research from a year ago, in conjunction with BVA BDRC Commercial, found that one in five landlords had already set up a limited company. Additional research

showed that 64% of landlords with four or more properties intended to buy their next Buy-to-let property within a limited company setup.

More broadly, as margins come under pressure in vanilla Buy-to-let, we see more and more landlords turning to brokers to maximise their yields. 51% of brokers have been approached by landlords looking to diversify their portfolios, with 14% wanting to diversify into commercial property. The more complex and diverse a landlord’s portfolio becomes, the more complex their funding needs.

As the demand for specialist brokers continues to improve, so too have the tools available. The reality is that we now have enhanced technology and superior knowledge of the market.

A good example of this is the introduction of our Buy-to-let hub.

Our recently launched online portfolio submission platform overcomes the challenges presented by the PRA’s new portfolio landlord underwriting standards, allowing greater automation and efficiency for brokers as they are able to upload landlords’ details within a single submission. While the cases may be becoming more complex, technology is able to do a lot of the heavy lifting.

“

Government policy is another area which has created opportunities for brokers.

As the mortgage tax relief begins to bite even more in this tax year, more and more landlords are turning to specialist brokers

So, despite the gloom, there are in fact plenty of reasons for brokers to be cheery. This is the time when trusted advisors can make the most impact, so start cultivating those valuable relationships with your BDMs as they are best placed to help you and your customers achieve the best solutions for complex cases.

NACFB | 39

Industry Insight

Beyond timidity: the businesses seeking alternative routes to finance Reviewing the findings from 2019’s Small Business Finance Markets report Graeme Fisher MD, Policy & Communications British Business Bank

P

ublished earlier this year, the fifth edition of our Small Business Finance Markets report provides an impartial and timely snapshot of markets for debt and equity finance for smaller businesses across the UK. One theme that emerges from this year’s report is that smaller businesses are either using external finance to put in place contingency plans or reducing their finance requirements as they delay longer term investment and expansion decisions.

The report shows that an increasing proportion of smaller businesses expect Brexit to have a negative impact on their business (29%, up from 22% in 2017), with more than a third (34%) expecting access to finance to become more difficult after departure, and only 3% expecting finding finance to become easier. Despite these concerns, however, just over half (50.4%) are still expecting to grow over the next 12 months (up from 35% in 2018).

Another theme of this year’s report is further confirmation of the continued decline in demand for external finance amongst smaller businesses. Just 36% of smaller businesses used external finance in 2018 against 44% in 2012. Bank lending stock (£166 billion) was similar to 2017 (£165 billion) but this continues a decline in real terms over recent years. Gross bank lending – which makes up the biggest proportion of business finance – averaged £14.4 billion per quarter. Repayments, however, were at virtually the same level – £14.3 billion per quarter – meaning that net lending over the year was positive, but only by a small amount.

Encouragingly, our research shows the growth of alternatives to bank 40 | NACFB

finance has continued, albeit at a slower pace compared to 2017 and previous years. As one of the objectives of the British Business Bank is to create more diverse finance markets for smaller businesses, this is positive news. Asset finance grew 3% in 2018, compared to 10% in 2017 and peer-to-peer (P2P) business lending by 18%, compared to 51% growth in 2017. Meanwhile equity finance flows were up 4% (compared with a 79% rise in the previous year).

However, the number of equity deals fell by 6%, with the rise in value being driven by larger deal sizes.

Awareness of alternative finance options has also continued to grow alongside the diversification of sources of finance.

Again, this is a source of encouragement as this awareness will help smaller businesses find the right choices for their particular needs: • 52% of smaller businesses are aware of P2P (up from 47% in 2017) • 69% are aware of VC (62% in 2017) • 70% are aware of crowdfunding platforms (up from 60% in 2017) Whilst our data shows that equity markets continue to develop and despite the increase in equity finance as a proportion of GDP in recent years, the UK remains well behind the US in terms of the scale and depth of its capital markets. As the Patient Capital Review demonstrated, that weakness was particularly apparent in the lack of long-term patient capital. As a result of the Review, the British Business Bank has taken measures to address these issues and increase the supply of patient capital, including the launch of British Patient Capital, a new £2.5 billion programme to enable more longterm investment in high growth potential UK companies.

Regional imbalances across the UK in the provision of equity have also come through clearly. The report examines smaller business finance in depth, going beyond the regional picture to examine trends at a local level. Analysis of the data reveals that equity deals remain concentrated in London (48%), and around tech clusters

elsewhere, such as Manchester and Edinburgh. But revealingly, these clusters mask stark differences at a sub-regional level – almost half (45%) of Local Authority Districts had zero equity deals in 2018, and a further 24% had only one.

Over the last year, the Bank has put in place a series of measures to address the underlying causes of these regional imbalances.

We launched £100m Regional Angels Programme to support earlystage equity finance, particularly aimed at areas of the UK that are currently underserved. Such finance can play an important role in funding businesses with growth ambitions. We also added to our existing regional funds, the Northern Powerhouse Investment Fund (NPIF) and Midlands Engine Investment Fund (MEIF), with the creation of a third regional fund, the Cornwall & the Isles of Scilly Investment Fund (CIOSIF). Both initiatives are supported by a new UK Network – a team working in every region in the UK, helping to develop local finance ecosystems.

“ “

Encouragingly, our research shows the growth of alternatives to bank finance has continued, albeit at a slower pace compared to 2017 and previous years

Finally, and with the support of a range of partners from business and industry groups, we developed the Finance Hub, a new online resource to provide independent and impartial information on the finance options available for scale-up, high growth and potential high growth businesses.

NACFB | 41 39

Industry Insight

A future where fair finance is available to all Commercial finance brokers can play a critical role in unlocking £250 billion of economic value by supporting more diverse entrepreneurs Jennifer Tankard Chief Executive Officer Responsible Finance

E

xternal finance is often a key requirement for business creation and growth, particularly where founders have limited personal or family-based resources, or when a business cannot generate sufficient surplus cash flow to invest in development. Commercial banks often fund this requirement.

However, despite having a viable business plan, some firms cannot access commercial funding, debt or equity.

Banks and mainstream asset finance firms have provided the bulk of the growth in gross new funding facilities for SMEs since 2011, but a key trend over this period has been the rapid growth of alternative sources of finance. As these have grown from a low base, they have reported high rates of growth, but they now account for nearly 10% of the market. This offers a real challenge to mainstream providers such as high street banks, as well as being at the forefront of new technology in both lending techniques and relationship management. Moreover, the growing range of finance providers suggests UK SMEs have greater choice than ever before in the supply of external funding.

But how do small businesses navigate the often-bewildering range of different finance providers and products to find the right match for them? Commercial finance brokers play a critical role in connecting businesses to appropriate finance products by working as conduits to banks, accountants, lenders and other partners on behalf of business owners.

Two recent policy developments have highlighted that certain key groups struggle to access the finance they need – women and younger people.

42 | NACFB

The Alison Rose Review of Female Entrepreneurship reported that up to £250 billion of new value could be added to the UK economy if women started and scaled businesses at the same rate as UK men. It highlighted that access to, and awareness of, funding was the number one issue for female entrepreneurs across the entire entrepreneurial journey, from intention to scale-up, with female-led businesses receiving less funding than those headed by men at every stage of their journey. In 2017, only 5.6% of UK women ran their own businesses, compared to 15% of women in Canada and almost 11% of women in the US. And worryingly, the gender parity gap between male and female entrepreneurs in the UK has worsened steadily since 2013.

Hot on the heels of the launch of the Rose Review was an announcement of a government review into barriers preventing young people from starting up a business, backed by the Prince’s Trust. Access to finance again is a key focus of this review, which will report its findings this summer.

Responsible finance providers play a critical role in supporting businesses excluded from mainstream finance to start up and grow their businesses. 84% of viable businesses lent to by responsible finance providers in 2018 were previously turned down by a bank, with £85 million lent to 5,310 businesses across the UK. Successful female entrepreneurs supported by responsible finance include Kath Austin, founder of BeeBee Wraps, Rosie Ginday, founder of Miss Macaroon and Charity Wilson, founder of Mappix. Spark:York, the founders of which were named 2019’s Young Microentrepreneurs of the Year in the Citi Microentrepreneuship Awards, is just one of the many businesses run by young people to have benefited from responsible finance.

There is some evidence that where access to finance decisions are predominantly taken by men (accessing venture capital, for example) women find it considerably harder to have their business proposition taken seriously and so struggle to obtain the finance they need.

Therefore, the Rose Review has called for the creation of a new Investing in Female Entrepreneurs Code which would commit all financial institutions to the principles of gender equality and transparent reporting of gender funding data. While brokers would fall outside this requirement, there is clearly a role for the NACFB to collate data from its Members on the gender balance of entrepreneurs that commercial finance brokers have facilitated to access finance. It could also share good practice between members in this area as well as considering why so few women choose to enter the profession.

We all know that small businesses are the cornerstone of the UK’s economy. Ensuring that women and young people have the same access to finance opportunities as men will unlock significant economic potential. Commercial finance brokers could play a key role in helping to close the £250 billion gap.

To find out more visit responsiblefinance.org.uk; follow us on Twitter @resp_fin or listen to our Responsible Finance podcast series.

“

Hot on the heels of the launch of the Rose Review was an announcement of a government review into barriers preventing young people from starting up a business, backed by the Prince’s Trust. Access to finance again is a key focus of this review, which will report its findings this summer

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NACFB | 43

Broker Voice

Wheels within wheels Why the FCA needs to better understand our sector before considering intervention

Graham Hill Vehicle finance broker GHA Finance

I

was extremely disappointed that most of the press reports that followed the release of the results of the FCA’s investigations into motor finance focussed on the amount of commission potentially built into the APR of the deals, declaring that the customer could end up out of pocket to the tune of up to £1,000.

I can understand why they would focus on this issue, but I have to say it’s probably the one issue that the customer can simply walk away from if they feel it is too high. With Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) now taking over as products of choice for new and used cars I feel we need to take a much wider approach to the way the product is explained to customers.

Gone are the days when we were simply dealing with finance products, neither PCP nor PCH are as simple as that. They are very complex and need much greater explanation beyond the amount being borrowed, the charges and the monthly payment. Whilst dealers and customers may focus on these amounts the real heartache comes at the end of the agreement when customers realise that the excess mileage charges for exceeding the allowance had a step. For example, the first 10% over mileage would be charged at say ten pence per mile, beyond that it could increase to twenty pence per mile.

The pre-contract information is no longer fit for purpose for these products, it needs to include other key information such as the excess mileage charges, how, when and where servicing of the car must occur, type of insurance, tyres, travelling abroad, quality of repairs – I could go on but I’m sure you get the point. If a dealer or broker has told you that you will have equity in the car at the end of the agreement and that you have every intention of owning the car, you may think that after the first service it would be fine to have the car serviced at a local garage or service centre such as Kwik Fit as you will eventually own the car.

“

I would like to see brokers and dealers undergo better training and that to be a condition of FCA Permissions

“

With Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) now taking over as products of choice for new and used cars I feel we need to take a much wider approach to the way the product is explained to customers

You then find that at the end of the agreement the balloon payment is higher than the price on the windows of similar age, model and mileage cars on the dealer’s forecourt, so you hand the car back to the leasing company. It is only then that you realise that by not having just one service carried out by a main dealer you can face a charge of over £1,000. In some cases this can also apply to having a service carried out late.

Of course, finding out at the end of the agreement is far too late.

You can’t change the dates that the services were carried out nor can you change the fact that you had the car serviced at a non-main dealer. This is far more costly than seeing an APR before you actually sign the agreement and deciding that it is far too high for your liking.

I should also point out that there is a negotiation going on. If the customer owes more on a car settlement to get out of their old car than the car is worth it is usual for the dealer to take some of the discount available in the new car and use it to help the customer get out of the old one. If that isn’t enough, they may even take some of the finance commission and use that to make sure that he secures a sale. It isn’t as black and white as it would seem!

The FCA also suggested that dealers and brokers should explain the finance options to customers or risk being seen as biased, possibly towards the deals that pay the dealer and the salesman the most.

My, nearly completed, new car finance book will illustrate over 40 ways to finance a car, is it appropriate to go through each of these with the customer? That would be ridiculous.

So, in summary, I would like to see brokers and dealers undergo better training and that to be a condition of FCA Permissions.

Additionally, I would like to see greater reform of Pre-Contract Information to include the areas discussed above. In fact, we need a new Consumer Credit Act to cover PCPs and PCHs instead of the cobbled together bits of legislation that leaves far too much open to interpretation and can leave consumers and small businesses substantially out of pocket. If the regulator ever wants the insight of an experienced broker, they know where to find me.

NACFB | 45

Opinion

How AI is challenging lending practices Richard Kerton Managing Director Esme loans

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e’ve come a long way since the introduction of the World Wide Web in the ‘90s. As technology evolves and customers’ expectations rise, the need to keep ahead of the game only increases.

To keep your business ahead of the game, it’s important to keep an eye on emerging technology and how it could help with running a business and serving customers. One thing we believe is changing the face of the credit and lending industry right now is the use of Artificial Intelligence (AI).

Put simply, AI is when software can perform tasks that would traditionally require human intelligence. It’s already being used widely for speech recognition, language translation and many others. AI is continuously being developed and could eventually perform very advanced tasks, for example in driverless cars.

While that kind of use of AI might feel a little way off, AI already has the potential to provide the credit industry with a better, more personalised service and streamline processes.

In practice, this means customers could get in contact with your business 24/7 by using a ‘chatbot’, which uses a machine learning algorithm to answer any queries a user may have, meaning you can focus efforts on other parts of your business. Chatbots are being more and more widely adopted across the industry and are becoming the go-to way for customers to interact with a business for simple queries.

AI can also enhance the internal processes of lending. For example, Esme uses AI to speed up the credit underwriting process. We use traditional credit assessment as well as a neural network model which is a series of algorithms that recognises relationships in a data set that mimics the way the human brain operates. The model can 46 | NACFB

process information pulled in from credit reference agencies as well as digitally linked bank accounts and accountancy software to quickly work out if a loan is affordable, smoothing and speeding up the customer experience exponentially.

Another area where AI can help give lenders the edge is in identifying when clients will need funding, potentially before they become aware of the need themselves. By understanding your clients’ buying behaviour and watching for signals in the market, programmatic AI technology can give you a good idea of when customers may run into financial challenges if they don’t take action. This gives you the opportunity to proactively market financial products and services to those who are likely to be the most interested at the right time, boosting your chances of success.

AI is becoming more sophisticated the more it is used, hence its effect on the credit industry will only grow. We are all impacted by this rapid evolution of business technology and with emerging technologies such as AI, you can give your customers a unique experience that could help to set you apart from the competition.

It is already out there, so if you’re not already, it could be time to consider how this and other technologies could enhance your business model.

“

AI already has the potential to provide the credit industry with a better, more personalised service and streamline processes

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Opinion

The journey of a development finance deal Navigating the development process – from initiation to funding John Hardman Head of Sales Bridging Finance Solutions

T

he journey of a development finance deal can be challenging and complex in terms of planning and infrastructure. When considering a development finance deal at initial enquiry stage, a lender should be presented with an overview of the project including projected costs (as well as a breakdown of build costs) and GDV (end value), outline feasibility study, plans and planning detail.

By providing this level of information at the outset, we are able to quickly assess how viable a scheme is and whether this is something that can be progressed. Time is often critical for a development deal, so the more details that we can be presented with up front, the quicker and more accurately the lender is able to respond.

Feasibility study It’s important to consider wider details around the project in terms of feasibility. Look at the infrastructure of the surrounding area – access to transport, employment opportunities, leisure and other amenities. All these factors will influence the level of demand for properties in that area which in turn will ultimately impact the end value and sale times.

Understanding the local and wider market can’t be underestimated when considering an end value. Look at values of similar properties 48 | NACFB

and gather accurate comparisons as well as prices realised.

Building a picture of your perfect buyer can also prove to be a helpful part of your wider strategy.

Projected costs Clear cost projections are obviously crucial. A breakdown of construction costs divided into stages or phases including trades as well as costs incurred through professional services should be detailed. You will need to provide evidence of how much has been personally invested into the scheme to demonstrate your own financial commitment against the loan amount.

“

It’s important to consider wider details around the project in terms of feasibility.

Look at the infrastructure of the surrounding area – access to transport, employment opportunities, leisure and other amenities

Building a professional team Using a professional team such as valuers and solicitors that are well versed in bridging and development finance can heavily influence the outcome and profitability of any scheme. Their ability to understand, react and advise appropriately will prove to be a major asset.

Appointing an experienced and reputable contractor with relevant accreditations (or independent trades) will also support any application and give you confidence as the project gathers momentum. Ask for evidence of previously completed projects and even visit them in person before any appointment and if possible, obtain client feedback.

Quantity surveyor The lender typically appoints the QS who will complete a feasibility report before drawdown and comment on costs, build times etc to manage expectations of the client and to give the lender comfort that the scheme will be seen through to completion within budget.

Some lenders insist on monthly visits whilst BFS allows the client to dictate frequency of visits whenever they need more cash which reduces costs.

Underwriter The role of the underwriter is a double-sided one in as much as they aim to protect both client and lender. The underwriter will pull together the valuation report, QS report and the clients own paperwork including plans, cash flow and build programme.

The underwriter will then provide the client with a deal structured to ensure that 100% of build costs are covered.

In addition, if there are any warning signs such as unrealistic build costs or sale times the underwriter will make the client aware and suggest ways to mitigate such factors. Once the client is happy this will be submitted to solicitors to move towards completion.

Solicitor

the underwriting due diligence. A solicitor ensures that security is in place for the client and lender’s loan carrying out all legal due diligence until the point at which the deal is completed. They will also ensure relevant warranties and contracts from all third-parties are correctly executed.

There are multiple elements/parties to consider when planning a development finance scheme – by being aware of all of the necessary components beforehand, and with the right professional support, your deal has a strong chance of success.

Bridging Finance Solutions recently held its first ever Development Finance Day in association with the NACFB, which attracted over 100 professional delegates from across the industry.

“

The role of the underwriter is a double-sided one in as much as they aim to protect both client and lender. The underwriter will pull together the valuation report, QS report and the clients own paperwork including plans, cash flow, and build programme

A solicitor is appointed at the final stage of the process, once the lender has the valuation and QS report, and has completed NACFB | 49

Opinion

Entering the era of de-risking In an era of safeguarding only the confident can thrive Michael Dean Principal Co-founder Avamore Capital

T

he 2019 property market creates an unclear picture and over the past 18 months, we have seen the industry adjusting to this sentiment of uncertainty. Evidence from Avamore Capital’s most recent bulletin demonstrates the market ‘de-risking’ on transactions. Headline figures from the unregulated bridging and development finance spheres support this theme and market trends are emerging as a consequence of this changing dynamic. Below are some of the key findings from the report.

Unregulated bridging and development finance dashboard The average loan terms for unregulated bridging and development finance are unusually high, developers are compensating for longer build periods and accounting for a potential slowdown in construction and activity until the impacts of Brexit become clear.

Furthermore, many are working in more time to secure sales within the extended cycle. On the lender side, the market is witnessing reduced leverage with many funders looking to de-risk deals.

Simultaneously, GDVs are falling and so, there is less capital in the market available for developers, as a result we may see a greater need for joint venture equity partners and mezzanine finance.

Land values Valuers such as Simon Mills from Kempton Carr Croft are corroborating the sentiment that GDVs are falling. This is putting increased pressure on developers who will find it difficult to secure enough funding for projects in the current climate. Build costs have risen due to the weakening pound – and are expected to go up even further following a no deal Brexit – and now, according to Dane Sampson of Sampson Homes developers are “…[building] in enough margin to envisage any drop in the market which would be deemed extreme” in order to safeguard themselves. As such, the viability of 50 | NACFB

schemes is dwindling unless land values soften. For landowners with high holding costs there may be some urgency to sell at reduced prices but for those with low holding costs, it is likely that they will maintain sites until the market corrects.

Whilst some developers may be able to pick up land from distressed owners, most will be unwilling to pay high prices at this stage and so, we might see a slowdown of development activity in the short-term.

Increased rental exits There are those that are moving ahead with projects and completing within the next few months; it was reported by Matthew Cleave of Arc & Co. that most are “…not even considering sales as an exit strategy.”

Instead, they are looking to rent units which is reflected in the increased need for Buy-to-let products. This trend is encouraging lenders to expand their product offering to meet the new demand.

For the end user, fewer are willing to buy in times of uncertainty and so we are seeing increased demand for rentals which is putting upwards pressure on prices, particularly in the south. As more developers build-to-let, this trend will hopefully correct in the medium-term.

The uncertain market is naturally causing lenders and developers to tread a cautious path. Whilst some could argue that now is the time to take a ‘watch and wait approach’, provided the viability of schemes and exit routes have been carefully considered, the market still presents opportunities for the most confident developers.

“

On the lender side, the market is witnessing reduced leverage with many funders looking to de-risk deals

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5

Listicle

Ways to stay positive

I

4. Reflect on your personal successes

n an era of almost relentless negativity, there are few places to turn to find good news and let’s face it, us Brits aren’t always the best at seeing the brighter side of life.

When you think about your personal successes of the past, you are taken right back in time to pleasant situations.

Remember the times when everything worked out well and you excelled beyond your limitations. You might want to keep an email folder of positive emails and interactions that make you smile.

But, there’s a lot to be positive about; unemployment is falling, we’re technically living in the most peaceful era of modern history and we have access to more information than any other generation before us.

We thought we would continue the positive theme of this month’s magazine by compiling five ways to stay positive.

5. Take care of yourself

2 2. Minimise negative external messages

1

Let’s be honest, all over the news, on the radio, on TV, in the newspapers or on social networks, it’s negative headlines.

If it bleeds, it leads – and positive events hardly feature at all. To get some distance from negative news, go without social media for a few days or spin a favourite record instead of getting angry at Question Time.

1. The best medicine

3. Remove yourself from negative situations

Laughing makes us happy. The lending community is full of great characters all of whom know a good joke or two. Take the time to consciously smile at a client or lender, and you’ll see that you get a smile back. It can make you feel good fast as the brain releases more happiness hormones when you smile.

When you surround yourself with negative influences, the attitude tends to rub off on you. If you have negative people around you and in your team, be sure to have as little contact to them as feasibly possible, if any at all. Surround yourself with a team of people with positive attitudes, and you’ll be happier yourself.

52 | NACFB

If you feel good about yourself, you’ll give off completely different vibes. Clients enjoy partnering with someone who has a positive and healthy attitude. SMEs want to hear advice on growth opportunities from someone who can share their vision with them. At work, make the time to take a walk and eat healthy foods – you’ll soon notice the positive effects.

5

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Five Minutes With

​ ive F Minutes with: Damien Druce Damien Druce Director of Intermediaries Assetz Capital

Describe your role in ten words or less?

Working in partnership with intermediaries to improve products and processes.

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

A successful deal involves all parties being on the same page; there needs to be consistency and transparency amongst businesses, lenders and brokers so that everyone is pulling in the same direction and working to the same endgame.

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

Unrealistic expectations. It is important for intermediaries to research the sizes and types of deals we work with to ensure they are making feasible requests. We would also have trouble accepting a deal that has been requested with an unrealistic turnaround time – some deals are complex and need more time than others.

54 | NACFB

What recent professional accomplishment are you most proud of?

I am very proud to be a part of a team which has delivered exponential growth in a crowded marketspace, reaching a milestone lending figure of £700 million to SMEs and property developers since our inception in 2013.

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

Whilst technology is a vital tool in the industry and is certainly very valuable, I think it is essential that commercial finance brokers don’t lose sight of the importance of a ‘human touch’. To fully understand businesses and build relationships with customers and borrowers, I think face-toface contact is essential.

What is your favourite piece of management/leadership advice?

I would advise anyone to remain humble and self-deprecating. It’s important to be careful who you tread on so don’t rule out any potential relationships in the future.

Which person has inspired you the most?

Margaret Thatcher. As an ‘80s kid, I’m very inspired by Thatcher’s strength during her leadership – she gave millions the belief that you can contribute to society and make a real difference if you are determined, have a strong work-ethic and integrity, regardless of your background.

Where is your favourite place in the world?

London. I love the fast-paced nature of the city, its architecture and its rich and impressive history. The City also remains a vital location in the current financial world.

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