Commercial Broker (NACFB Magazine) November 2020

Page 1

Issue 84 NOVEMBER 2020


The award-winning magazine for the National Association of Commercial Finance Brokers

18 BEING DEALT A FAIR HAND Asset brokers and their seat at the table

20 SAVING THE HIGH STREET How UK retailers are adapting to COVID

Premium concerns Taking cover amidst increasing risk

34 TOGETHER WE STAND The bridging sector’s role in recovery

42 BREAKING THE CYCLE Flushing out the money launderers


In this November issue NACFB News

Special Features

4 6 8


Note from Norman Chambers Updates from the Association Note from headline sponsor, Lloyds Bank 10-11 Industry news round-up 12-14 Patron news


28-30 32

34-35 36


Recognise Finance: Tough times don’t last NACFB: Insurance market in freefall NatWest: Going global Haydock Finance: Reaping what you sow ASTL: Together we stand BEF: Delivering finance for good Bibby Financial Services: Taking its toll

Industry Insight 40-41



Regency Factors: Maintaining funding lines SmartSearch: Breaking the cycle Philip Ross Solicitors: Rights of recourse

Opinion & Commentary 46-47

28 Patron Profile 16-17

Liberis: Finding a way

Compliance Update





Finance House Solutions: Leading from within Mercia Asset Management: Funding northern futures Bridging Finance Solutions: A broader appetite Listicle: Five Bills that could cost business dear Five minutes with: Jamie Thompson, Key Account Manager, Fleximize

Ask the Expert

British Retail Consortium: Saving the high street

Further Information KIERAN JONES Editor & Feature Writer

33 Eastcheap | London | EC3M 1DT JENNY BARRETT Communications Consultant

33 Eastcheap | London | EC3M 1DT LAURA MILLS Graphic Designer

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18-19 NACFB: A fair hand




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Norman’s Note


he UK economy has achieved only a fragile recovery from the depths of the coronavirus pandemic, with many business owners still suffering severe hardship.

With a second wave of coronavirus undermining efforts to return to normal, businesses’, households’ and investors’ confidence shaken and little scope for further fiscal stimulus, the UK has a long way to go before output reaches pre-pandemic levels. A broad-based and robust recovery does not appear on the horizon, risks of substantial and long-lasting scarring effects on the economy are once again rising. And we are all managing a level of risk. Even throughout times when there seems little by way of spontaneity, we are surrounded by risk. A simple trip to the supermarket now seems comparatively perilous and fraught with the unknown. For those in the insurance sector, who have built careers from managing risk, the calculations being made now – and the resulting risk appetite – will reverberate widely.

Norman Chambers Managing Director | NACFB

In this issue, we examine the UK insurance sector through the lens of the intermediary community and the SMEs they serve. Market volatility has seen an increase in premiums and a ‘hollowing out’ of cover, all at a time when the safety nets they provide are most likely to be used. Tens of thousands of British businesses are awaiting news from their insurers on how they will respond to a landmark legal ruling on business interruption cover triggered by the coronavirus crisis. With the state-backed loan schemes winding up, another safety net is being folded away. Many SMEs remain on the tightrope above, knowing that another prevailing wind could result in one wobble too many. In the interim, and whilst entrepreneurs battle on, our role in commercial lending remains as vital as at any time since March. Tough times don’t last, tough people do. Britain is moving forward – and we’ll be with you every step.


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Association updates for November 2020

Funding future growth in 2021 NACFB Expo moved to new June date

2021 virtual events

The NACFB has moved next year’s Commercial Finance Expo to the new date of 16th June 2021. The event had been set to take place on 24th March 2021 at Birmingham’s NEC, but due to continued uncertainty and viability of hosting a large-scale event in the current climate, the date has been rescheduled.

Next year the NACFB will host a virtual Funding Future Growth series of broker finance forums, available free online for all the Association’s Members.

The flagship event will still take place at the NEC and will still feature over one hundred lender exhibitors all under the same roof on the same day. All existing delegate registrations and stand bookings remain valid for the new date. Following the success of the Association’s first ever Virtual Expo, the NACFB returned last month with a more expansive virtual event. The Autumn Virtual Expo featured a live panel debate, virtual roundtables hosted by the Association’s support sponsors and over 40 updates from next year's exhibitors. Commenting on the NACFB Expo’s new date the Association’s managing director, Norman Chambers, said: “When planning an event of the NACFB Expo’s scale, many logistical factors have to be taken into consideration. Given developing social restrictions, it is paramount that the safety and wellbeing of all attendees is put first. “Our flagship national event remains the biggest and busiest of its kind, the new June date will ensure that the country has a chance to overcome the pandemic and resume something akin to normal service on the other side.” To register your attendance, book a stand, or find out more, visit

programme unveiled

In a move away from events focussed on finance products, these new forums will be structured instead around the business sectors in which SMEs operate. The aim is to provide brokers with a more holistic understanding of the requirements and challenges their clients face. The events will feature a wider range of Patron lenders, as well as guest speakers who will provide updates on each sector from an outside perspective. • • • • • • • • • • •

Property Investment Finance Forum – 09/02/21 Professional Services Finance Forum – 25/02/21 Manufacturing & International Trade Finance Forum – 10/03/21 Property Investment Finance Forum – 20/04/21 Transport Finance Forum – 11/05/21 Technology Finance Forum – 06/07/21 Residential Property Finance Forum – 09/09/21 Retail Finance Forum – 23/09/21 Hospitality Finance Forum – 21/10/21 Property Investment Finance Forum – 02/11/21 Construction Finance Forum – 16/11/21

Norman Chambers, NACFB managing director, spoke of the decision to reframe NACFB events, saying: “The decision to focus on business sectors means that a broker who attends a virtual event aimed at helping fund UK retailers could come from a variety of finance sector types.” All events remain at no cost to NACFB Members. Find out more and register at


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Note from our Sponsor

The right side of history Finding the confidence to overcome

Andy Bishop UK Director, Commercial Broker Development Lloyds Banking Group


s we come to the end of the year, we are now some seven months into the COVID pandemic. From national lockdown to the relaxation of restrictions and now with some additional limitations and local lockdowns reacting to a second wave. Throughout, the broker community has responded with agility, expertise, and professionalism. Let us not underestimate the vital work which brokers have done – saving the very existence of many SMEs whilst being SMEs yourselves. Business flows and committed lending at Lloyds Bank have been re-established at or indeed above pre-COVID levels and all funders are working through how the future may or may not impact on appetite including reviewing those sectors which have flourished during the pandemic. They will also be closely thinking about the year ahead, the impact of the various government schemes reducing or stopping and the likely significant spike of activity towards the end of March when government loan schemes may require repayments to commence. The recent announcements in the Chancellor’s Winter Economy Plan will potentially give more flexibility to businesses with repayment of BBLS and CBILS once the detail is known – nevertheless there are three key reasons why I am confident for the industry:

1. History shows us that the broker market recovers quickly from any economic downturn as SMEs seek options for funding. 8 | NACFB

2. Customer behaviour is changing – we are seeing personal

experience of intermediated activities influence the way in which SME owners make business decisions.

3. There are already, and will continue to be, significant

opportunities for brokers both to support new transactions and refinancing and restructuring.

We are supporting brokers not just individually but also through a series of local virtual ‘Broker Espressos’ where the broker development managers bring alive real-time case studies of businesses we have (and some we have not) been able to support. Broker feedback has been hugely positive as it gives real insight into the ‘art of the possible’ for their clients. We plan to roll these out even more frequently in 2021 and also they can be tailored for individual broker firms, especially those with national networks. November will undoubtedly feel different in 2020 with no Gala Dinner – the Virtual Awards ceremony though will be the must attend event of the year and I wish all the nominees the best of luck. We are proud that we have remained open for business throughout the pandemic and equally remain committed to supporting brokers as a key part of our strategy to help Britain recover – if you would like to find out more about what we can offer or to join our Broker Panel, please visit:

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Industry News

Industry News

1 1. Pandemic to hit retail property values A Duff & Phelps poll of investors suggests retail property values are expected to fall up to 40% over the next year due to the coronavirus crisis. The survey saw 37% of investors say they expect retail to suffer the worst long-term damage, while 36% flagged hotels as the sector likely to be hardest hit. Most respondents expect these sectors to see a drop in value of between 10% and 40%. Almost four in ten expect the pandemic to take between 5% and 10% off the value of commercial real estate assets in 2020.

2. OECD: Disorderly Brexit could damage economic recovery The OECD has warned that the UK’s economy faces a double risk to recovery from a disorderly Brexit as the coronavirus pandemic drags down growth. The think-tank said the COVID-19 pandemic would further complicate a disorderly Brexit as companies were less prepared for the end of the transition period. It warned that failure to secure a free trade agreement before the UK leaves the Brexit transition period at the end of December would leave the economy 6.5% lower in the next few years. 10 | NACFB

3. IMF: COVID-19 will cost global economy £21.5trn

6. CII reveals impact of FCA on trust in insurance

The International Monetary Fund (IMF) has warned that the COVID-19 pandemic will cost the global economy £21.5 trillion in lost output by 2025. The IMF said a stronger than expected performance in Q2 and Q3 means global output is likely to fall by 4.4% in 2020 compared with the 5.2% drop forecast in June. For Britain, the IMF predicts the economy will decline by 9.8% this year, less than the 10.2% forecast in the summer.

A Chartered Insurance Institute poll of 142 members has found that two-thirds feel the FCA’s business interruption case has reduced trust in the sector. Broken down, the results show 29% feel the FCA case resulted in the public’s trust in insurance being greatly reduced and 39% thought it somewhat reduced the faith consumers have in policies paying out when needed. “Consumers continue to value transparency and clarity as integral to trusting services and their providers,” said CII chief membership officer Keith Richards.

4. Banks show cautious optimism but brace for challenging 2021 The banking sector remains cautiously optimistic, despite business volumes being 12% down on pre-pandemic predictions, according to the latest CBI/PwC Financial Services Survey 2020. The quarterly survey found that despite the impact of COVID-19 on industries such as travel and leisure, the top line impact for the sector has been less significant. However, banks and building societies are already anticipating a sharp increase in the value of non-performing loans over the next three months.

5. Unemployment hits three year high The UK unemployment rate has risen to its highest level in over three years, climbing to 4.5% in the three months to August, compared with 4.1% in the previous quarter. Figures from the Office for National Statistics (ONS) also show that redundancies have hit their highest level since 2009. The data shows that an estimated 1.5 million people were unemployed between June and August, with the number of people made redundant hitting 227,000 – an increase of 114,000.

7. One in five bosses expect job cuts by year-end A fifth of UK business bosses believe they will need to axe up to one in ten of their workforces by the end of the year, YouGov research reveals. The poll of 1,108 key decision makers shows that 21% expect to reduce headcount by around 10% before 2021, with this climbing to 26% among bosses at businesses employing more than 250 people. More than 10% of hospitality and leisure businesses plan to make cuts of more than 50% of their workforce by year-end.


8. HMRC probes 24,000 freelancers over support grants

10. Banks expecting spike in mortgage defaults

HMRC is contacting 24,000 freelancers who applied for state support grants amid the coronavirus crisis, checking to ensure they met the criteria for self-employed income support grants when they applied. Those that made claims after they were forced to stop trading during the pandemic will be told to hand back any funds, with the scheme designed to save freelancers intending to continue operating.

Banks are bracing for a spike in the rate of defaults on mortgages during the final three months of this year, the Bank of England’s latest credit conditions survey has found. The BoE’s quarterly report also shows that lenders expect demand for mortgages to stabilise in the fourth quarter, after rising in the previous three months. Lenders are expected to restrict loan products in Q4, though not by as much as in Q3.


9 9. MPs call for update on bank signature forgery claims MPs have asked the Financial Conduct Authority and the National Crime Agency (NCA) for an update on their investigation into claims of widespread signature forgery at British banks. The Bank Signature Forgery Campaign says it has submitted more than 360 crime reports backed by 19 files of documentary evidence and testimony from handwriting experts to the NCA. The allegations include forgery, perverting the course of justice and proceeds of crime money laundering offences.


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NACFB | 11

Patron News

Patron News UTB appoints Nathan Mollett as head of asset finance

Praetura Group announces CEO and board changes

United Trust Bank (UTB) has appointed Nathan Mollett as the Bank’s new head of asset finance.

Manchester-based Praetura Group has made a series of organisational and board changes.

Nathan joins UTB from fellow NACFB Patron Metro Bank where he has been director of their asset finance division since 2015. Nathan will take up his new position at UTB later this year.

The NACFB Patron is to simplify its corporate structure through the creation of two distinct divisions.

Nathan is a successful asset finance professional with over 20 years’ experience in the industry. Prior to joining Metro Bank, he spent 15 years with Wesleyan Bank as sales director. Nathan is also a board director of The Leasing Foundation, a not-for-profit organisation that supports the business finance sector through innovation, the development of young people, and diversity and inclusion. Upon his appointment at UTB, Nathan Mollett commented: “I am delighted to be joining United Trust Bank. I have been impressed by both their passion for customer service and commitment to the broker market. In asset finance they have a business with strong foundations, a great reputation with brokers and real potential to win a larger share of the market. I am excited about the opportunity and can’t wait to get started.”

12 | NACFB

The first division, Praetura Ventures, will oversee early-stage, technology-based venture capital initiatives whilst the second, Praetura Debt Services, will create an SME lending platform comprising Praetura Asset Finance and Praetura Commercial Finance. David Foreman and Peadar O’Reilly, both co-founders of the Praetura Group, will lead Praetura Ventures and Praetura Debt Services respectively. Meanwhile, Steve Caunce – former chief executive of AO World – has been made non-executive chairman of Praetura Ventures. Gary Davison has been appointed non-executive chairman of Praetura Debt Services. Steve Caunce said: “I am thrilled to be joining Praetura Ventures as chairman, working closely with Dave and the wider team. Ventures is an exciting business which has raised a highly impressive £30 million of capital over the past 18-months to support northern entrepreneurs. The business is absolutely committed to providing more than money to its investee companies.”

Patron News

Patron News Bridging sees Q3 bounce-back with 46% rise in lending

Just Cashflow launches new VAT loan facility for SMEs

Gross bridging loan volumes rebounded by 46% in Q3 2020, as activity recovers from the COVID-19 lockdown, according to the latest Bridging Trends data, compiled by NACFB Patron MT Finance.

Just Cashflow has introduced a VAT loan facility designed to help SMEs keep their finances in order as they look to deal with the challenges from COVID and make recovery plans.

Contributor lending transactions totalled £115.52 million in the third quarter of 2020 and, although lending figures were 36% below the pre-COVID levels of £180.94 million, they had risen significantly from the £79.4 million of bridging loans transacted in the previous quarter.

The NACFB Patron’s new VAT loan recognises that businesses may elect to pay their bills quickly which can hinder valuable cashflow. The VAT loan could ease this situation. The loan is for a maximum three-month term. The facility also recognises the need for payments to HMRC to be made on time so there is a fast and light touch application process.

Regulated bridging lending continued to dominate the sector in Q3 at an average of 53% of all lending. The average monthly interest rate in Q3 decreased to 0.78%, from 0.85% in Q2 – falling back in line with rates offered before the outbreak – 0.75%. Average LTV levels in the third quarter increased to 51.7%, from 48.8% in Q2. This is likely attributed to borrowers turning to bridging finance as mainstream lenders continue to tighten their maximum LTV restrictions. Gareth Lewis, commercial director at MT Finance, commented: “The stamp duty holiday and rising house prices has ensured that the market remains busy and it has been well publicised that the mortgage market is currently feeling the strain when it comes to delivering acceptable processing turnaround times, which can add to an already stressful experience.”

14 | NACFB

Chief operating officer, Martine Catton, explains: “All businesses appreciate it’s important to pay their quarterly VAT bills on time and HMRC shows little tolerance for late payments. “The majority of businesses set money aside for VAT bills they know are coming their way but inevitably there is the temptation to dip into that pot especially when faced with the type of pressures COVID has introduced. “The government has recognised this with its COVID VAT Payment Deferral Scheme, but it only covers payments due between 20th March 2020 and 30th June 2020. We are introducing our facility now knowing it will be valued when the next and subsequent quarters’ VAT bills are due on top of deferral repayments having to be made.”

Patron Profile

We either find a way… …or we make one Stephen Yearwood Head of Broker Liberis


s the COVID-19 crisis continues to unfold before us, it is daunting to think what the fallout will be in both the short and long-term. If the 2008 recession was any indication, delivering finance to small businesses quickly and efficiently will be crucial to the recovery of the global economy. Historically, small businesses are hit the hardest during economic downturns and take longer to recover once it has passed. In the 2008 economic crisis, many small businesses were forced to lay off employees, slash spending, halt expansion plans, and find new ways to survive until the financial crisis finally subsided.

The first wave While it’s not as difficult for small businesses to access finance from banks as it once was, it’s still not easy. Studies suggest that on average, small business owners spend up to 25-hours on a single application for traditional banks. On top of that, it often takes small businesses two to three months to get funded. This inefficiency and poor customer experience gave way to the rise of alternative lenders. By relying on technology and innovation, fintechs created completely digital and personalised customer service experiences for small businesses. Now, application and approval processes are primarily online and take 30 minutes or 16 | NACFB

less to complete. In some cases, the entire application, underwriting, and compliance process can be completed in minutes thanks to advanced software. Banks’ inability to fund small businesses quickly was underscored by the government’s COVID-19 relief schemes, CBILS and Bounce Back Loans. Bank trade association UK Finance revealed that only 21% of CBILS loan applications had been approved by lenders nearly three weeks after the schemes were launched. After the first lockdown earlier this year, both traditional and alternative lenders were forced to re-evaluate their underwriting policies and adjust to businesses’ inability to trade regularly. Some

Studies suggest that on average, small business owners spend up to 25-hours on a single application for traditional banks. On top of that, it often takes small businesses two to three months to get funded

lenders even paused new lending while eagerly awaiting what the government’s response would be.

Funding lifeline Once CBILS and Bounce Back Loans launched and fintech lenders were finally approved to offer them, many lenders, including Liberis, adjusted their products to ensure that these new offerings were in line with treating the customer fairly whilst keeping the cost of finance to a level designed to help these businesses recover. In some circumstances new products were designed from the ground up to cater to this new environment and maintain a strong appetite to help. The schemes proved to be a lifeline for SMEs. With the scheme extended to the end of November, small businesses now have more time to access these facilities. But what happens next? After all lockdowns are lifted and government funding has come to an end, small businesses will need capital to get back on their feet and return to business as usual or adapt to their new way of life. Recently and historically, some banks haven't been able to serve them at the speed that they’ll need, as we’ve seen at the onset of the pandemic. The sector that’s in the best position to help these businesses, and in turn the economy, is fintech. With business as usual slowly returning, underwriting restrictions are slowly loosening, allowing for more businesses to be approved for funds. Liberis can help drive a speedy injection of funding where it’s needed most, getting crucial capital into the hands of the small business quickly. Our decisioning algorithm and automatic payment mechanism allows us to fund businesses that are normally invisible to traditional finance institutions.

After the first lockdown earlier this year, both traditional and alternative lenders were forced to re-evaluate their underwriting policies and adjust to businesses’ inability to trade regularly

Bounce Back Loans offer affordable finance at rates unheard of in recent years. These will have to be repaid in favour of CBILS, and is where a lender’s standard offering can run alongside a Bounce Back Loan allowing for a side by side facility whilst taking advantage of the capital and interest repayment holiday. In the event of additional lockdowns this winter going into 2021, the government may need to extend or create new schemes to aid small businesses. In any new plan, it is imperative that fintech lenders be included as early as possible to ensure an effective rollout. Through streamlined government support and alternative funding options via fintech companies, small businesses will be able to stay afloat and return to business, as usual, faster than they would have in 2008. The way out of the COVID-19 recession is paved with finance for small businesses. NACFB | 17


Dealer’s choice Ensuring motor finance brokers are dealt a fair hand Dean Williams Compliance Officer NACFB


n August, the NACFB wrote to the Financial Conduct Authority (FCA) encouraging the regulator to look again at their motor finance proposals. Further to subsequent discussions, the Association returned once more in September evidencing working practice examples which, we believe, amount to a significant reduction of competition in the motor finance arena. The FCA’s steps to reform the motor finance market are destined to adversely affect the consumer. At the core of our challenge, the NACFB is calling for a clear distinction between independent brokers and motor dealers. Finance brokers and motor dealers have wrongly been pigeon-holed into the same category due to their regulatory permissions, but there requires a deeper understanding of their respective markets and positions held, as well as the potential benefits of customers having free choice in the marketplace. The refusal by a growing number of dealers to invoice third-party funders arranged through independent brokers is not treating customers fairly, is anti-competitive and clearly does not ascribe to the FCA’s stated view of competition working well in the marketplace.

A stacked deck? We believe that the steps implemented in relation to the ban on Difference in Charges (DiC) commission models fails to address 18 | NACFB

the control motor dealers have over consumer choice, and will inevitably remove their competition, adversely affecting the consumer and reducing the market's ability to enable consumers to exercise choice, by allowing them to select the best finance offer for their circumstances. Customers are being deprived of finance altogether where the dealer’s own finance providers decline the customer for finance. An independent broker will have access to other financial options, such as prime, near or sub-prime lenders that could provide finance on a risk-based rate to the consumer. Below we detail some specific examples of motor dealers who have explicitly detailed their refusal to deal with third-party finance providers (note, the names of the dealers have been fictionalised and any similarities to real firms are coincidental): • ABC Motors are a credit broker and not a lender. We are Authorised and Regulated by the Financial Conduct Authority.

The FCA’s steps to reform the motor finance market are destined to adversely affect the consumer

Other offers may be available but cannot be used in conjunction with this offer. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase.

123 Cars Direct are a credit broker and not a lender. Other offers may be available but cannot be used in conjunction with this offer. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase.

XYZ Dealership are a credit broker and not a lender. Other offers may be available but cannot be used in conjunction with this offer. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase.

Customers of the above firms are not likely to be able to access the most suitable and cost effective finance available to them, due to anti-competitive practices, designed to maximise profits for the motor dealer and finance provider, to the detriment of the consumer. The Association has provided feedback over many years that motor dealers have refused to invoice third-party finance providers forcing the consumer to use the lender paying the motor dealer commission. Dealers can negotiate commercial terms with selected funding providers – which the consumer then has to pay – they effectively control the consumers’ choice and dictate the price. The discretion over how much they earn from each transaction may well be removed, but they will already have negotiated packages around that. There are dealers who refuse to invoice the funder of choice and insist the consumer uses the dealers’ in-house provider which enables them to dictate the rate the consumer can access. This is invariably higher than that available from alternative suppliers such as brokers. The consumer shouldn’t be limited by a dealer only having one finance company’s offer available.

We have been disappointed to witness the apparent inertia of the regulator due to insufficient numbers of customer complaints on the matter

A full house In a virtual meeting with the head of supervision from the FCA motor finance division, the NACFB was encouraged to hear the regulator acknowledge how dealers were refusing to invoice lenders where they were not receiving commission. We have though been disappointed to witness the apparent inertia of the regulator due to insufficient numbers of customer complaints on the matter. As a result, the Association is imploring all our leasing and asset finance Members to share with us every example you hold of this taking place. If possible, we would ask that you can engage with the dealers and share with us emails stating that this is their policy. It cannot be understated that only by working together can we hope to show the regulator that the problem here lies not with commissions, but with the control that dealers have over consumer choice. NACFB | 19

Ask the Expert

Saving the high street

Q Tom Ironside Director of Business and Regulation British Retail Consortium

The retail sector has been one of the most impacted, how have retailers been coping through lockdown?

The pandemic has posed huge challenges for the viability of many shops threatening their survival following months of greatly reduced turnover as a result of store closures. This has left many retailers which were in good health before the crisis struggling, demonstrated by recent job losses and store closures. However, many retailers have risen to the challenges and proven their resilience throughout the crisis adapting to changing consumer behaviour and continuing to meet customer demand.

Are there areas of retail that have been more impacted than others?

The retail industry continues to face unprecedented challenges because of the pandemic. Non-essential stores had to close their doors during lockdown and as a result lost £1.6 billion a week. Those who remained open had to meet a huge increase in consumer demand and implement social distancing measures to ensure stores were safe almost overnight.

How have social distancing measures impacted footfall?

20 | NACFB

Footfall remains well below pre-pandemic levels as many businesses continue to work from home and people avoid using public transport. With the threat of a second wave it is unlikely we will see significant growth in footfall for some time especially in towns and city centres. This is having a very serious impact on the local economies in these areas.

hygiene measures. As such, retail remains a safe space for consumers, even under future lockdowns.


How has the physical versus online sales dynamic changed?


How can ordinary members of the public support the UK’s retail sector?

We encourage consumers to get down to their high street – every purchase we make, every item we buy, is a shop helped and a job supported. Retailers continue to work around the clock to create a safe shopping environment, so their customers can shop confidently. It is important customers queue considerately, maintain social distancing, follow instructions inside and outside shops, follow all necessary hygiene measures and be respectful to shop staff.

What innovations have your members been deploying to combat the impacts of COVID?

Retailers have done an excellent job in ensuring customers have access to the products they need throughout the pandemic. Businesses across the industry have strengthened their supply chains as well as investing hundreds of millions to make stores safe and secure for customers; this includes perspex screens, social distancing measures and additional

The current crisis has resulted in many people trying internet shopping for the first time, particularly among more vulnerable groups. It is quite likely that a proportion of these shoppers will not revert to in-store for some time, if at all. The surge in food deliveries online during this pandemic may result in a permanent rise in the proportion who do food shopping online – traditionally an area with low online penetration compared to goods such as books and electronics.

In what areas will retailers be seeking to invest in the coming months?

Coronavirus has accelerated some of the trends that were already ongoing in the retail industry. We have seen online retail sales boom in comparison to overall sales. As a result, we have seen many retailers invest heavily in increasing online capacity, from technology or development sprints to add functionality to online platforms, to automation or optimisation of supply chains and distribution facilities. Investment has not been even across the industry. We expect to see greater investment in digital infrastructure across the industry as retailers adapt to meet changing consumer behaviour and demand.

Special Feature

Tough times don’t last Tough people do Jason Oakley Chief Executive Officer Recognise


ho would want to launch a new bank during a global pandemic? It is a question more than a few people have asked me in recent months when they hear Recognise is on the brink of receiving its banking licence. It is certainly true when we started out to create Recognise three years ago, a bank specifically designed to serve the SME community, we could never have foreseen we would be welcoming our first customers amidst the economic disruption COVID-19 has caused. I believe the virus has reinforced the need for our offering and made it more pressing than ever. The effects of the health crisis are already being felt in all parts of the economy. Brokers understand better than anyone the difference a decent supply of credit will make to businesses in the tough years ahead. Business owners will need advisors who understand their needs and can provide them with the support necessary in as timely a manner as possible. Brokers will play their vital role, as will Recognise. From our standpoint, that means providing bankers in the community the opportunity to help their clients. It may sound evangelical, but I believe this is Recognise’s fundamental mission – serving the business customer.

A genuine understanding We all know SMEs are the backbone of the UK economy. They 22 | NACFB

account for 99% of the business population, provide three fifths of the employment and around half of turnover in the UK private sector. Yet, they remain overlooked, ignored, and dangerously neglected. They need someone to listen to them, champion their cause and give them what they need not just to survive but to flourish. That is where Recognise comes in. My understanding of business does not just come from my years of working in SME banking. My father was a carpenter who set up his own business. Some of my earliest memories involve him juggling those competing work commitments – managing cashflow, meeting payroll, dealing with VAT returns, and wading through red tape.

Yet, they [SMEs] remain overlooked, ignored, and dangerously neglected. They need someone to listen to them, champion their cause and give them what they need not just to survive but to flourish

Value for money and transparency are essential, of course, as is state-of-the-art technology, but relationship is everything

During my 35 years in financial services, I have set up and sold three businesses, so I have had experience of these challenges, too. This is also true of one of our key investors, Ruth Parasol, who co-founded Party Gaming, the online casino software giant. We also have two other anchor investors – the Bard family and a Delancey managed fund. Our team is made up of individuals who can relate to the pressures business owners encounter every day and we have shaped Recognise accordingly.

Establishing our place Until now, I believe too few SMEs have had real support from their banking provider. We chose the name Recognise for a reason. Our commitment is to acknowledge our customers’ needs and put them

at the heart of what we do. We are setting out to honour business owners for the value that they bring and to constantly improve in the ways that we serve them. That is what the SME sector, from sole traders through to larger firms, truly needs – proper service, pure and simple. The economic crash of 2008 was devastating, and one side effect was the erosion of expertise in the SME sector within banks. Brokers have done valiant work filling the knowledge gap in the intervening years, working with small business clients to get them the funding they need. The big banks still have 85% of business current accounts and about 85% of the small and medium-sized business debt market. But the sad truth is some banks no longer know or truly understand their SME clients. Good, profitable businesses find themselves forced to communicate with their bank through call centres, having no dedicated relationship manager. When you ask a business owner what they want from their bank, the most important thing is continuity of relationship. Value for money and transparency are essential, of course, as is state-of-the-art technology, but relationship is everything. A business wants a known, trusted point of contact who is accessible. And that relationship should be there for the good times and bad. Recognise will do things differently. We want to get under the skin of an enterprise, to understand its motivations, ambitions and how we can help it realise its potential. What could be simpler? Banking is no different to any service business – understand your client; be accessible, creative, and responsive; and, yes, give a great service. Getting those elements right is the way to build and, importantly, deserve a good reputation. I sincerely hope – and expect – that is what Recognise will achieve. NACFB | 23

Special Feature

Premium concerns Assessing an insurance sector in free fall Norman Chambers Managing Director NACFB


nsurance has long been used as a vaccine for risk and, to a greater or lesser extent, all businesses including intermediaries have had the jab. But along came COVID-19 and even the insurers discovered that they were not immune to the ravages that were about to be inflicted upon the UK economy. The result was a loss of appetite by the insurance industry for certain types of risk which, if left to starve, could have disastrous consequences for SMEs, the brokers who sold the policies, and threaten to throttle economic recovery.

Business interruption cover As the name suggests Business Interruption Insurance (BII) is designed to cover loss of income incurred as result of disruption to normal business, usually due to a disaster. Often policies focus on damage to property – think fire or flood – but many also cover other interruptions such as public authority closures, non-damage denial of access and, wait for it‌ diseases. And this is where the trouble started. Believing they were covered by BII, by the middle of the year many businesses started to apply for loss of income only to find their claims were rejected. The insurers argued that even though businesses were ordered to close to help stop the spread of COVID-19, the wording of the policies meant that they were not liable. As many as 370,000 policyholders were thought

to be affected, so the FCA brought a test case in their support aimed at clarifying the contractual uncertainties. To the joy of SMEs everywhere, the court ruled in the FCA’s favour, but that’s not the end of the story. The insurers are appealing which means that policyholders are still not due a pay-out. Although the case has been expedited to the High Court, this delay could spell the end for many businesses, particularly those in the hospitality and leisure sector, who simply cannot hang on any longer. When the final decision is made, a win for the FCA will be good but mostly bad. Good for the policyholders who have managed to stay afloat. A pay-out gives them the chance to fight another day. Not so good for the policyholders who couldn’t hold out. For them, a pay-out will come too late and feel, at best, like a poor consolation prize. Bad for SMEs looking for BII in the future. They can expect higher premiums and less cover. Bad too for the insurers who will have to dig deep to pay out, something they’re never keen on. A win for the insurance sector will also be good but mostly bad. Good for the insurers. They get to keep their pockets tightly zipped. Bad for the policyholders, many of which are likely to go to the wall as a result. Bad too for intermediaries who sold the policies in the first place. They may find themselves the subject of a new misselling scandal as policyholders look for someone to blame.

Professional Indemnity Insurance PII is designed to protect businesses when a client claims to have suffered loss due to inadequate provision of service or professional negligence. This type of policy is extremely important for intermediaries and other firms who give advice. It’s not currently a requirement for FCA-registered brokers to hold PII, but even for intermediaries who are not regulated it remains important – as some lenders will not deal with a broker who doesn’t have cover.

500% – which is still less of a hike than other sectors which have seen premiums rise by as much as 1300%. For larger brokerage firms, escalations are rising by as much as 600%, and smaller firms are being quoted policies with a 400% increase. The Association has shared that huge price rises, combined with overall regulatory costs, will result in many firms exiting the market, or limiting the areas of product and advice they are prepared to consider. Any reduction in the number of firms available to provide financial advice will undoubtedly result in unintentional consumer detriment, through lack of choice. In April 2020 the FCA set out its position on the impact that coronavirus was having on PII for financial advisors. Whilst it recognised that the market was evolving and that some firms were concerned that their ability to renew their policies could impact operational resilience, the FCA stated that PII cover remained available and that it was up to insurers to decide what cover to offer, including the cost and on what terms.

Often policies focus on damage to property – think fire or flood – but many also cover other interruptions such as public authority closures, non-damage denial of access and, wait for it… diseases

Given that it’s a prerequisite for doing business, it’s alarming at the very least to find that PII premiums for NACFB Members are up by NACFB | 25

The NACFB has written to HM Treasury seeking urgent intervention in the PII market and to provide a reinsurance scheme, in the same manner the government did for the credit insurance market earlier this year.

end of the year, ensuring most insurance coverage would be maintained across the market. The aim was to support supply chains and help businesses to trade with confidence, knowing they could trust that they would be protected if a customer defaulted on payments.

Personal Guarantee Insurance

Although the information on the government’s website states that the scheme has “the potential for extension if required”, there has been no news as yet on what will happen come January.

PGI offers some financial protection to individuals, often company directors, who provide a personal guarantee on company loans. Personal guarantees are normally made for a fixed amount, secured on the individual’s personal assets such as the family home. It is common practice for buy-to-let providers to ask for a personal guarantee when lending to landlords who borrow via a limited company but they are increasingly being used by providers across a variety of sectors when lending to SMEs. Brokers are reporting an increase in applications for PGI on new business loans. Purbeck Insurance Services recently reported a doubling of applications in the space of three weeks in September following reports that the high street banks had cut access for new customers to the state-backed loans, even though the scheme has been extended to the end of November 2020. This sudden rise in demand is a clear indication that SMEs are increasingly looking outside of the government loan schemes for funding. But, according to 87% of commercial brokers surveyed by Purbeck, there would be a catch: that owners of small businesses would be under increasing pressure from lenders to sign personal guarantees to secure finance. Taking out PGI will mitigate some of the risk should the business fail and perhaps help the guarantor avoid losing their home or other asset on which the loan is secured.

Trade Credit Insurance TCI is designed to protect a business when customers who owe money do not pay. When the lockdown was imposed in March it quickly became clear that many businesses would struggle to pay their bills and as a result would run the risk of having their credit insurance withdrawn, or see premiums increase to unaffordable levels. Following direct feedback from the NACFB, the government announced that it would temporarily guarantee £10 billion of business-to-business transactions supported by TCI until the 26 | NACFB

Risky business It would be fair to say that the current reduction in appetite for risk has led to some unintended and adverse consequences not just for the insurance market but for the wider UK economy. Higher premiums and a ‘hollowing out’ of cover are only masking the real issues. Reduced choice for businesses at a time when they need all the insurance they can get could strangle any steps the government has so far made to support the economy. From the broker’s perspective, it’s not looking good either, not only for themselves but also for their clients who need intermediaries now more than ever to find solutions for their increasingly complex financing needs. It’s easy to say that the government needs to intervene but at the very least it needs to monitor the situation or, like COVID-19, the R rate will continue to rise to a point when too many businesses run out of breath.

Reduced choice for businesses at a time when they need all the insurance they can get could strangle any steps the government has so far made to support the economy

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Special Feature

Going global From crisis to recovery

Dave Furnival Head of Broker and Intermediary NatWest


lobal lockdowns have had a dramatic effect on international trade. The model of low-cost producers operating just-in-time systems in far away countries is a thing of the past for most businesses, with companies everywhere working to reduce supply chain risk. The pandemic has also made many businesses consider new income streams, partly by expanding into different products and services, but also looking for opportunities in overseas markets. UK businesses should still consider the potential of international trade, says Nick Clark, head of sales channel management, working capital sales, at NatWest. “Companies need to protect and maximise their growth opportunities by looking at markets where there is appetite for UK products,” he adds. “This will maximise value for owners, stakeholders and communities and deliver value to help the broader economy.”

Open for export The current economic environment for overseas trade can seem daunting. Trade wars are rumbling on and risks of non-compliance with different countries’ regulations are making businesses wary. But global trade is a matter of necessity, says Rebecca Harding, CEO of Coriolis Technologies. She points out that only around 10% of British businesses have no international customer exposure, although many more source from overseas – a dynamic that is complicated by Brexit. “The problem is that relationships have become more nationalistic and riskier since 2016. This creates a lot of uncertainty for any business, so it’s not surprising that some companies are looking to reduce their export markets at the moment.” However, the government is working hard to make it easier for businesses to engage with overseas firms and take advantage of international opportunities, says minister for exports, Graham Stuart. He points out that the Department for International Trade has recently launched a Check How To Export Goods tool on the website to give businesses product-level and country-specific information on issues such as duties, regulations, customs procedures and trade agreements between the UK and other markets. A February 2019 survey of more than 1,000 SMEs by YouGov for UK Export Finance, the UK’s export credit agency, found businesses that export have outperformed those that do not over the past five years. “Companies that export are more profitable, more productive and more resilient than companies that don’t,” says Stuart. “There’s a premium on British products and a real desire around the world to buy British.”

This is borne out by trade data: in 2019, UK exports exceeded £700 billion and exports’ share of GDP grew to more than 31%.

Embracing digital Over the past few years, digitalisation and technologies have increasingly been used to help organisations manage their supply chains and working capital financing more effectively, enabling them to reduce costs and increase efficiency while giving them broader access to finance through different institutions. Trade finance platform TradeIX has teamed up with enterprise blockchain company R3 and a group of international banks (including founder member NatWest) to create the Marco Polo network, aiming to help companies realise the full potential of global trade by making trade finance more transparent, smarter and better connected. Its open distributed network uses cloud technologies, blockchain and application programming interfaces to help companies settle their transactions and access funding using digital data rather than physical documents. Automated matching is at the heart of Marco Polo’s distributed network, says Daniel Cotti, managing director of the Centre of Excellence, Banking & Trade. “The problem is that every funder has its own system and businesses currently need to connect to each one. Every member of the network gets a digital passport, which allows them to deal with everyone else: they connect once to connect to many.” Since the network is distributed, data remains within each member company’s firewall, meaning the company is in charge of its data and decides on a transaction-by-transaction basis who to share this with. “Only the counterparties involved have access to the data, which offers huge data privacy advantages,” says Cotti.

The pandemic has also made many businesses consider new income streams, partly by expanding into different products and services, but also looking for opportunities in overseas markets

NACFB | 29

Working relationships Concerns about the potential for factory closures, further social distancing, and fears of overdependence on single suppliers are causing organisations to look more carefully at their trading partners. Many are doing greater due diligence into potential customers and suppliers, considering both their financial stability and the macro, environmental and geographic conditions they operate in. There are also more conversations about payment terms – many of which are one-sided. According to a survey carried out for Intrum’s European Payment Report 2020, over the preceding 12 months, 80% of UK respondents had accepted longer payment deadlines than they were comfortable with because they did not want to damage client relationships, while 51% said late payment was having a major impact on their liquidity. John Buckley, performance development lead and a director at Deloitte, is seeing organisations divert capital earmarked for research or maintenance into propping up operations: “SMEs are having to agree to much tougher payment terms; organisations are training their commercial teams to deal with financial distress at trading partners.” He sees a longer-term trend moving from just-in-time to more resilient and agile relationships. “Supply chains become more resilient with visibility and understanding. Firms that have diversified suppliers and a production network across different countries can adjust production if there’s a problem in one place.”

Keeping capital flowing The challenge of working through new relationships with partners in different countries and using different settlement terms lies in managing working capital. Very few businesses have a working capital strategy, as this tends to be a consequence of decisions rather than an aim in its own right, says Gavin Swindell, senior advisor at Deloitte. 30 | NACFB

While the past six months have made firms focus more on working capital and cash management, he says this has to continue. “People only consider working capital when they have to – then the sustained effort starts to drift until the next time there’s a crisis.” How can businesses keep the gains they have made during the crisis period? To fix improvements in working capital management into long-term habits, Swindell says they need to focus on governance, roles and responsibilities. “Working capital tends to be a small part of many people’s jobs so it can be hard for a business to control it. Digital tools can help supply globally consistent data on a real-time basis and we’ve seen an acceleration in digital adoption.” Clark sees the increase in pace of trade digitisation as one of the benefits to have come out of the pandemic. “As physical goods and documents haven’t been able to move around, there’s been much more focus and capability around digital documentation and processing, within operations teams and around logistics and supply chains. This is increasing, and we will see the benefits of greater digitisation for a long time.”

Trade wars are rumbling on and risks of non-compliance with different countries’ regulations are making businesses wary

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Special Feature

Reaping what you sow Funding Britain’s farmers ​Jon Hercman Agricultural Specialist Haydock Finance


griculture is a challenging sector to operate in and last year was no different. Fluctuating commodity prices made trading profitably difficult across many sectors and uncertainty around Brexit meant that many businesses held off making important investment decisions. The 2020 harvest is the smallest wheat area for more than 40 years and extreme weather conditions have made life especially difficult for farmers. Part way through the 2020 UK harvest the impact of the extreme weather conditions can already be seen, with yields well below the five-year average. Commodity price volatility continued to present challenges to farmers, especially beef and lamb producers, who saw poor prices through much of 2019 and were further impacted by a fall in prices in spring 2020 resulting from reduced demand during the UK’s COVID-19 lockdown period. Thankfully, prices have subsequently risen and now sit above 2019 prices. The effect that Brexit will have on UK farming is largely unknown. It remains unclear whether a deal between the UK and the EU will be reached before the end of the transition period, currently 31st December 2020. If the UK is to fully separate from the EU without a deal, then there will be significant concerns about the impact that changes to tariffs will have on commodity prices. Also, for the first time in over 40 years, the UK government will be setting its own policy for agriculture. Haydock Finance is focussed on supporting customers through Brexit and helping them realise any opportunities that arise. Many dairy farmers saw reductions in milk price through spring 2020, with some producers seeing cuts of more than 4% per litre. In addition to this, some producers have been discarding milk as increased demand from the retail sector has failed to make up for 32 | NACFB

falls in volumes that would usually be consumed by the food service sector. There has also been a lot of uncertainty around the use of foreign seasonal workers, particularly amongst growers of fruit and vegetables. Farmers have reported mixed reviews of the Pick for Britain scheme which was set up to support the sector with any potential labour shortfalls resulting from the coronavirus pandemic. Haydock Finance is developing a specialised agriculture proposition to service the farming and wider rural business communities. This will include arable farming, livestock farming, forestry, horticulture, equestrian and indeed any other business types that operate within the rural areas of the UK. We will initially be supporting the funding needs of such businesses through traditional asset finance products including Hire Purchase, Finance Lease and Sale & Leaseback. Moving forward, we will also be looking at opportunities such as livestock finance and land secured mortgages. Irrespective of market conditions, investment will remain crucial to agricultural businesses. Farm businesses that can be forward thinking and entrepreneurial will continue to invest and successfully grow. I am looking forward to building our proposition and working with our introducers to provide their customers with the best finance solutions.

Irrespective of market conditions, investment will remain crucial to agricultural businesses


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Special Feature

Together we stand The outlook for short-term lending Vic Jannels Chief Executive Officer Association of Short Term Lenders (ASTL)


here is no doubt that 2020 has certainly delivered more than its fair share of challenges. As we begin to look ahead to 2021, I think it’s fair to say that there remains a sense of cautious optimism in the bridging market. Nobody is predicting just yet that it will be a bumper year for lending volumes. There remain too many unknowns. How long will the pandemic continue to interrupt daily life? How quickly will the economy recover? What will be the short, and long-term, impacts of Brexit? These are just a few of the many possible questions wyet to be answered. However, if this year has taught us anything, it is that our market is resilient and able to adapt at pace. As rapidly as the situation regarding COVID-19 and the lockdown changed in late March and April, so did the bridging market. Lenders responded quickly and effectively to government initiatives, changing processes, investing in more streamlined technology and adjusting their focus. We have seen the traditional qualities of honesty, transparency and loyalty come to the fore as lenders, intermediaries and other service providers pulled together to find a way through the pandemic. Any broker active in the market now will know that the need for short-term finance remains and demand from customers is strong. As we move into next year, there is reason to believe that this 34 | NACFB

demand will remain. The latest SME Finance Monitor survey carried out by research company BVA BDRC reports that at the end of July, 87% of SMEs said they had been negatively impacted by COVID-19, with nearly half saying that their income was down by 50% or more. The research found that businesses are prepared to borrow to steady the ship. According to the SME Finance Monitor, at the end of Q2 this year, 16% of businesses said they planned to apply for finance and 32% said they expected to be applying for finance at some point in the future. There are, however, clear challenges that must be overcome. The enforcement moratorium has undoubtedly had an impact


According to the latest Bridging Trends research from MT Finance the average completion time on a bridging loan in Q2 2020 was as much as 50 days


This can be very frustrating for brokers, and there is a natural correlation between the length of time taken for a bridging loan to complete and the likelihood of the application being withdrawn ahead of completing as circumstances change

on bridging lenders and, while it is now over, there will continue to be negative repercussions on the provision of bridging finance in the future. This will ultimately have a detrimental impact on customers, who will have less choice and face more restrictions and, potentially, higher rates. This is a situation we will continue to monitor closely, and we will do all we can to reduce the impact of such unintended consequences of policy decisions in the future.

I appreciate that this can be very frustrating for brokers, and there is a natural correlation between the length of time taken for a bridging loan to complete and the likelihood of the application being withdrawn ahead of completing as circumstances change. We endeavour to encourage all lenders to progress cases with speed wherever possible, but also with the highest possible levels of diligence.

I like to think that, at the ASTL too, we have stepped up to represent the interests of our members and the wider market. We have developed a meaningful dialogue with the Treasury and encouraged engagement with the FCA on the specific challenges for the bridging sector in providing ongoing support for consumers affected by coronavirus. Throughout the year, we have also managed to grow our membership and influence. I firmly believe that we find ourselves in a strong and positive position to support the needs of our sector, and we are developing ways to work with other trade associations to further increase the impact and effectiveness of our activity.

We must remember that everything we do, as lenders and intermediaries, has the client at its centre and lenders have a duty of care to ensure that underwriting remains responsible, particularly in the current environment which continues to remain uncertain. So, it is understandable that lenders are taking a little longer over their decisioning, to ensure they are making those decisions based on all available and relevant information.

Another challenge to come out of COVID-19 is that lenders are taking longer to underwrite and progress cases than they were. According to the latest Bridging Trends research from MT Finance the average completion time on a bridging loan in Q2 2020 was as much as 50 days.

It can be frustrating to lose cases during the application process, but the sector is in a better position than many of us expected just a few months ago, and so we must remain cognisant about the challenges around us and manage our expectations accordingly. If we continue to adapt and show resilience, there is no reason why we cannot overcome the challenges to make the most of the opportunities in 2021. NACFB | 35

Special Feature

Delivering finance for good The CDFI Way Stephen Waud Chief Executive Officer Business Enterprise Fund


he COVID-19 pandemic has challenged businesses across all sectors and in all regions and created an unprecedented demand for finance. Brokers and lenders have, with the support of government and the British Business Bank, delivered record levels of lending. Community Development Financial Institutions (CDFIs) like the Business Enterprise Fund (BEF) have played their part in supporting businesses in need. To date, CDFIs have lent £49 million to nearly 600 Micro, Small and Medium Enterprises (MSMEs) through CBILS. This has helped protect existing jobs and create new ones while supporting the social and economic wellbeing of communities. CDFIs enjoy close working relationships with businesses within their respective communities and provide critical finance to businesses which remain under-served by mainstream lenders. The aim of CDFIs is to bridge this funding gap with innovative products that support survival and growth even in these, the toughest of times. Looking forward, CBILS and BBLS will close at the end of November. This places a burden on brokers and lenders to deliver as many of these loans as possible during the coming weeks. CDFIs like BEF are well-placed to assist. They are also looking at innovative ways to support businesses now and in the months ahead. Seeing a clear need for additional, fast and flexible support, CDFIs continue to develop sustainable loan portfolios that deliver finance for good in the communities they serve. This is best illustrated by the Revive and Thrive loans recently introduced by BEF. The Revive loan provides up to £50,000 on an unsecured basis although personal guarantees are required. It addresses the needs of businesses facing one of two scenarios. First, those businesses 36 | NACFB

who have an existing BBLS loan can now secure additional funds without having to take out a CBILS loan. Second, those businesses who are unable to access a BBLS loan now have quicker access to the finance they need. While many businesses are simply looking to survive the current pandemic, there are those who wish to grow. The Thrive loan supports these businesses with up to £250,000 on a secured basis. The Revive and Thrive loans from BEF are just two examples that illustrate the agile approach CDFIs take to provide finance for good. In addition, Responsible Finance – the trade body for CDFIs – is calling on government to introduce a post-CBILS guarantee. Based on previous funding programmes such as the Enterprise Finance Guarantee (EFG), for every additional £100 million the sector raises, CDFIs support 3,000 businesses and create and protect over 13,000 UK jobs. To be most effective, any new scheme should take elements from EFG and CBILS. This would enable CDFIs to secure external finance to lend. Importantly, it would support small businesses through the recovery and into the future, when access to finance from mainstream sources may become more difficult as happened after the 2008 financial crisis.

For every additional £100 million the sector raises, CDFIs support 3,000 businesses and create and protect over 13,000 UK jobs

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Special Feature

Taking its toll COVID-19 has affected more than the financial health of SMEs ​Paul Lomas Global HR Director Bibby Financial Services


he pandemic has challenged society in more ways than many of us could have ever imagined and unfortunately SME owners and employees are feeling its affects more than most. Our latest research, based on a study of 500 UK SME owners, highlights the impact of lockdown on UK businesses. From adapting to home working, furloughing staff, or closing premises, it is clear that the challenges facing the country’s SME population have continued to mount. While businesses are facing increasing financial pressures, it is evident that COVID-19 is taking its toll on the physical and mental health of business owners, with over a third (34%) having worked every day since the beginning of lockdown. Running a business in any economic climate presents its highs and lows, but the connection between entrepreneurship and mental health is now more relevant than ever. Overworking can lead to significant mental and physical health challenges, so it’s crucial that business owners take steps to help alleviate these pressures by putting trust in colleagues and empowering their teams to make decisions to help share the load. However, the motivation for business owners to work extended hours is compelling, with more than half of SMEs (56%) stating that they will be unable to meet their running costs beyond 12-months. Meanwhile, many businesses are worried about the pandemic’s impact on productivity with almost a third finding it impossible to carry out all processes under the social distancing guidelines. Therefore, it is unsurprising that over a quarter (27%) of SME owners have found it difficult to maintain a healthy work-life balance whilst 38 | NACFB

navigating these imminent financial challenges. The cumulative effects of such pressures are weighing heavily on the shoulders of business owners. Worryingly, over a quarter (26%) said that they have struggled to sleep at night due to concerns about their staff and business, while more than a fifth (22%) said that their responsibility for keeping employees safe weighs heavily on them. We’ve been supporting businesses for 40 years, but never before have we experienced such monumental changes to our ways of life and how businesses operate. In order to kickstart the economy, we must do all we can to support the UK’s SME community, not just financially but with the guidance they need to manage their time, their people, and – perhaps most importantly – their own wellbeing. It is vital that business owners and employees recognise the correlation between physical wellbeing and mental health, as a healthy and happy workforce can boost employee engagement, increase productivity and reduce staff absences. There are some practical steps that everyone can take to help look after themselves, such as eating nutritionally balanced meals, freeing up time to get outdoors to exercise and enjoy the fresh air and trying meditation and mindfulness exercises. While stigma surrounding mental health remains an issue, we must encourage business owners to open up and talk with colleagues, friends or family, as this can often be the first step in overcoming these challenges. There are a variety of wellbeing sites and apps that are readily available to support individuals through these challenging times. We must remember that we’re are all in this together. SMEs throughout the UK and beyond are facing the same challenges, but by taking action now to support positive mental health and wellbeing, businesses can emerge post COVID-19 stronger and more resilient than ever.

Industry Insight

Keeping supply lines open Alternative sources of working capital and cashflow Rachel Craft Marketing Manager Regency Factors


he government’s Bounce Bank Loan Scheme (BBLS) has certainly provided UK businesses with the cash to survive the short-term issues that lockdown and the global pandemic have caused. With the schemes closing soon and the end of 2020 soon upon us, businesses need to start planning for the longer term. There's a lot to try and plan for. Whilst there is a payment holiday for the BBLS, businesses will need to factor in capital and interest repayments to their financial planning for 2021. There have been many views on the potential impact on SMEs and we have no way of knowing what’s to come, but history has a way of repeating itself and if it’s any indication, invoice finance should see a rebound in 2021. During the Great Depression between 1929 and 1939, there was an increase in all forms of secured lending including invoice finance for SMEs in the USA. The recession of 2008/09 saw credit risk changing overnight, leading to banks changing their requirements for previously unsecured lending such as overdrafts. Thus compelling SMEs to look for alternative financing solutions. The long-term changes we have seen since the 2008 recession have led to changes in trade globally, on an international and national basis. Invoice financiers have stepped in to plug the gap and pick-up the finance slack left behind by the banking sector as they pulled out or changed finance arrangements to SMEs. 40 | NACFB

These changes elsewhere in the finance community have meant that the invoice finance sector has remained buoyant and has seen modest growth in volume since the recession. Such growth has also meant that the invoice finance sector played an important role in the health of trade on a national and international basis. Over the next 12 months, based on experience, we can make some educated predictions: • Banks will tighten their lending, pulling lending lines to SMEs and making more conservative lending decisions. • SMEs will have to look at alternative funding solutions from non-bank lenders due to this change in lending appetite. • Credit insurance lines will be affected due to the instability of specific sectors impacted by the pandemic.

Invoice financiers have stepped in to plug the gap and pick-up the finance slack left behind by the banking sector

SMEs also have an opportunity to step into a supply chain gap. A survey by McKinsey in July 2020 showed that the crisis had revealed weaknesses in supply chains with 73% of respondents encountering problems in their supply chain prompting reviews across the board.

turnover to ensure operations run smoothly. The pandemic has had, and continues to have, challenges for SMEs, with cashflow being chief among them, compounded by the continuing issues of late payments.

Factoring facilities will be in demand in 2021, also as SMEs look for alternative sources of working capital and cashflow, the stability of invoice finance will assist SMEs in the temperamental economy in which they find themselves.

Many clients have made pivotal changes to the way in which they operate, be it working from home or changing their manufacturing to PPE for the NHS or care homes.

Regency has been supporting SMEs across the UK for over 25 years and were a stable pillar throughout the recession of 2008. Our clients are SMEs who are reliant on the predictability of their monthly

We have close working relationships with our clients, meaning they can rely on us to provide funding during the changes that the pandemic has wrought. 2020 has been a turbulent year, and we haven’t even mentioned the ‘B’ word…

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

NACFB | 41

Industry Insight

Breaking the cycle Flushing out the money launderers

Martin Cheek Managing Director SmartSearch


ecent high-profile cases of money laundering involving individual offenders, as well as global financial institutions, have really shone a light into the huge gaps in protection against financial fraud that still exist. The National Crime Agency investigated one such individual, Mansoor Mahmood Hussain, who they said developed a property portfolio worth £10 million over two decades, funded by organised crime, as he posed as a legitimate businessman. It was an envious lifestyle peppered with fast cars, luxury jets, super yachts, and a VIP guest list to rival most celebrities. But beneath the surface it was all funded by criminal gangs accused of murder and drug trafficking, among other things. Hussain was just one man but when you look at the other end of the scale to the billions pouring through some of the world’s leading banks, as exposed by the leaks from the Financial Crimes Enforcement Network (FinCEN), the real picture starts to emerge. There are some who consider financial crime to be ‘victimless’ because it involves moving cash through property and banks. But the reality is it funds some of the most despicable criminal 42 | NACFB

activity in the country. It shows that without the proper processes in place, we are allowing money launderers to use our property market to legitimise their activity, which is a danger to society. The Financial Conduct Authority (FCA) said recently that more needed to be done by the banks to protect themselves against money laundering and to take it more seriously. Of course, they’re right, but this has to go hand-in-hand with more prosecutions and stiffer penalties for those involved in this illegal industry thought to be worth up to $2 trillion.

The banks resorted to employing armies of back room staff performing manual tasks to process regulatory checks, which is not only laborious and expensive, but completely unnecessary

Banks need to work smarter and embrace the technology that is now available to every business on the high street. They must accept that gone are the days when it was good enough for a customer to walk into a branch and present themselves and a document as proof of ID. Aside from the fact that nationwide branch closures make it more difficult for customers, the chances of a bank cashier identifying a fraudulent document is very low. It’s predominantly nothing more than a tick box exercise as is their ability to perform regular and comprehensive sanction and PEP (Politically Exposed Person) checks. It has been, and still is, a long way short of what’s required to spot fraud. As a result, the banks resorted to employing armies of back room staff performing manual tasks to process regulatory checks, which is not only laborious and expensive, but completely unnecessary. Today individual checks and business checks are now fully automated and take less than two seconds and two minutes respectively. But it's not just banks that are guilty of this. It's professional enablers that are letting criminals do it. The banks act as the conduit of the cash from one end to the other, but you've got a whole set of professional enablers – including solicitors, accountants, company formation agents, that are helping these individuals and organisations to get away with it. So to that extent, you can’t wholly blame the banks because ultimately, it’s the role of regulators across the sectors to be the first line of attack. It’s a combination of the criminal acts of corrupt politicians, banks, professional enablers – and the regulators need to do more to clamp down on it. The threat from money laundering is higher than ever before, but the

You can’t wholly blame the banks because ultimately, it’s the role of regulators across the sectors to be the first line of attack

fact is it has never been simpler for companies to protect themselves and carry out the most basic checks, electronically, which would stop it at the front door. SmartSearch has pioneered the most advanced, triple-layered anti-money laundering platform which takes two seconds to perform a personal ID check. Increasing use of technology ensures businesses comply with all the current regulation and protects against criminal activity. That is why we are calling on the government to take their cue from the Fifth Money Laundering Directive, to mandate that all checks are electronic. The directive, published at the end of last year, clearly says that where possible, electronic verification should be used when undertaking customer Due Diligence (DD) and Know Your Customer (KYC) procedures. This will go a long way in the fight against the use of fraudulent documents, identity fraud and money laundering. NACFB | 43

Industry Insight

Rights of recourse Commercial landlords’ options for enforcement Alicia Pattihis Partner Philip Ross Solicitors


n 23rd April 2020, the Ministry of Housing, Communities and Local Government announced that new legislation will be introduced to prevent landlords from using what it sees as ‘aggressive debt recovery actions’. Whilst tenants welcomed this new legislation, landlords were less impressed by further restrictions on their ability to recover rent arrears, given the liquidity issues many are suffering as a result of reduced rental incomes. This announcement came just a few weeks after the passing of the Coronavirus Act 2020, which imposed a temporary ban on the right of a landlord to forfeit a commercial lease for non-payment of rent. In a bid to continue promoting a cooperative approach between landlords and tenants the government has now extended these restrictions until the end of 2020. What does this mean for landlords in terms of forfeiture action? Essentially landlords are still not able to take forfeiture action against commercial tenants who have not paid their rent (or other sums due under the terms of the lease) though they will be able to forfeit leases on other grounds, on the proviso that the usual s146 notice procedure is adhered to. This still is not without its challenges as the s146 process involves giving the tenant a ‘reasonable’ period of time to remedy their breach and the concept of reasonableness needs to 44 | NACFB

be considered in the context of social distancing, lockdowns and the natural delays that occur as a result. What about the Commercial Rent Arrears Recovery (CRAR) procedure? With regards to the recovery of commercial rents under the CRAR procedure, enforcement action by formally requiring the tenant to repay the debt due to the landlord may be taken once the arrears accumulate to the required threshold. If the tenant does not comply with the request for repayment, then the tenant’s goods may be seized and sold to repay the landlord. The threshold of arrears to trigger this process, however, has increased from three quarters’ rent to four, for notices served from 25th December 2020. The blanket moratorium on statutory demands being used as a precursor to presenting winding-up petitions has also been extended. Statutory demands may still be served but a statement confirming that COVID-19 hasn’t affected the financial position of the company (with the onus being on the creditor to prove this) or notwithstanding COVID-19, the company would have been unlikely to be able to pay its debts, must be included in the application. Without this any winding-up applications could be deemed void. The government has reiterated that it is trying to encourage dialogue between landlords and tenants, so that they can try to reach mutually acceptable compromises in respect of sums owing and falling due under leases during the coronavirus lockdown. If such compromises can be reached, it is important that the parties take care to ensure that these are properly documented, and that such agreement does not constitute a variation of the terms of the lease – as this could have adverse implications in the future.

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Broker Voice

Leading from within Transitioning from the transactional to the consultative

Perminder S Ghataore Managing Director Finance House Solutions


eadership is a concept that is continuously discussed and debated, no more so than in the current social and economic environment. The traits and behaviours that audiences want their leaders to display are often numerous and complicated by the personal demands of individuals who themselves are reluctant to raise their own profiles in case of any resultant criticism. I started Finance House Solutions (FHS) in late 2016, after spending over two decades working for large international blue-chip organisations, a career which although finance focussed progressed into relationship management and solution building. I was extremely fortunate to spend time working across many geographies with excellent colleagues, while gaining an understanding of the cultural differences which exist when conducting business from basic financial reporting to negotiating mergers and acquisitions. Some of those experiences can only be shared after a drink or two. One of the key learnings I took from my professional career was that in building relationships, presenting financials, or discussing strategy, the most successful individuals were the ones who could bring all parties to the table. Those that understand requirements, 46 | NACFB

highlight and communicate both the positives and negatives and then create a way forward which has all parties believing they have influenced the outcome in their favour. During the start-up stage of FHS, my focus was admittedly on the acquisition of new business and as many know, this can be a difficult period. Although my professional background allowed me to understand investment activity and analysis, I struggled with the concept of being an ‘intermediary’. I had transitioned to someone who merely gathered a client’s information in predetermined fact find documents and passed it to relevant lenders without ever recognising a client’s background, strategy or providing any information of expected financial performance.

Although my professional background allowed me to understand investment activity and analysis, I struggled with the concept of being an ‘intermediary’

A broker who can behave as a trusted consultant, can manage an array of situations while having the gravitas to deal with lenders and other professionals is adding far more value to the client

After moving from an Appointed Representative to a Directly Authorised status, I immediately changed my business methodology. I moved away from what I viewed as a transactional model to a more consultative one. In this model the client is represented by the broker, not only to lenders but also to the client’s other professional advisors such as accountants, solicitors, and wealth managers. This approach may not be new, and I accept that there could be brokerages who integrate this into their current processes, but it is demanding. Firstly, the broker must want to play the role of the leader and must be given the authority to do so by the client. They must also be able to display distinct leadership behaviours depending on the situation and audience. In business terms, the approach is aptly named ‘situational leadership’ – where leadership focuses on flexibility and the ability to adapt. Putting the above into a live example, a client of mine was doing their first development project for which the original development funding was obtained through FHS on a transactional basis. The design, project management, and overall leadership of the project was being conducted through their architect. The client contacted FHS for support midway through the project. Their current lender was running considerably behind schedule and project management information had been lacking leading to lender concerns and risk of funding recall. Having visited the project site alongside the lender and local building control, it was clear that there was a level of mismanagement, and the build quality of the units was poor. They were not in line with approved plans and in addition the construction partner had entered liquidation with the

project manager still claiming payments, all without advising the client of the situation. A traditional transactional brokerage might not have taken on this case, however FHS took control of lender communication and worked with the client’s solicitors to agree an extension to the existing development facility. The client was brought into the picture regarding project management and FHS supported the contracting of a new building partner and covered all the necessary requirements needed as part of refinancing new build properties. Although there has been considerable additional expense to the client, the consequences for the client could have been far worse. Further losses have been prevented and the client has now entered into the final stages of converting his development facility into a long-term lending product, which in the client’s view has only been possible due to the detailed consultative approach and leadership style we showed.

Of course, there can be criticism of the approach shown above and that the role of a broker is just to raise finance in the most appropriate manner and getting involved with non-financial matters could lead to further issues. However, my opinion is that a broker who can behave as a trusted consultant, can manage an array of situations while having the gravitas to deal with lenders and other professionals is adding far more value to the client, while smoothing the finance process. This is after all our purpose as commercial finance brokers. NACFB | 47


Funding northern futures Rolling out a new £40m fund Katy Horrocks Marketing Consultant Mercia Asset Management PLC


s a regional lender, Mercia focuses on investing funds, not in London and the South East, but in Hull, Preston and other regional towns and cities across the North of England. Just last month our debt teams managed to achieve something rather impressive too. Against a backdrop of economic uncertainty, we announced the launch of a new fund, Mercia SME Loans, which has up to £40 million to invest into regional SMEs. To find out more about the new fund, and how it can help NACFB Members seeking finance for their clients, I spoke to our managing director of Mercia’s debt funds, Paul Taberner.

Can you tell us the background to the fund? We raised the fund with our longstanding investment partner Greater Manchester Pension Fund. It follows our first debt fund launched with their backing in 2015 and we’re delighted to receive their continued support. That first fund backed 52 businesses including high profile brands such as Harrogate Spring Water and polyurethane fabricators, Rosehill Polymers. Roll forward five years and clearly COVID-19 has presented us with many challenges over the last six months, but as a regional lender we’re determined to ensure that access to finance is not one of them.

What types of deals are you looking for?

48 | NACFB

The fund can lend between £100,000 to £1,000,000 into SMEs based anywhere in the UK. Because our roots are in the North of England, we expect that we’ll do a number of our deals there. However, this fund can lend nationally, so we are appealing to brokers all over the UK to help us find ambitious SMEs that require additional finance. Ideally, we are looking for profitably trading businesses that are seeking investment for the next stage of their growth plans. Typically, this means the company can demonstrate three years’ trading history with turnover around £500,000, but each application does vary.

What can SMEs use the funds for? The loans can be used to fund working capital, acquisitions, capital investment and management team restructures or buyouts which is an area of specialism for us.

What sets you apart from other lenders? We regularly speak to advisors across our networks, so we know that it’s our flexibility to doing deals which sets us apart from traditional lenders. We don’t use algorithms to make our investment decisions and because of our personal approach we often do deals that appear too complex to others. We know what good deals look like and the team aren’t afraid to think outside the box to ensure those deals get over the line.

Next steps? The fund is now open to new applications, so we’d urge NACFB Members to get in touch with us today. A member of the investment team will contact you immediately to find out more and help progress the application.


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A broader appetite Short-term solutions, long-term outlook ​​Rachel Davies Head of Underwriting Bridging Finance Solutions


e didn’t particularly have to change our processes during lockdown – other than the logistical changes of working from home and juggling home schooling. Early on, we introduced a new app-based technology which enables us to remotely engage clients whenever needed and transmit sensitive documents securely at the touch of a button. We also very much embraced the online communication tools of Zoom and Microsoft Teams. Prior to the pandemic, we had been working closely with client experience focussed fintech, Nivo, to develop our online application process and had established a new way of working already. They helped facilitate the move online which now enables digital/remote access for every feature of the application process as part of one seamless journey.

App-based solutions The introduction of Nivo’s mobile-based onboarding and servicing solution has helped speed up the online process considerably, removing lengthy waiting times typically associated with signature driven documentation. We can now authenticate the applicant instantly with biometric technology, gather sensitive documentation 50 | NACFB

from clients over their mobile phones, and use Nivo’s immutable e-signing capabilities to finalise deals. We are also able to automate messaging to ensure that clients can reach us and continue processes out of business hours. Using this fully integrated single system, we have stepped away from using separate providers for open banking, ID&V, and e-signing, using one system for all that offers a seamless user journey. These enhancements make the loan process easier than ever before for both us and our clients.

We often rely on mortgage lenders to redeem our facilities and from March onwards we have seen reduced appetite and certainly the higher loan to value products are very limited

This approach is very much embedded within our business and we have completed several applications and can see that an average application is taking mere minutes compared to hours when following a traditional route. It was a combination of fortune and forward thinking that had led to us being in this position and so the transition fully online was not a huge one for us.

Adapt and thrive There have been challenges of course and our professional partners, like many other businesses had to furlough staff, thus putting pressure on turnaround times. Additionally, valuers and building materials for our development clients were in short supply, meaning some schemes encountered unforeseen delays. Fortunately, we worked very closely with our existing clients and all are fully operational again and benefitting from a buoyant property market in most areas. There have also been some positive changes as a result of COVID that we’ve embraced further. Knowing we can adapt, working remotely or with staggered hours if required is reassuring. Our USP has always been to take a commercial view on cases and being flexible and swift in our decision making – never have these qualities been more called upon than in 2020. COVID has inevitably changed the way that we consider an application or our risk appetite. We often rely on mortgage lenders to redeem our facilities and from March onwards we have seen reduced appetite and certainly the higher loan to value products are very limited. This has meant that ensuring our regulated clients have explored their exit options and received thorough independent advice is more important now than ever. Market conditions will inevitably shift again and as a short-term lender it is vital that we react quickly to any change. Forecasters predict job losses in the medium-term, which has historically been

Forecasters predict job losses in the medium-term, which has historically been linked to falls in house prices as confidence wains

linked to falls in house prices as confidence wains. Clearly if this becomes a reality then incentives such as the recent reduced rates of Stamp Duty will be needed to maintain stimulus. As a result of COVID and restrictions on funding lines, some lenders withdrew from the market altogether or ceased development funding. This presented a number of new opportunities and we have seen a vast increase in enquiries nationwide. We are one of the few experienced development lenders for regulated clients and will also consider part-finished schemes. We are an established and strong business, operating for some 15 years, and with confirmed and long-standing lines of credit. We’ve successfully navigated our way through other challenging periods including the credit crunch of 2008 and continue to maintain our support and commitment to clients through a very different set of circumstances. We remain agile and very much aware of changing market conditions, adapting and evolving, as we continue to deliver a quality product and service. NACFB | 51



Bills that could cost business dear


his year much new legislation has been whizzing around the Parliament racetrack to help businesses and society deal with the consequences of both COVID-19 and Brexit. Attaining podium places are the Contingencies Fund Act, the Coronavirus Act and the Stamp Duty Land Tax (Temporary Relief) Act. Many more have also crossed the finish line and been made into law. But there remain several Bills on the track which, although have been lapped, could impact parts of the commercial lending sector to a greater or lesser extent. Some have done a few circuits; some have only just left the starting grid. Here are five which deserve a cursory look under the bonnet, but whether they’ll crash out or make the chequered flag is anyone’s guess. As they say, the devil is in the detail and so far, there’s not much of that on offer, so better to flag the possible rocky roads now than have to get out the safety car later.

3. Value Added Tax Bill At its very early stages and as yet without the detail which could help businesses decide whether the proposals will help or hinder, the Bill proposes to raise the VAT turnover threshold and exempt certain goods and services from liability to VAT. Sounds like a good thing right?

1. UK Internal Market Bill Notoriously known as the Brexit Bill, its design addresses two important issues. Firstly, to release the British government from having to notify Brussels of any state aid decision, including those that relate to businesses in Great Britain. Secondly, it would enable the free flow of goods and services across all countries of the UK after we leave the EU’s single market and custom’s union on 1st January 2021. The Bill breaches part of the withdrawal agreement and breaks international law but without it British businesses could face more interruption.

4. Deregulation Bill Unnecessary bureaucracy costs British businesses millions each year. This Bill aims to overhaul the Deregulation Act 2015 which was part of the government’s drive to cut through burdensome red tape. Again, no details as yet but with any luck it will reduce some hoop-jumping.

2. Goods Mortgage Bill A revamp of the Bill of Sale Act 1878 which is considered too complex and costly. Here ‘goods’ cover moveable, tangible property such as cars and equipment. Goods mortgages could be used by businesses borrowing over £25,000 to secure running-account credit. They might also appeal to High Net Worth Individuals who are often asset-rich and cash-poor. When published, Members would do well to study the details of the Bill as they may find it provides a useful, alternative way of securing finance for clients. 52 | NACFB

5. House in Multiple Occupation Bill Look out landlords, if passed into law this Bill will increase the penalties for contravening HMO licensing rules. Expect larger fines, revoked licences and difficulties getting finance. Buy-to-let brokers should be sharing news of this pending legislation with clients to demonstrate that they are always on the lookout for new rules which might affect business.

Not the end, nor the beginning of the end. In our 60 years of pioneering Asset Based Lending we’ve seen our share of ups and downs. As we all move to unlock we are still here and ready to help you and your clients come back stronger. Let’s talk: 0208 572 7474


Five Minutes With

​ ive F Minutes with: Jamie Thompson ​​Jamie Thompson Key Account Manager Fleximize Describe your role in ten words or less? Finding the harmony between the client, broker and Fleximize.

How do you make a difference? I’m relationship driven and focus on what’s needed by all parties to get the best outcome. I can have a rather ‘out there’ approach but will always come back to the point and get the deal done.

In your view what are the key elements to a successful deal? Transparency and honesty. I also think most people thrive off a little pressure, be it a time constraint or knowing there are a few quirks to the deal. These deals always seem to be the smoothest in the end as everyone from client to introducer, all the way to my credit committee, seem to naturally pull together.

If you were to start your own small business, what would it sell? I’d love to use travel as a means of breaking down boundaries. I’d set up a hostel in Goa, where guests pay what they think the service is worth, be it the room or the food. It would have an honesty bar and 54 | NACFB

incorporate the local community for fishing trips, where you catch your supper and tip the locals for their time/experience. It would be called “As You Like” which is a phrase you hear quite a bit when backpacking!

Encourage an individual to express themselves by being themselves. If things come naturally and are not forced, there will be a better harmony. If you enjoy what you do, you will succeed.

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

What has been your lockdown essential?

Know your client. Don’t be a churn and burn. You will grow with your client and if you form a bond, you have a client for life.

What are the key elements to maintaining a strong lender/broker dynamic? Not being too serious. We are all under pressure, so if you can take a step back and have a bit of a laugh with each other, things seem to naturally fall into place. The deals run smoother and it’s easier to roll with the punches too.

What is your favourite piece of management/leadership advice? Know what makes each individual tick and spend time really driving them forward by using this to a mutual advantage.

Delivering a daily dose of odd – be it dressing as a pirate for a day to work from home, singing a bit of karaoke down the phone, or just finding an adventure out of the mundane.

What changes do you hope to see in the 'new normal'? I think we need to utilise people’s abilities to work remotely moving forward.

Which person has inspired you the most? My father – I’ll leave it there but ask sometime over a beer.

What was the last great book you read? The Beano Annual 1988 or anything by Chuck Palahniuk.

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