Commercial Broker (NACFB Magazine) - April/May 2024

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Adrian’s Note

Adrian Coles

Interim Chair | NACFB

Welcome to a significant edition of the NACFB’s Commercial Broker magazine – our first-ever digitalonly issue. The hard copy magazine will return in the summer, and this online issue is part of a trial to ascertain how best to engage with an evolving broker market. Speaking of changes, I have stepped up from my role as Vice Chair of the trade body to serve as your interim Chair.

It’s an incredibly exciting time for us at the NACFB, and I look forward to leading us through this period of change. Norman Chambers will return to introduce the summer issue of the magazine, but I thought it appropriate to share this news myself. I also wish to acknowledge Paul Goodman, who has stepped down as Chair. Paul has made valuable contributions during his tenure, and the board of directors and I extend our best wishes for his future endeavours.

Looking ahead, the NACFB remains committed to advancing and supporting the broker community. We will continue to provide updates on how we are evolving to meet both your needs and the broader industry challenges.

Back to this magazine issue, which sees us examining key developments in motor finance and explore the varied perspectives on the use of Personal Guarantees in SME lending. Both topics are crucial for understanding the need for greater clarity within what is becoming an increasingly complex regulatory landscape.

For all of us, change represents both a challenge and an opportunity. Our ability to adapt positively is what distinguishes us in a dynamic environment. By seeking to embrace change, we strengthen our commitment to innovation and collective growth. Let’s continue to move forward together – as only our community can – whilst fostering a resilient and thriving commercial broker market.

Unlock capital tied up in your client’s assets

• Greater flexibility on primary asset type

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• Documentation for OPCO/PROPCO funding

• Dedicated Relationship Manager

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NACFB unveils charity partner for 2024

Association to support air ambulance services across UK

The NACFB’s 2024 charity partner has been revealed as Air Ambulances UK, the national charity supporting the lifesaving work of the UK’s air ambulance charities, enabling them to save even more lives every day.

Chosen by the trade body after learning how the Lincs & Notts Air Ambulance was able to support one of the Association’s colleagues, a fundraising target of £15,000 has been set. An Enthuse page has been set up to collect donations.

In addition to raising funds, the NACFB plans to help increase local and national awareness of the charities’ essential pre-hospital, critical care. Throughout the UK, air ambulance services are collectively dispatched more than 107 times each day, bringing the emergency department to patients who have suffered a life-threatening or life-changing trauma or medical emergency.

Commenting on the partnership, NACFB managing director, Norman Chambers, said: “Anyone, anywhere, can become a patient at any time and each mission costs on average £4,510 which is funded almost entirely by public donations. Our support will help to fund not only

these missions, but also innovation and development to ensure the air ambulance charities can continue to provide a world-class service across the UK.”

A variety of special fundraising activities will be held at all the NACFB’s annual events throughout 2024 including the NACFB Commercial Finance Expo in June, the Commercial Broker Awards in September and the Commercial Lender Awards in November.

Association Members, Patrons and other Partners will also be encouraged to come up with their own fundraising ideas and participate in the activities organised by the both AAUK and the local air ambulance charities across the UK.

The NACFB community has raised in excess of £100,000 for good causes over the last five years, including The Newman Holiday Trust and Young Lives vs Cancer (formerly CLIC Sargent).

Anyone wishing to donate, can do so here: airambulancesuk.enthuse.com/cf/nacfb-2024

Has spring finally sprung?

Spotting positive signs in UK plc

WDave Furnival Head of broker NatWest

ith the long winter somewhat behind us, the UK economy is showing some of the welcome, green shoots of spring.

The latest NatWest Regional PMI® survey suggests most areas of the UK enjoyed a positive start to the year, with business activity growth broadening and local labour market trends generally improving. Business confidence also picked up in 11 out of 12 geographies in the UK.

Unsurprisingly, London (index at 57.1) once again recorded the strongest growth, followed by Northern Ireland (56.6). There were renewed expansions in the South West (51.2), Wales (50.3) and the North East (50.2). Only Yorkshire & the Humber (46.9) went against the trend, recording a second straight monthly contraction.

What does this mean for the prospect of lower interest rates?

With inflation falling, our prediction is for 100bp of cuts this year (possibly in two 50bp steps), with a further 50-75bp in 2025. That means we could see a base rate of 3.5% next year.

Might this be a further push for businesses to invest?

Of course, we can’t talk about this without referencing economic confidence, demand and recent developments with personal taxation, and National Insurance in particular. In what was touted as probably the last Budget before a general election, Chancellor Jeremy Hunt focused squarely on reducing taxes. Thankfully markets were far calmer than in the aftermath of the September 2022 mini budget under Liz Truss, which affected many of us – a sign, perhaps, of fiscal responsibility calming the economic waters.

But aside from the reduced tax burden, what else should brokers take from the Spring Budget?

A big factor that informed proceedings was the news that there are now more people in the UK economy than we thought. This is due to higher net migration than expected over the last two years. Setting aside the politics of migration, a larger population is a boost to the economy because more people will be in work.

Given our falling inflation figures (currently under 4% from the highs of 10%+ not long ago), Hunt had the ‘headroom’ to enact a budget that both helped the economy and obeyed a sacred fiscal rule: that national debt as a proportion of GDP should start to fall within five years.

So, could this be the end of the cost-of-living crisis, and by extension the cost-of-doing-business crisis? I certainly think so. And with business owners and managers less distracted by the spectre of inflation, their thoughts may turn to investing for the future. That’s good news for brokers, as well as the economy.

Industry News

1. Entrepreneurs still hesitant to borrow from banks

Small businesses are still hesitant to borrow money from banks for expansion due to the lasting impact of the 2008 financial crisis. Tessa Clarke, a member of Rishi Sunakʼs SME Council and co-founder of Olio, stressed that not seeking bank lending is a missed opportunity for some businesses, as venture capital may not be suitable for all. The Federation of Small Businesses has reported a decline in banks accepting loan applications from small businesses. Net bank lending has also decreased, according to the British Business Bank.

3

3. Poor April weather blamed for drop in sales

Dismal weather and an early Easter bank holiday have been blamed for a 4% fall in retail sales in April compared with the same period last year. Food sales rose 4.4% year-on-year, while non-food sales fell 2.8% for the same period. Linda Ellett at KPMG, said: “The positive sales figures seen in March due to an early Easter demonstrate the importance that triggers such as warmer weather, events and occasions can have in helping to deliver the necessary impact required to get consumers spending again.” 2

2. Brighter outlook to boost house prices by 2.5%

Property firm Savills predicts that house prices will rise by 2.5% this year, a more positive outlook compared to their previous forecast of a 3% fall. This prediction aligns with Lloyds which also anticipates a rise in prices. Lucian Cook, head of residential research at Savills, attributes the improved outlook to lower mortgage costs and a more stable market. Savills also projects a long-term increase of 21.6% by the end of 2028, equivalent to £61,500 added to the value of a typical £285,000 home.

4. Export credit agency to expand small business support

UK Export Finance has announced plans to increase its support for small and medium-sized enterprises (SMEs) to 1,000 a year by 2029. The agency aims to provide more guarantees for working capital and trade finance, help small companies access other business finance, and support their efforts to win work on UKEF-supported projects overseas. The expansion is expected to help UK companies secure £12.5 billion in export contracts and provide £10 billion of “clean growth” financing over the next five years.

5. UK services sector hits highest level of growth in a year

The S&Pʼs purchasing managersʼ index (PMI) for the UKʼs services sector jumped to 55.0 in April, the highest level since May 2023. Improvement in the economic forecast was frequently mentioned as a driving force behind Aprilʼs strong sales but several UK services firms pointed to a 10% surge in the national minimum wage as the main cause of the inflationary pressure. “The latest survey results are consistent with the UK economy growing at a quarterly rate of 0.4% and therefore pulling further out of last yearʼs shallow recession,” said Tim Moore from S&P Global Market Intelligence.

6. OECD: UK economy to be worst performer in G7

The Organisation for Economic Co-operation and Development (OECD) has downgraded its forecast for UK growth from 0.7% to 0.4%.

The UK economy is expected to experience sluggish growth over the next two years, falling behind its G7 peers. The report predicts that in 2025, UK GDP will rise by 1%, placing it at the bottom of the G7 nations.

The OECD suggests that higher wages could contribute to inflationary pressure. The report stresses the need for fiscal prudence and recommends directing government spending towards supply-enhancing investment.

7. FCA running out of allies in name and shame row

The CEO of the Financial Conduct Authority (FCA) has been summoned to appear in front of a House of Lords committee as a row over the regulator’s plans to “name and shame” financial services firms under investigation spirals. Nikhil Rathi has defended the plans arguing that being more transparent about probes will serve as a deterrent. The City roundly condemned the move and the Chancellor also stepped up and urged the FCA to rethink its plans.

Adopting a challenger mindset

Big

banks can be agile too

HIan Coulson Head of Commercial Brokerage HSBC UK Bank

SBC is one of the most recognisable brands in financial services. We’re known not only for our iconic buildings in London and Hong Kong but also for our prominent presence on Britain’s high streets and airport concourses. Our unmistakable hexagon logo is visible across the 62 countries in which we operate. However, historically, we have been less associated with the commercial brokerage sector here in the UK. Traditionally, our commercial business – particularly in the SME market – has thrived through longstanding relationships with clients and key business introducers, a strategy that has been fundamental throughout our 158-year history.

Despite the success of these traditional routes, we have observed a significant shift in consumer behaviour over the last decade. As many of you will know firsthand, business owners are increasingly seeking choice, market impartiality, and the best deals to fulfil their needs. With a growing number of lenders available and business owners becoming more time-poor, engaging a broker to find the right solutions has become a logical choice for entrepreneurs, managing directors and founders.

A test and learn approach

In recognition of this trend, when we were approached by the NACFB in 2021 to consider entering the broker market, we decided to launch a small pilot. I head-up our commercial brokerage team and I saw this as a great opportunity for us to create a true test and learn environment. The NACFB were supportive and understanding and partnered with us to ringfence a trial that would enable us to not

only test the waters but also develop processes and our own internal understanding of the intermediary route to market.

The early feedback from this initiative was eye-opening, highlighting several areas that weren’t quite right for the brokers we aimed to serve. We adapted swiftly, and refined our approach based on this invaluable input, which continues to underpin our ongoing expansion.

The NACFB pilot not only enhanced our offerings but also deepened our understanding of the broker market. The feedback was overwhelmingly positive, with brokers appreciating our entry into the market and showing keen interest in what we had to offer. However, it was also clear that brokers already had great relationships with many lenders and were operating successfully with them, so our success

“The

NACFB were supportive and understanding and partnered with us to ringfence a trial that would enable us to not only test the waters but also develop processes and our own internal understanding of the intermediary route to market

“This challenger mindset is characterised by a willingness to innovate and adapt, traits typically associated with newer, more agile companies in the financial sector, rather than a venerable institution like ours

was not guaranteed. This realisation led us to adopt a challenger mindset, focusing on leveraging relationships through our 15 dedicated relationship teams across Great Britain and Northern Ireland.

This strategy involves taking a holistic approach with brokers, aiming to bring more of our bank’s capabilities to them. This collaborative strategy enables brokers and their clients to ‘think outside the box’ to find the most suitable solutions, whether through different funding structures, tenors, or tapping into our international connectivity and product suite. This approach not only provides bespoke solutions for clients but also enhances the support given to brokers, helping to solidify these relationships.

From pilot to national roll out

The success of the pilot led to the formal launch of our broker team in 2023. Since then, we have delivered over £150 million in new lending and are aiming for further growth this year. We continue to work closely with the NACFB, exploring new products to expand our offerings, with plans to roll these out later in 2024. Additionally, we are investing in our people, having recently recruited a team of business development directors with national coverage to complement the relationship teams and accelerate our growth.

Despite transitioning to a more formal proposition, maintaining a challenger mindset remains fundamental to what we aim to achieve. The ongoing feedback from the broker community has been key to the development of our proposition and success to date. Building on these solid foundations is crucial to our future success.

Adopting a challenger mindset is central to how we approach the broker market. This challenger mindset is characterised by a willingness to innovate and adapt, traits typically associated with newer, more agile companies in the financial sector, rather than a venerable institution like ours. Despite our high-street legacy, our moves into the broker channel are relatively new, providing us with a unique opportunity to blend the robustness of established banking practices with the nimble, client-centric approaches of modern finance.

As we move forward, we remain committed to redefining our role in the commercial brokerage sector, providing innovative solutions that meet the evolving needs of brokers and their clients. Our engagement with the broker community continues to inform and refine our strategies, ensuring that we not only meet but exceed the expectations of those we serve. By fostering strong, productive relationships and remaining flexible in our approach, we are setting a new standard in the industry, one that aligns with the modern demands of commercial finance.

Looking down the road

2024 is a seismic year for the motor finance community

AJames Hinch Head of Compliance NACFB

s 2024 unfolds, the motor finance community continues to navigate a path marked by increasing complexity and uncertainty. The year began with a significant development, as the Financial Conduct Authority (FCA) announced increased scrutiny over the intermediary-led lending sector, focusing specifically on historical motor finance discretionary commission arrangements (DCAs). The regulator’s move signals a shift towards more rigorous oversight and sets the stage for a year filled with both challenges and changes.

As the regulator progresses further into its review – scheduled to conclude in late September – there’s a growing recognition that a thorough understanding of the sector’s intricacies and its transactional efficiency is crucial. There is concern among industry professionals that if the findings are based on misconceptions about the sector, the resulting regulatory measures – however well-intentioned –could be overly punitive and ultimately detrimental.

Applying the brakes

Let’s go back to the start of the year. The FCA’s decision to invoke its powers under section 166 of the Financial Services and Markets Act 2000 was prompted by what it viewed as ‘persistent issues’ in the motor finance sector. Despite a ban on DCAs in 2021, aimed at eliminating

incentives for brokers to increase the interest rates customers pay, complaints continued to be received, with customers seeking compensation for agreements made before the ban. The scope of the regulator's review covers sales going back as far as April 2007, notably including periods before the FCA assumed regulatory oversight of consumer credit firms in April 2014.

There’s no denying it, the implications of the FCA’s review are significant. The regulator's findings from these investigations could lead to widespread industry repercussions, including fears of potential compensation on a similar scale to the payment protection insurance (PPI) scandal, although they have subsequently moved to dismiss such comparisons. Naturally, this has raised concerns about the consistency and efficiency of complaint resolutions and the overall impact on market integrity.

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By assessing historical practices, the FCA say they are seeking to establish a framework that prevents the recurrence of past missteps and enhances consumer protection

At the time of going to print, the FCA had reminded motor finance firms about their requirement to maintain adequate financial resources at all times

At the time of going to print, the FCA had reminded motor finance firms about their requirement to maintain adequate financial resources at all times, in the light of several lenders reserving millions of pounds in case of widespread compensation demands after the review of car loan commissions. It suggests that the regulator is concerned that there could be some lenders left in financial difficulty, or that go bust, if they were hit with huge compensation claims.

Moreover, the FCA has implemented a temporary pause on the eight-week deadline for motor finance firms to respond to relevant customer complaints, extending this period to 37 weeks. This pause applies to complaints about motor finance agreements where a discretionary commission arrangement existed between the lender and the broker, covering complaints received by firms from 17th November 2023 to 25th September 2024. Additionally, consumers now have up to 15 months to refer their complaints to the Financial Ombudsman Service (FOS), rather than the usual six months, for complaints within a specific timeframe.

Fleet of foot

This regulatory shift is not just about managing past issues but is also a forward-looking measure aimed at refining the future landscape of motor finance. By assessing historical practices, the FCA say they are seeking to establish a framework that prevents the recurrence of past missteps and enhances consumer protection. This is crucial, as motor finance, like most types of consumer credit, is not covered by the Financial Services Compensation Scheme.

The Financial Ombudsman Service (FOS) has already played a critical role in this evolving scenario by siding with complainants in several cases, highlighting the ongoing challenges within the sector. These decisions underscore the perceived conflict of interest posed by discretionary commissions, which were suggested could incentivise brokers to prioritise their earnings over the best interests of their clients.

The sector has also seen a rise in county court cases related to DCAs, with varying outcomes. These cases often revolve around whether customers were adequately informed about the commission structures and the terms of their finance agreements. Recent rulings have provided some clarity, although they often very much reflect the complexity of assigning responsibility in such disputes.

Some brokers might be wary of potential repercussions from the FCA review, including financial compensations. It is important to understand that the regulator meticulously assesses all outcomes. Is it right to demand compensation from firms that had adhered to the regulator’s guidelines at the time? Whilst firms can draw on broad principles, they largely depend on subsequent rules to guide their interpretations.

Wheels in motion

In response to these developments, the NACFB’s compliance team has created a custom guide to assist brokers in navigating the regulatory changes. The bespoke guide offers detailed insights into handling complaints during the interim period governed by the temporary rules.

It is crucial for brokers to familiarise themselves with these guidelines to effectively manage potential disputes and maintain compliance with the evolving regulatory framework. By embracing these guidelines and continuing to prioritise the interests of consumers, brokers can contribute to a more transparent, fair, and efficient lending environment.

As we move forward along the road, the intermediary-led lending community should continue to remain vigilant and adaptable to the evolving regulatory landscape. There will no doubt be further twists and turns but the NACFB’s guidance will adapt to support the best interests of the motor finance broker community.

To request your copy of the NACFB’s guidance for motor finance brokers, please email compliance@nacfb.org.uk

Forging new paths Q &

When called upon, the British Business Bank’s team stood up and delivered various Covid-19 loan schemes in record time, schemes that were directly responsible for supporting UK SMEs in their darkest hour. Industry stalwart Bernie Skivington, the Bank’s director, head of origination and relationship management, reveals their direction of travel.

Could you tell the NACFB’s community more about moving from the Recovery Loan Scheme to the Growth Guarantee Scheme?

In the Spring Budget the Chancellor announced the extension of the Recovery Loan Scheme for a further two years, but to be renamed the Growth Guarantee Scheme. The Recovery Loan Scheme supported access to finance for UK businesses as they recovered through the Covid-19 pandemic. The Growth Guarantee Scheme will build on this, helping smaller businesses to access the right type of finance they need to now grow and thrive. The terms of the scheme will be unchanged, so we expect the transition to be relatively smooth for the lenders.

What key takeaways or learnings did the Bank pick up from the Covid era?

The Covid-19 loan schemes and the ongoing success of the Recovery Loan Scheme demonstrates that when needed at such times of extreme crisis or due to gaps in the market, the British Business Bank and

the UK’s financial services providers can work together to meet the needs of smaller businesses. There were challenges with the urgent need and fast roll-out of the schemes, not least with Bounce Back Loans, but the takeaways on minimising fraud while still delivering at pace will put the country in a better place, should the need for such emergency schemes arise in the future. 85% of the Bounce Back Loans borrowers were first time commercial borrowers, and while they have performed better than expected, it is also worth noting how their business models have evolved and their expectations regarding funding have changed.

How can brokers engage with the new Growth Guarantee Scheme?

I’d encourage brokers to make their clients aware that lenders have the opportunity to call on the Growth Guarantee Scheme and help them understand that the scheme gives opportunities to source affordable finance where they might not think it was there before. For example, supporting sustainable business investment opportunities. Hopefully the change of name will make it easier to get across what the scheme is for! It’s also a lot easier to apply for than businesses might think, with only a few forms needing to be filled in.

How has the funding ecosystem in the UK transformed since the 2008 banking crisis?

with less reliance on the ‘big five’ banks. You can see that in the lending figures for 2023. For the third consecutive year, challenger and specialist banks account for a higher share (59%) of total gross lending than the big five banks (41%). 60 new banking licences have been granted in the last decade, with 36 being issued to providers serving smaller businesses. We’re proud to have supported a third of those 36, while we have also successfully achieved diversification through our programmes partnering with many non-bank financial institutions. Across our debt and equity programmes the Bank now has established partnerships with some 200 financial institutions.

Looking ahead, what new initiatives or areas is the Bank eyeing to help UK businesses, especially in emerging sectors?

A

The biggest change has been that the funding ecosystem has become far less concentrated,

I’ve mentioned the Growth Guarantee Scheme which we will continue to evolve, for example to potentially offer a variation that facilitates increased ‘green’ investment by smaller businesses transitioning to and helping to grow the UK’s net zero economy. The Mansion House reforms announced by the Chancellor last year address an issue that we have long identified – a lack of UK institutional money being invested in our growing businesses. Many of these businesses are in the type of sectors that will produce the world-beating businesses of tomorrow. To support this, a proposed Growth Fund will draw on a permanent capital base of over £7 billion, and we are working closely with industry on the design of this investment vehicle.

JFlexing for success

A new mortgage for a changing environment

Andrea Glasgow Sales Director, Specialist Mortgages Hampshire Trust Bank

ust as a chameleon changes to its environment, our three in one Flex Tracker aims to empower borrowers to seamlessly navigate the ever-changing mortgage market.

Recent years have seen so much uncertainty within the financial and property markets that investors have frequently had to change their plans, and adapt their strategies as they have been faced with fluctuating interest rates and house prices.

Doing so can prove both difficult and expensive with traditional mortgage products, a situation which the team here at HTB has tackled through the launch of the new Flex Tracker. It’s a flexible commercial mortgage borne out of insight from brokers across the UK to give investors and developers short-term flexibility.

So, what is the Flex Tracker?

The Flex Tracker mortgage is available for those looking to borrow against buy-to-let or semi-commercial properties. It’s as flexible as 1-2-3…

1. Track – As the product is a discounted tracker, borrowers will benefit if interest rates are reduced, as is generally expected to be the case this year.

2. Fix – At any point borrowers can switch onto a new business fixed rate from HTB, without having to pay an early repayment charge, even if they switch during that initial two-year discounted period.

3. Sell – ERCs will also be waived if the client opts to sell the property during the initial two-year discounted period.

The Flex Tracker is a new specialist mortgage that combines the advantages of a tracker mortgage with the option to sell the property or switch to a fixed term within two years, free of early repayment charges (ERCs). This design benefits investors, allowing them to benefit from potential decreases in rates or to opt for a fixed rate or sell without financial penalties. It provides flexible financing tailored to investors’ changing needs.

Who's going green for the Flex Tracker mortgage?

Intermediaries have reacted warmly to the launch of the Flex Tracker. Steve Williams, owner of adviser Redgate Specialist Finance, described the product as an important mortgage innovation for brokers and their clients: “It allows a simple and cost-effective move across to a fixed rate during the first two years, so avoids clients locking into long-term debt at the wrong time.”

Made for brokers, built by experts

The Flex Tracker is the result of conversations with our broker partners across the country. They were clear about the need for a flexible product like this, which actively supports investors in a range of different situations, and who want to be able to adapt their plans without being punished financially. As a lender committed to delivering innovative solutions for our clients, we put those conversations to use in the design and pricing of our mortgage products and services.

Your go-to lender for complex buy-to-let and semi-commercial mortgages.

With award-winning service, extensive product range and evolving criteria, we help you deliver the funding your landlords and professional investors need. Our specialist residential and semi-commercial loans from £100k – £25m suit even the most extraordinary clients and properties. Discover

IUnseen chains?

The hidden impacts of Personal Guarantees on SMEs

Norman Chambers Managing Director NACFB

n the lead-up to last year’s festive season, the Federation of Small Businesses (FSB) triggered a critical mechanism within the UK financial regulatory structure: a super-complaint. What is a super-complaint I hear you ask? Well, you are right to query, as the mechanism is seldom used and was a new one to me.

A super-complaint is a very powerful tool, one designed to fast-track any significant issue raised by designated consumer groups. In this instance, one was employed by the FSB to spotlight the ‘strenuous demands’ placed on small business owners by banks, particularly with the insistence on the use of personal guarantees (PGs).

In the coming pages we’ll step through the nature and details of the complaint, collate industry views, and explore as to why the use of PGs and the proportionality remains such a balancing act for lenders and borrowers alike.

The heart of the matter

Put simply, the FSB’s complaint sought to highlight the onerous conditions that they believe force some business borrowers to back loans with personal assets, such as their homes. Such a requirement, they argued, remains a significant barrier to SME growth, locking businesses into a “straitjacket” of financial caution, one they outlined as particularly burdensome – considering some of those entities operate under limited liability.

The core issue, according to the FSB, is the deterrent effect of PGs on loan applications. In a detailed document, the FSB presented their argument – which appeared to rely more on anecdotal evidence than quantitative data. They expressed a foundational belief that entrepreneurs, fearing personal liability, might well forego any borrowing or adopt an excessively cautious approach to business operations to avoid triggering the guarantees. They outlined that for some SME borrowers, the mere presence of a PG fosters a culture of conservatism – one that stifles business dynamism and innovation. Furthermore, on the occasions when defaults occur, the financial and emotional distress experienced by individuals and their families is often disproportionate to the lender’s actual risk or loss.

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The outcome of this supercomplaint could well start the process of redefining the landscape of small business finance in the UK, influencing both future regulatory policies and the operational strategies of SMEs

In the many conversations the NACFB has had across industry stakeholders of all varieties, the FSB’s move left many perplexed. The issue had not been one that was particularly on the industry radar, that’s not to say the FSB were without merit, just that there was a general feeling of it coming somewhat out of the blue. The ideas put forward by the FSB and the calls for a more proportionate approach to the use of PGs do – at surface level – appear entirely rational. There are however considerations and nuances that muddy the waters somewhat, but we’ll return to those a little later.

The fall out

The regulator isn’t one to take super-complaints lightly, and the Financial Conduct Authority (FCA) responded with a pledge to undertake a review. Their investigation, scheduled to start with data collection on loans below £25,000 and conclude in June 2024, seeks to ascertain both the prevalence and impact of PGs in the SME lending space.

At the time of writing, the FCA’s review is still in progress. However, indicators of a prompt resolution that satisfies all parties were dealt an early blow. In a stern letter addressed to Sheldon Mills, the FCA’s competition chief, Martin McTague, the national chair of the FSB, expressed significant concerns about the FCA’s approach. McTague criticised the FCA for its narrow focus, which he argues deliberately excludes over a million limited company directors in the UK, thereby risking the loss of confidence from the small business sector. He articulated that while personal guarantees can be beneficial for business lending when used appropriately, their excessive application, especially towards limited companies, could stifle investment and subsequently lower productivity.

To its credit, the FCA acknowledged the limitations imposed by its regulatory boundary, stating that its “ability to investigate and

act is restricted” within these confines. But the exchange highlights a growing tension between the FSB and FCA. Indeed, Craig Beaumont, chief of external affairs at the FSB, did not mince his words in response to the regulator: “It’s a ‘not me, Guv’ approach to regulating; a missed opportunity to improve the lending market… now the FCA has said it’s walking off the pitch.”

What we know

In response to the FSB’s super-complaint, various industry players, including the NACFB, mobilised to collect and analyse any available data that could help shed light on the actual usage of PGs and their impact on SMEs. Among the data gathered, insights from Purbeck Personal Guarantee Insurance, the sole UK provider of insurance for personal guarantees, illustrate a notable uptick in the demand for Personal Guarantee Insurance (PGI). In the first quarter of 2024, there was a 49% increase in small business owners seeking PGI, with many securing loans to sustain their business operations. Their data seems to suggest a heightened awareness and concern among business owners about the risks associated with personal guarantees.

Further detailed analysis from Purbeck reveals several critical trends: the average PGI commitment required by lenders escalated by 11% to £157,285 from the previous year, indicating an increase in the financial burden on entrepreneurs. The data also shows a significant shift in the purpose of the loans, with 37% of applications in Q1 2024 aimed at securing working capital – the highest proportion ever recorded. This shift may reflect the immediate financial pressures faced by businesses seeking to maintain operational stability rather than investing in growth initiatives, which saw a slight decline.

Additionally, the proportion of PGI applications for unsecured loans reached a new high at 46%, underscoring the increasing reliance

“Whilst PGs serve as critical tools for risk management, enabling lenders to extend credit under more favourable conditions, there is a clear and pressing need to ensure that these guarantees do not become prohibitive barriers to growth

on personal guarantees as a security measure by lenders. Todd Davison, managing director of Purbeck, emphasised the implications of these findings for both the FSB and the FCA. He noted what many brokers and lenders already know; that PGs are becoming increasingly integral to small business lending.

Davison called for something of a re-evaluation of the appropriateness and proportionality of personal guarantees relative to the loans offered. He advocated for enhanced education for business owners – and their broker advisers – on the risks associated with personal guarantees and the available mitigation strategies (more from Purbeck can be found on p. 50).

As the FCA continues its investigation, the data provided by Purbeck and similar entities will be crucial in informing potential regulatory adjustments to ensure that personal guarantee requirements are both fair and justifiable.

Striking the right balance

The somewhat tense standoff between the FSB and the FCA is likely to continue throughout the year. The debate thus centres on whether the inclusion of PGs within a stricter regulatory framework could alter lenders’ reliance on them, potentially leading to a more balanced approach to business lending. Such a shift could significantly impact lending practices, fostering a more competitive and less restrictive lending environment.

The challenge lies in finding an equilibrium that promotes responsible lending whilst protecting the interests of SMEs. In the current

economic climate, the potential regulation or refusal of PGs to secure debts could lead to several outcomes, including reduced availability of unsecured lending for businesses lacking substantial capital or assets. Counterintuitively, there is a real possibility that moves to redress could significantly limit SMEs’ access to a broader range of lenders and competitive rates.

Conversely, the absence of PGs might encourage riskier business practices or, in extreme cases, expose lenders to fraud. Nonetheless, the fear of increased fraudulent activity should not overshadow the potential benefits of reducing personal liability for business owners.

The implementation of any new regulations would require significant resources and oversight, possibly increasing the costs for financial institutions – costs that may ultimately be passed on to businesses. Thus, striking the right balance is essential to avoid exacerbating the financial pressures on SMEs, many of whom are already having to contend with numerous other economic challenges.

A complex task ahead

As the FCA wades further into the PG issue, it must also consider a broad spectrum of economic indicators and sector-specific dynamics. The outcome of this super-complaint could well start the process of redefining the landscape of small business finance in the UK, influencing both future regulatory policies and the operational strategies of SMEs. It would be hard not to look at the fall out from this issue, as well as the FCA’s review into the motor finance space (more on p. 14) and draw the conclusion the current opaqueness of the regulatory perimeter will only result in more stand offs as other challenges emerge.

Whilst PGs serve as critical tools for risk management, enabling lenders to extend credit under more favourable conditions, there is a clear and pressing need to ensure that these guarantees do not become prohibitive barriers to growth. The NACFB has recognised the importance of ensuring that PGs are used judiciously, and advocates for a balanced approach that protects both the financial health of borrowers and the interests of lenders. This approach helps maintain vital ‘skin in the game’ for borrowers, ensuring a mutual commitment to the success of the business venture.

With the FCA review ongoing, the importance of brokers in this ecosystem becomes increasingly evident. Commercial intermediaries play a pivotal role in informing and guiding their clients through the complexities of commercial finance, particularly when it involves

personal guarantees. It is crucial that they continue to provide comprehensive advice on the nature of PGs, outlining the responsibilities and risks involved. This includes educating clients about risk mitigation strategies, such as personal guarantee insurance, which can make the prospect of accepting a PG more palatable.

Regardless of the outcomes from the FCA’s review, the imperative remains for brokers to ensure that small business owners are fully aware of what entering a PG entails. This level of transparency and education will be essential in fostering a robust and equitable commercial finance environment where small businesses can thrive without undue burden, and where lenders can operate securely within a framework that respects the challenges and aspirations of today’s entrepreneurs.

Do you care?

Keeping up with the growing demand for care homes

TDan Smith CEO Broadwood Capital

he ageing population in the UK continues to create challenges and opportunities for the care home sector. Crucially, the population of people aged 85+ is set to more than double in the next 25 years (from c.1.7 million to c.3.5 million) which will drive significant increases in demand for elderly care in the medium- to long-term. Whether the UK will be able to meet the demand remains to be seen.

The total supply of care beds in the UK today is around 460,000 and this has remained largely unchanged in the past 20 years. In fact, since 2018, research by Carterwood estimates there has been a net loss of around 7,000+ care beds in the UK. A greater number of older, outdated and not fit for purpose stock is closed each year than new homes are opened. Unless this trend is reversed, the UK will never be able to keep up with demand.

The operational market in the UK is very fragmented. It is estimated there are around 5,000-6,000 registered care home operators. The top five account for less than 15% of the total care beds, with the top 10 operators accounting for less than 20%.

Today care home occupancy is reported to be close to 90%. Average weekly fees across the UK are c. £1,125 per bed, with approximately 35% of residents paying privately for their own care. However, regional variations in private fees are widespread with higher rates being achieved in the south-east and in pockets of affluence in other parts of the UK.

Basic economics tells us that growing demand and static supply creates upward price pressure, so surely this market should be booming. If only it was that simple. Developing and operating in the sector requires knowledge, skill, experience, and comes with numerous challenges.

The planning process remains cumbersome. Carterwood data suggest there are around 250 applications for new care homes each year, with c. 80% of these being granted. However, once planning is achieved, the homes need to be built, and with all the difficulties associated with construction, only c. 60-65 new care homes (c. 4,250 beds) are actually delivered each year.

Building new care homes isn’t the only challenge for the sector. Care home providers must abide by the standards set out in the regulatory framework, deal with increasing costs, and manage a dearth of staff. As a consequence, investment activity in the sector has been subdued over the past 18 months with a notable reduction in forward funding and sale and leaseback. This creates more challenges for developers accessing funding and will inevitably lead to reduced starts.

However, in recent months there has been more activity from development finance lenders who are drawn to the strength of this alternative asset class and the premium returns on offer. Currently, we estimate there to be around a dozen active lenders and examples of 65%-75% LTGDV (loan to gross development value) being achieved.

The specialist nature of care homes can deter many lenders from entering the market. It is not straightforward. It is a specialist sector ultimately underpinned by operational real estate, governed by a regulated framework, with development and construction issues thrown in. However, for those lenders which understand this market – and for brokers too – it should present a real opportunity in the coming years.

What We Do

Asset backed SME funder

Lending up to £5m

Lending to every market sector

Regional presence throughout the UK

Finance Solutions for Property Investors and SMEs

Goodbye same old.

Hello new beginnings.

Welcome to Precise. Intermediaries only.

LUnlocking potential

Supporting struggling landlords

Tom Worbey Lending Manager Redwood Bank

andlords continue to face numerous hurdles in managing their properties effectively. Persistent high interest rates and volatile swap markets have been putting additional pressure on those looking to expand their portfolio and inhibiting business growth.

But there are grounds for cautious optimism, given the forecast of rate cuts and with inflation appearing to be under control, there is hope of increased stability in the market.

The increases in the Bank of England Base Rate from 2021-2024 undoubtedly impacted professional landlords and hindered any plans they may have had for expansion. The effects of the increased rate environment cannot be overstated. Landlords who took out a two-year fixed rate mortgage in 2022 or a five-year fixed in 2019 –when Base Rate was just 0.75% – will now be exiting on to standard variable rates upwards of 8%, or be looking to re-mortgage on to new fixed-rate products with pricing significantly higher than they will have been used to.

Pending legislative changes, notably the Renters Reform Bill, will add further challenges to property investors who may have to amend their tenancy agreements leading to further costs.

However, with the growth of limited company landlords continuing to increase year-on-year – more than 50,000 companies were set up in 2023 – there is arguably light at the end of what has been a very dark tunnel.

The UK property market has proven very resilient so far to the high-rate environment, and defied analysts’ early expectations. Recent data from Savills highlighted the lack of rental properties in the UK, suggesting that an estimated one million homes needed to be built by 2031 to help meet the demand. This shows that buy-to-let property remains a viable asset class with strong investment potential, despite the recent turbulence.

Affordability remains a primary challenge in the market, with those higher mortgage costs. Landlords are also having to manage tenancies with much more focus, given the impact of higher rental payments potentially placing tenants under further stress.

Legislative and regulatory changes continue to emerge as challenges, with the Government’s English Private Landlord survey highlighting

“Pending

legislative changes, notably the Renters Reform Bill, will add further challenges to property investors who may have to amend their tenancy agreements leading to further costs

“However, with the growth of limited company landlords continuing to increase year-on-year… there is arguably light at the end of what has been a very dark tunnel

that 55% of those landlords plan to decrease or sell all their rental property citing those developments as the reason for their decision.

Here at Redwood, we regularly hear about landlords who are struggling in the current climate, even if the future is looking more optimistic. It is a key indicator of where we sit in the market and our ability to find solutions for property investors facing issues.

Generally speaking, properties in the North appear more resilient to the impact of higher rates, being aided by higher yields and lower values, but we are seeing several cases where customers in the South are being negatively impacted by the current environment.

Customers with historically strong performing residential portfolios have had their Interest Coverage Ratio greatly reduced during 2023 and into 2024, and they are now facing challenges in generating the required leverage they need to further grow their portfolios and service the UK renters.

As highlighted in the Bank of England’s quarterly bulletin in December 2023, a significant portion of new buy-to-let mortgage originations are falling significantly closer to the regulatory minimum of 125% compared to previous years.

To support the sector, banks need to provide alternative options for landlords to aid their affordability.

Redwood has always championed professional landlords and is aiming to play its part by offering a higher fee, lower interest-rate product, allowing customers to make lower monthly payments with the option to reach the leverage they require to meet affordability requirements.

We’re very aware that some landlords can’t dramatically increase their rents to match a rise in interest rates and this inevitably leaves them struggling. It follows that their businesses are going to suffer.

If they do go ahead and pass the additional charges on to tenants, they can only do so once or maybe twice before they run the risk of tenants moving out when they can’t afford their higher rent. That leaves the landlord with empty properties, which proves equally costly.

While pricing remains impacted by wider swap markets and economic factors, banks should continue to assist customers through two other key areas, service and flexibility. Ranging from speed of offer for deal origination, to forbearance options for existing customers, the support banks can provide should be diverse to reflect the different issues facing our customers.

Expertise: whenever (and wherever) you need it

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Going the distance

The ambition, drive, and determination of UTB’s head of asset finance

Nathan Mollett, head of asset finance at United Trust Bank (UTB), exudes a calm yet intensely focused demeanour. With a solid career foundation, including a pivotal role at Metro Bank where he significantly expanded their asset finance operations, Nathan is as accomplished professionally as he is in his endurance running pursuits.

For beyond his responsibilities with the Leasing Foundation, the FLA, and his advocacy for diversity and innovation in asset finance, Nathan is an ultra-athlete. Indeed, his remarkable endurance was showcased earlier this year when he completed the Marathon des Sables Legendary, a gruelling 250 kilometre race across the Sahara, raising over £14,900 for charity.

In a revealing interview with the NACFB, we explore the multifaceted life of a man who excels in both the competitive worlds of asset finance and extreme sports. Nathan’s is a journey that exemplifies how resilience mastered in the harsh Sahara can translate into conquering professional challenges, revealing insights into the stamina required for both worlds.

Commercial Broker (CB): With such a distinguished career in the intermediated asset finance lending space, could you share how you got started, what has driven your career choices, and the most significant milestones you’ve encountered?

Nathan Mollett (NM): My career journey began at NWS bank, where the allure of commission-based sales soon drew me into the world of broking. I joined Syscap, a specialist in IT finance and professional loans, in the late ‘90s and spent 16 fruitful years there, culminating in my role as sales director. This period not only honed my skills but also ingrained a deep understanding of the challenges brokers face – from securing deals to ensuring customer retention – which later influenced my approach when I transitioned to the banking sector.

In 2015, I took a significant leap to join Metro Bank to establish their asset finance business. This move was a steep learning curve, transitioning from a broker to a regulated banking environment, which brought its own set of challenges, particularly around compliance and regulation. However, the supportive culture at Metro facilitated

my growth, and I embraced the opportunity to learn from seasoned experts in risk and compliance.

After six years at Metro, I joined UTB, where I am currently responsible for the asset, wholesale, block, and motor finance businesses. This role has been about leveraging UTB’s entrepreneurial spirit to expand our market presence, integrating innovative technologies to streamline operations and enhance broker interactions. The recent platform shift to Alfa and the integration of advanced tech have been pivotal, allowing us to scale effectively while maintaining the personal touch that our brokers appreciate.

CB: Given the evolving landscape of the asset finance sector, especially with increasing regulation and technological integrations, how do you see these elements influencing the industry, and what challenges and opportunities do they present?

NM: The asset finance sector has undergone significant changes during my tenure. The increase in regulatory demands is perhaps the most striking change, requiring both brokers and banks to adapt continuously to ensure compliance. This regulatory landscape is poised to become even more stringent, a trend that we’ve been preparing for at UTB by enhancing our oversight and review processes.

Technology’s role in this sector has been somewhat slower to develop compared to others, but it’s now picking up pace. We are actively rolling out APIs for proposal submissions to our top brokers, which is a change priority for us this year. Although technology has started to make its mark, especially in streamlining processes and improving efficiencies, its full potential, particularly in easing regulatory burdens and enhancing customer journeys, remains largely untapped.

The dynamic between lenders and brokers has also evolved. There’s a noticeable shift towards fostering stronger relationships and deeper understanding, which is crucial under the current regulatory pressures.

“ The emergence of "super brokers" has introduced a new power dynamic in the industry, where these entities wield significant influence due to their substantial transaction volumes

Moreover, the emergence of “super brokers” has introduced a new power dynamic in the industry, where these entities wield significant influence due to their substantial transaction volumes.

CB: As someone at the helm of a leading team in asset finance, how do you ensure your team stays ahead in this competitive environment, and what strategies do you employ?

NM: Our approach is centered on three key pillars: expertise, relationships, and consistency. We pride ourselves on our deep niche market knowledge, which allows us to tailor our solutions effectively and respond swiftly to market demands without unnecessary delays or queries.

Building and maintaining strong relationships with brokers is another cornerstone of our strategy. Unlike many in our field, we encourage direct interactions between brokers and our underwriting team, which not only speeds up the process but also enhances the quality of the outcomes. This unique approach is supported by a credit team that is notably larger than our sales team, underscoring our commitment to these relationships.

Finally, consistency in our service delivery ensures that our broker partners know what to expect from us at all times, which is crucial for building trust and reliability.

CB: Nathan, you’ve recently completed the Marathon des Sables, raising over £14,900 for charity. What drove you to tackle this incredible race?

NM: Participating in the Marathon des Sables was an extraordinary challenge and a profound privilege. The race itself is incredibly demanding, with temperatures soaring above 45 degrees Celsius, and the terrain varying from massive dunes to rugged mountains. Each stage presents its unique hurdles, and carrying all your survival gear throughout this ordeal truly tests your limits.

This year’s race was the longest in its history, spanning over 252 kilometres, which made it even more gruelling. Despite the harsh conditions, the motivation to raise funds for the South East Cancer Help Centre and Wings for Life was a powerful driving force. These charities are very close to my heart and knowing that every step was contributing to these causes made the immense physical and mental challenges worthwhile.

CB: How do you balance these demanding pursuits with your professional responsibilities?

NM: Balancing a demanding career with personal passions is indeed challenging. My approach is to integrate discipline and prioritisation in all aspects of my life. While my career and family take precedence, I ensure that my training for events like the Marathon des Sables does not interfere with these priorities. These races require significant mental and physical preparation, which in turn benefits my professional performance by enhancing my resilience and stress management skills. Moreover, these challenges are a powerful way to support meaningful causes through fundraising, adding a layer of personal fulfilment to the endeavour.

Donations can still be made to Nathan’s chosen charities online here.

Into the grey

The value of ‘grey belt’

OAlan Fletcher Partnership Director Invest & Fund

ne of the exciting traits of working in problem-solving fintech is that you often have a ringside seat to some of the most significant challenges of our time. By the very nature of the business, if you are doing it right, and you’re making an impact, you must be close to the problems to attempt the solutions. It’s evident to us that a nuanced and sensible conversation will soon need to be had on a national level around the Green Belt and the balance that must be struck between its preservation and the practical demands of the market.

The concept of a ‘grey belt’ is a bit of a misnomer; it doesn’t exist, albeit it references areas of the green belt that could be utilised for residential development. Knight Frank has reported 11,205 previously developed sites that could fall into this grey belt category, sites that could be repurposed to produce 200,000 homes. Sites that would benefit from regeneration, have a quantifiable effect on land acquisition, flattening out price inflation and opening opportunities for fledgling home builders, the types of enterprises heavily supported by the alternative lending market.

The value of development land in the UK is widely forecast to continue growing over the next 24 months, correlated with the overall rising value of the housing market and even though that has cooled of late, flattening out price inflation in land values will be a critical component in solving housing issues, if like ourselves you subscribe to the thesis that increasing the number of smaller homebuilders is vital to building more homes. Solving some of these national issues will reduce the financial barriers to entry for our client base, and in turn, more homes will be built.

It could be argued that on a national scale, these types of proposals, with a focus on disused car parks, derelict buildings and concrete scrublands on the outskirts of major urban conurbations, won’t have any noticeable effect on biodiversity. Still, measures must be moderated to prevent the green belt from becoming the new frontier and a gold rush from commencing; this can’t be a free-for-all, and the results of unchecked development could be catastrophic.

Twenty years ago, if people were discussing an opportunity to buy up the protected countryside to perhaps one day build on, it wouldn’t be taken seriously. Now, that unintended consequence also must be taken into consideration, and the whole process would need to be installed in a way as not to exacerbate land banking. It would be crucial that any Compulsory Purchasing Order (CPO) powers deployed put more opportunities into the system, push prices down, and stimulate the market for our clients and partners; the smaller businesses building the nation’s homes.

“ Twenty years ago, if people were discussing an opportunity to buy up the protected countryside to perhaps one day build on, it wouldn’t be taken seriously

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We work one-to-one with our broker partners so we understand your needs and your clients’.

Delivering an award winning service, we are committed to making things easier for you with a ‘can do’ attitude and products that fuel ambition.

Broker Sales Support: 01254 685850

Proposals: proposals@haydockfinance.co.uk

ABetter, faster, stronger

Tech is changing what asset finance brokers expect of lenders

Brandon Hall Head of Asset Finance Sales

Allica Bank

sset finance may still lag behind personal finance when it comes to technological innovation (I’m still waiting for the first virtual reality asset invoice and documentation portal) but the pace of progression has rocketed the past few years. And I don’t think it gets enough recognition.

The catalyst for this was the Covid-19 pandemic. With many businesses having to hit pause on trading, borrowing for investment was often put on standby, too. But, as businesses started to chug back into life again, the industry had to learn how to get on entirely remotely.

Technology suddenly became an integral part of lending, whether a business or broker wanted it to or not. Whether it’s speed, transparency or communication, it’s led to some significant jumps forward in the service brokers have come to expect from a lender. However, while I absolutely welcome this, it’s important we don’t lose sight of what truly makes the difference: relationships.

Going digital

One of the bigger changes brokers will have noticed is the use of auto-decisioning. Once a broker inputs information about their client and the asset they want to finance, the lender can use real-time data feeds to automatically gather information about a business and make a decision without any human input needed at all.

This can dramatically reduce the time it takes to find finance for a client, particularly for simpler deals. At Allica, for example, our auto-decisioning system means in some cases we can make an offer within seconds of the application being submitted.

The application process itself is also being made a lot simpler. Many lenders will now auto-fill much of an application for you once you put in the name or company number of your client. This is thanks to what’s called an API: a type of technology that allows lenders to read data held by Companies House in real-time. Alongside cutting out a tonne of manual data entry, it reduces the risk of human error.

Both of the above examples in part owe the pace of their widespread take-up to the effects of working in a national lockdown and the need for speed when the world opened back up. The same can be said for the greater transparency many lenders now offer through self-serve broker portals, allowing brokers to track and manage the progression of a deal online.

“

Technology suddenly became an integral part of lending, whether a business or broker wanted it to or not

“There’s only so much that automation, AI and algorithms can do. Tech might be able to easily assess a company’s financials, but can it understand the whole picture of a business plan and its opportunities?

People power

With all that being said, I know that the key thing for brokers when it comes to service will always be relationships. I’ve heard enough stories about lenders hiding behind technology, such as call queues or chatbots, when all you really want to do is talk to somebody.

Similarly, there’s only so much that automation, AI and algorithms can do. Tech might be able to easily assess a company’s financials, but can it understand the whole picture of a business plan and its opportunities? Sometimes, the best way to help a more complex client or push a deal over the line is simply to get someone on the phone.

That’s why, alongside developing our tech capabilities, Allica has continued to invest in growing our sales and operations teams. In 2023, we expanded our business development manager (BDM) team by 40% and grew our sales support team to 19, for example.

You only have to look at the results of our broker survey at the end of 2023 in which 95% of our broker panel said their Allica Bank business development manager was ‘good’ or ‘excellent’ to see how much people value them.

In my opinion, the best approach is a combination of the two: using technology to enhance our broker relationships, rather than replace them. By cutting out unnecessary manual work – for both brokers and the Allica team – more time can be spent on the more complex activities that only human interaction can solve. With speedier service, better communication and transparency, we can help you provide more clarity to your clients.

The best of both

This pace of technological change makes it an exciting time to be in asset finance. Working for the fastest growing UK fintech ever, I feel fortunate to be part of the vanguard of this change and am looking forward to sharing what else Allica has coming down the line.

Many of the technologies I’ve discussed are still only in their infancy, however. In particular, the application of AI, which has the potential to be absolutely transformative.

As these innovations mature and evolve, it’s vital that lenders don’t sacrifice the relationships and human decision-making that have been the lifeblood of the asset finance industry ever since it first emerged. I can promise you Allica certainly won’t.

AThe truth will out

Sorting financial product realities from greenwashing

Phillip Bate Director of Business Banking

Triodos Bank UK

s sustainability becomes a higher priority for both consumers and businesses, more and more brands are keen to highlight their environmental and social responsibility. But when it comes to financial products and services in particular, a lack of clear guidance on what makes something genuinely sustainable can make it hard to trust such claims – and to spot the truth from the greenwash.

The FCA has attempted to address this with its new anti-greenwashing rule, which aims to ensure that any sustainability-related claims about financial products and services are fair, clear and not misleading, and can be fully substantiated. While we await publication of the final guidelines, we do know the rule applies to any claims relating to the environment, biodiversity and nature, along with social impacts and corporate social responsibility.

All FCA-authorised firms will be subject to the rule, due to come into force at the end of May 2024, which is expected to relate to all communications about products and services that refer to sustainability: from statements, strategies, targets and polices to visual representations including images and colours.

The rule will require sustainability claims to be fully evidenced and the FCA will challenge firms it considers may be making misleading claims and take action where appropriate.

A welcome step

As a bank with sustainability integrated into the core of our business model, we support the need for clear requirements around greenwashing and for regulations that make it easier to find genuinely sustainable products and services. As the FCA has pointed out, if consumers – and businesses – know they can trust sustainabilityrelated claims, this will ultimately increase confidence in the sustainable finance market and encourage greater flow of capital into products that can genuinely drive positive change.

However, while the guidance will make it harder for financial services firms to make unsubstantiated claims relating to sustainability, it continues to place the burden on those working to make sustainable change, rather than increasing the requirements for overall transparency that would enable informed choices between products with positive and negative environmental impacts.

For now, the best way to get an idea of whether a product is genuinely sustainable is to look at a bank’s lending and investment portfolio as a whole. Are lenders transparent about where they lend money and what kind of organisations they support? Are environmental or social claims substantiated and applied across their operations and not just on specific products offered?

The FCA’s new rule is an important step in the right direction. We need tighter regulations, coupled with a shift towards greater transparency, which will ultimately make it far easier for brokers to understand the true nature of a bank’s sustainability and help them to find the right financial partner for clients that prioritise positive social and environmental impact.

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Curiosity pays

Helping your clients make the right borrowing calls

ISteve Richardson Commercial Director Reparo Finance

began my career 24 years ago as a broker specialising in niche asset finance, often for start-ups and businesses with an imperfect financial history. In that time, I learnt a fair amount about the variety of requirements and challenges facing business owners when seeking finance.

It’s taught me an approach to lending that’s driven by curiosity. It’s what we practice at Reparo today, and it’s proven to be the best way to serve our end users: ask questions and base our solutions on their needs, rather than what’s quickest or easiest.

Zooming out

The first and most important question to ask every client: “Tell me, in your own words, what do you want to achieve?” Clients often come to brokers with prescriptive asks and a cash amount in mind. It’s tempting to just find what they’re asking for. But taking the time to understand the bigger picture opens up extra options.

Find out the client’s back story, their goal, and drivers. This is a useful exercise to remove your own assumptions and biases from the equation. Understanding a client’s ‘why’ is key for structured lenders. Structured facilities are most advantageously deployed when a business has a specific goal that requires a larger amount of money than they could access with a typical cashflow loan.

Structured lenders are lending based on a variety of metrics, be it asset-backed security, trade debtors or projected incomes.

Nailing down the story and the client’s ‘why’ will go a long way to getting the lender onboard initially, and building the trust often needed to get in front of credit.

Cash forensics

Understand your client’s cashflow cycles and identify their pain points. From quarterly rent to VAT payments, there’s lots to consider. Get a holistic view of a client’s cashflow to spot any cash constraints early on. This will help determine the right product fit, such as a revolving credit line versus a loan for example.

The purpose of the loan will often determine the client’s time frame and how urgent the need is. It’s practical stuff: will security be required? How long will valuations and legal take? Is there any trade insurance needed? What about tri-party agreements from existing charge holders?

Supporting a client to get to know lenders demonstrates genuine care. While structured loans take more time to complete, they show you’ve given it real thought, which casts you in a better light than those taking the easiest route.

Repaying it

From invoice finance to bridging loans – these creative solutions are familiar to us, but not always to the client. Ask them: “In an ideal world, how would you repay this loan?” It’s within the broker’s remit to show them a variety of options that match their circumstances, while offering a realistic repayment path.

Staying curious – and asking simple questions that quickly get to the heart of your client’s situation – can make the difference between deal or no deal. And it ensures a sustainable, successful client relationship.

OThe evolution of Open Finance

Empowering businesses through technology

Andrew McKee Chief Information Officer Ultimate Finance

pen Finance has emerged as a direct evolution of Open Banking, promising to continue revolutionising access to financial products and services since the launch in 2018 with the Open Banking PSD2 directive. Over the past six years, Open Finance has gained significant traction, with projections expecting a 25% annual growth across all sectors. This evolution marks a transformative shift in the way businesses and individuals interact with financial institutions and manage their finances, and at Ultimate Finance, we have been at the forefront of harnessing the potential of Open Finance to support our clients and introducers.

The landscape of Open Finance has seen remarkable progress, with approximately 80% of banks now supporting Open Banking initiatives. Additionally, around 80% of small and medium-sized enterprises use accounting platforms that also provide open access to financial data via Open Accounting: a recent survey conducted by Open Banking Limited shows that approximately 750,000 UK SMEs have already adopted Open Finance solutions, many of which are integrated into cloud accountancy packages. The widespread adoption of Open Finance offers a whole range of benefits, from enhanced data insights for improved financial management to streamlined processes for sharing financial information, leading to reduced effort and risk.

The benefits we’ve experienced

Throughout this journey, the team at Ultimate Finance have continuously evolved our adoption of the technology, such as incorporating Open Accounting to eliminate manual data extraction and imports, thus reducing operational costs and mitigating risks.

Our commitment to leveraging Open Finance technology has yielded tangible benefits for our clients, introducers, and internal teams alike. Firstly, it has helped accelerate decision-making. By leveraging Open Finance data, we can now offer credit-backed solutions within 24 hours, thanks to the time saved on retrieving and sharing financial documents. We have benefitted from enhanced client conversations too. With access to comprehensive data insights, we can dedicate more time to meaningful discussions with businesses, empowering them to make informed strategic decisions promptly.

Open Finance has also enabled us to adopt an ‘always-on’ mindset. Both our clients and internal teams can access real-time data, facilitating efficient processes and expedited service delivery.

The view from the frontline

Open Finance is supporting our intermediary and introducer community too. Commenting on his experience, introducer Gary Cain, head of funding at Leonard Curtis, said: “We have a long-standing relationship with Ultimate Finance, which we have enjoyed as they

“The future of finance is undoubtedly more open than it was five years ago, signalling a transformative era of innovation and collaboration

“With

access to comprehensive data insights, we can dedicate more time to meaningful discussions with businesses, empowering them to make informed strategic decisions promptly

continue to improve the efficiency of the customer journey and experience. Accessing a dashboard of information through Open Finance has enabled us to reduce the time taken from first meeting the prospect through to the due diligence and client onboarding process.”

What we’ve learned

Our journey with Open Finance has also provided valuable insights and lessons which we continue to learn from. The technology has reinforced our belief that tailored solutions are necessary for more complex needs. While Open Finance offers immense potential, not all available tools are suitable for asset-based solutions such as invoice finance for instance, where the facility requirements and management differ from other forms of lending such as loans and overdrafts. It is therefore imperative for lenders to discern the relevance of technology for the businesses they support and adopt the right solutions.

We have also been reminded of just how important support and education are. Some SME clients may find the transition to Open Finance overwhelming. Providing dedicated support and enhancing their understanding of the technology are essential for successful adoption. The education process starts with our own people: lenders must provide their teams with regular training as there is an ongoing evolution of the capabilities on the back of the technology, and by sharing this learning with our teams, they in turn can help to educate

our introducers and their clients, so that the wider market will gain the insight necessary for greater adoption.

In terms of data security and compliance, addressing concerns regarding data sharing has been paramount. Clients expect lenders to be responsible custodians of their data, adhering to regulations such as GDPR, and so it is important to provide material that informs and reassures them.

As the tools grow in utilisation, so will the confidence of those who use it internally such as credit, risk and underwriting teams. With additional assurance in data quality and accuracy, credit worthiness and lending appetite will benefit in speed and safety.

What the future looks like

Looking ahead, we anticipate continued growth in Open Finance adoption rates, with closer integration between clients’ data and lenders’ platforms reshaping the nature of support required. As we work in partnership with introducers to help provide further education and increase adoption, we foresee a shift towards a more transparent and interconnected financial ecosystem, where the technical intricacies of lenders’ processes converge with the unique needs of businesses seeking asset-based solutions. The future of finance is undoubtedly more open than it was five years ago, signalling a transformative era of innovation and collaboration in the financial services industry.

Navigating the road ahead

Overcoming the challenges in today’s construction industry

IStephen

Hand UK Sales Director Bibby Financial Services

n today’s continuing turbulent economic landscape, SMEs are grappling with a myriad of challenges. This is particularly true for those in the construction sector, with our latest research of 1,000 UK SMEs highlighting some of the heightened challenges these businesses are facing.

The construction sector is particularly exposed to cost challenges and cashflow pressures. While 50% of all SMEs cite inflation as a key challenge, for the more than 200 construction SMEs we spoke to, this figure jumps to 56%. This is in part due to their reliance on materials, which have seen a huge increase in cost. According to recent government statistics, between 2022 and 2023 the price of ready-mix concrete and metal doors and windows both saw significant year-onyear price increases of 13.4% and 18.2% respectively. Indeed, two thirds of construction business owners we surveyed voted the high cost of materials as one of the factors currently most impacting their business. This is exacerbated by the fact that customers are also taking longer to pay, with 45% of businesses citing late payments as a key challenge.

Another barrier identified by just over a third of construction SMEs is the availability of skilled workers, creating a perfect storm when coupled with the other challenges they’re experiencing. This suggests that, four years on, Brexit is still continuing to cause disruption. These labour shortages look set to be an ongoing issue, with 224,900 more construction workers currently required to meet industry needs.

It’s clear that the construction industry is experiencing a particular set of vulnerabilities. This is reflected in recent insolvency figures

showing construction firms accounted for 16.6% of all insolvencies in January 2024. Construction firms are particularly exposed to financial difficulty, due to the nature of contract cycles and the cashflow restrictions both contractors and subcontractors often face.

Despite these ongoing issues, construction SMEs display a boldness not seen in other sectors. Whilst 35% are putting off major hiring and investment decisions until interest rates drop, interestingly this figure rises to 53% across other sectors. Furthermore, over half of construction firms say they are optimistic that orders will increase in 2025.

With slow and steady economic growth forecast for the rest of this year and into 2025, construction businesses will need to think about the measures they can put in place to ensure their best possible chance of surviving and growing and match the optimism that our research shows. They will require support from the government, external finance providers and the intermediary community to help them overcome these barriers. Using specialist external finance, such as working capital solutions specifically designed to support construction businesses, they can release the cash needed to fulfil contracts and be able to pitch for new ones.

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Despite these ongoing issues, construction SMEs display a boldness not seen in other sectors

Read all about it

Ensuring the right message is heard by the right people

TDavid Brown Business Consultant Funding South West

humbing through a copy of last October’s Commercial Broker magazine, I chanced upon an insightful piece from Norman Chambers that did a more than commendable job highlighting what we, as brokers, contribute to the business financing process.

His article resonated with me on a personal level as it sought to compare the intricate and delicate balance of a choreographed dance with the services the broker community offers. However, I did think that the real audience for such enlightenment – beyond my fellow brokers – might be found in the readership of local and business magazines. Whilst brokers are well versed in the intricacies of our profession, there’s a broad audience of SMEs and the general public that remains largely unaware of the critical role we play.

Through various marketing efforts over the years, including magazine and newspaper adverts to radio spots, I’ve found that none have generated as much interest as thoughtful, informative articles placed in widely-read local publications. These pieces, discussing topics from interest rates to economic forecasts, engage readers far more effectively than traditional advertisements. They invite inquiries and discussions, which often lead to meaningful engagements and new client relationships.

A view from the south west

My brokerage is based in a picturesque but remote area of Cornwall, and although it may not mirror the bustling atmosphere of a citybased firm, I strongly believe the essence of our service – to craft and streamline business narratives for financing – resonates universally. As Norman pointed out, whether the business is large or small, the process of preparing it for financing is complex and often requires adjustments tailored to each lender’s perspective.

I often get the sense that some business owners initially avoid brokers, opting instead to directly approach banks or search online for financing to save on broker fees. This initial step, whilst proactive, often complicates their future financing efforts. As lenders review and possibly reject their applications, the financing waters become increasingly muddied. This is just one scenario that underscores the value brokers bring – not only do we understand a business’s current state, but we can also strategically position it for future growth and successful lender engagement.

The changing face of funding

The traditional necessity for lengthy business plans is fading. Nowadays, lenders prefer concise, impactful presentations that quickly grasp their interest. In my thirty-five years in the industry, I’ve witnessed the evolution from voluminous business plans to streamlined, focused proposals that effectively communicate the essentials to lenders.

This shift reflects a broader change in the financial landscape, which in one sense has become more accommodating but in another very real sense demands a higher level of precision in communications. Instead of navigating the daunting expanse of potential online lenders, SMEs would benefit significantly from engaging a broker at the outset. Our expertise not only simplifies the process but enhances the chances of securing suitable financing.

The reality for most SMEs today is a lack of time to shop around for lenders. They greatly value a broker who can manage their financial concerns comprehensively. Our role extends beyond transactions; we become strategic partners, often knowing a business so well that subsequent financial needs can be discussed over a simple phone call or a casual meeting. This deep involvement is only possible when a business engages with a broker from the start and nurtures that relationship.

Regulatory bodies like the Financial Conduct Authority (FCA) play a crucial role in overseeing our activities, ensuring we maintain high standards. However, the administrative load they impose can sometimes pull us away from client-facing activities. It is though clear that the FCA recognises the importance of experienced brokers working directly with clients, suggesting a need to balance regulatory compliance with effective client engagement.

It is essential that we continue to advocate for our role, ensuring that more SMEs understand the benefits of working with a broker

Despite the complexities and regulatory challenges of our profession, being a broker remains profoundly rewarding. After thirty-five years, the continued satisfaction and success affirm the value we provide. It is essential that we continue to advocate for our role, ensuring that more SMEs understand the benefits of working with a broker. By effectively communicating our ability to tailor financial solutions to individual business needs, we not only enhance our profession’s image but also support the growth and success of businesses across the country.

This message, both vital and true, deserves a wider audience. As we expand the understanding of what brokers can achieve, we ensure that SMEs recognise the full spectrum of benefits that comes with our expertise – a crucial step in fostering a more informed and financially savvy business community.

Credit where it’s due

Why business credit ratings matter now, more than ever

James Piper CEO and Founder Lightbulb

From Covid-19 pandemic-related disruption and supply chain issues to the recession, businesses have faced numerous challenges in the past few years.

For some the consequences have been severe, as Insolvency Service data shows there were 5,158 registered company insolvencies last year, the highest annual number since 1993. These uncertain economic conditions have led to lower lending appetites, as lenders are more cautious and seek reliable indicators to assess each company’s ability to honour financial obligations.

The NACFB itself found total broker-led lending to small and mediumsized enterprises (SMEs) fell to £38 billion in 2023, a 16% decline from the previous year. While this is not necessarily a sector-specific problem, our data shows construction, manufacturing, and retail were among those hit hardest by reduced business credit ratings and limits.

The limitations of using one credit rating agency

As brokers tasked with facilitating access to finance will know very well, a strong business credit rating increases a company’s chances of accessing funding. Often for our broker partners, a client’s application is rejected based on a business credit rating that starkly contrasts with their initial evaluation. This commonly occurs as business credit ratings

and recommended credit limits can vary significantly across each credit rating agency.

While decisions are mainly based on the same information filed with Companies House, each uses unique algorithms, which put different weightings on each variable.

Why a whole of market view matters

In the current climate, it makes sense that a growing number of businesses are looking to manage and optimise their credit profiles. Brokers have an important role to play in this. Those looking to improve a client’s credit rating should always be on the lookout for issues that could be causing problems, and ensure year-end accounts and confirmation statements are filed on time, invoices are settled within terms and CCJs are dealt with promptly.

While these steps can help, in some instances they may not be enough to get the business to where it needs to be for its funding application (usually a rating of 45/100 or above with the funder’s chosen agency).

When this happens, brokers should consider speaking to external experts who have relationships with key contacts across all of the key credit rating agencies. This gives them a wider perspective and a variety of credit ratings. Often, this allows the company to benefit from dramatically improved credit profiles, which in turn increases the chances of attracting offers from a diverse array of lenders.

Not only is this valuable in helping businesses navigate a turbulent economy, it helps brokers build stronger relationships with their clients – a win-win.

Hey, big lender

We’re the UK’s largest asset finance provider*. Fact. But in reality, what does that mean for you and your business?

We offer specialist sector specific advice, tailored expertise and support. We know what matters when it comes to asset investment and funding your growth. Yes. That’s big.

Search Lombard Asset Finance to find out more.

*Asset Finance 50 report published by Asset Finance Connect – AF50 UK 2022 and 2023

Security, guarantees or indemnities may be required. Product fees may apply. Finance subject to status and is only available for business purposes unless otherwise stated. Over 18s only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it.

TSatisfaction guaranteed?

Why PGs are coming under scrutiny

Todd Davison Managing Director Purbeck Personal Guarantee Insurance

he Financial Conduct Authority (FCA) is currently investigating the use of personal guarantees on small business loans under £25,000 in value to sole traders and small partnerships. They are also examining complaints received by the Financial Ombudsman Service concerning personal guarantees. This is a good step but the FCA itself has acknowledged it has limited powers in respect of loans to limited companies. So, as a warning shot to the business lending sector, it has stated that “…if we identify issues outside our remit, we will make these public so that Parliament and policymakers can consider whether greater protection should be available to small businesses.”

Personal guarantees must be proportionate and appropriate to the loan being offered so it will be interesting to see the outcome of the FCA’s investigations, including the number of complaints received by the Ombudsman.

But even in cases where a personal guarantee demand is fair and legitimate, we know that they can prove to be a barrier to accessing finance for small businesses. Our research shows that around 45% of firms back off from a finance deal if they find out there is a personal guarantee attached. Naturally, business owners are concerned about the personal risk they must shoulder by becoming a guarantor in the current economic climate.

However, 64% of small business owners would be more likely to sign a personal guarantee if they had insurance in place to protect against the risk of providing it. This is precisely the reason why Personal Guarantee Insurance exists: to help remove that barrier. October 2023 saw the largest number of small business owners ever recorded taking out insurance to mitigate the risk of signing a personal guarantee as a condition of a business loan.

Given that personal guarantees have become an almost unavoidable part of securing a small business loan, particularly in the alternative lending market, a record rise in the number of people choosing to take insurance to protect against the risk should come as no surprise. Looking at the whole of 2023 vs 2022, there has been a 67.5% rise in applications from the directors/managers of limited companies for personal guarantee insurance.

These business owners and directors are typically using insurance to share some of the risk, improve their confidence to take finance and allow them to pursue growth opportunities. From our experience supporting limited companies, around 24% of personal guarantees are for loans that are under £50,000 in value. However, the average personal guarantee amount was close to £160,000 in Q4 2023, the highest quarterly average since Q1 2022.

Ultimately, if the FCA’s investigations provide some guidelines to encourage good lending practices including the request for personal guarantees, that can only be a good thing. In the meantime, commercial finance brokers will continue to play a hugely valuable role in educating business owners on the risks and how to mitigate them through solutions such as personal guarantee insurance.

“

64%

of small business owners would be more likely to sign a personal guarantee if they had insurance in place to protect against the risk of providing it

ISafeguarding against costly setbacks

Navigating Building Safety Act requirements

Alex Lyons Commercial Director London Belgravia Group

n the world of financial brokering, lending to developers is a common practice. However, overlooking crucial advice on securing the correct latent defect insurance (LDI) to work in conjunction with the Building Safety Act (BSA) requirements can lead to costly delays for projects.

Failure to grasp and address the new regulations, processes and dutyholder responsibilities brought in by the BSA can result not only in delays, but also substantial financial setbacks, posing significant challenges to both lenders and developers.

Without a comprehensive understanding of these requirements, projects risk grinding to a halt, negatively impacting all stakeholders involved. To mitigate these risks, it is crucial to get the correct advice in terms of responsibilities under the BSA.

Competence, compliance, and accountability

From the establishment of the new Building Safety Regulator (BSR) to stricter sanctions for non-compliance, the construction landscape has undergone a significant shift since the BSA was introduced in 2022. The Act presents new processes, procedures, and duties, fundamentally altering the way most projects operate.

Central to these changes are the new dutyholder roles; known as the accountable person (AP) and principal accountable person

(PAP) for residential high-rise buildings (HRBs). The AP is the person who owns or has responsibility for the building, with a duty to keep the occupants of the building safe. The AP (or PAP where there are multiple APs) must produce a ‘Safety Case Report’ to demonstrate that building safety risks have been assessed and that reasonable steps have been taken to mitigate them.

The Safety Case Report is a comprehensive document, submitted to the BSR, which includes a thorough evaluation of factors including the building’s design, construction, and fire safety measures. A structural defects assessment is a significant element of the report and aims to identify any existing or potential issues that may compromise the building’s structural integrity.

“ The accountable person is the person who owns or has responsibility for the building, with a duty to keep the occupants of the building safe

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GGoing global

Learning sustainable strategies from other countries

Joshua Meek Head of Impact and Sustainability Unity Trust Bank

lobally, there are many emerging policies, international initiatives and membership bodies helping to guide and set standards to shape how our investments can drive a sustainable and inclusive economy.

The Partnership for Carbon Accounting Financials (PCAF) is a prime example, advocating for heightened transparency in measuring greenhouse gas emissions and supporting banks and investors on a transition to net zero by 2050. Meanwhile, the Global Alliance for Banking on Values (GABV) is a network of independent banks all committed to delivering sustainable economic, social and environmental development and sharing best practice.

These bodies are playing a crucial role in fostering a culture of increased accountability and standards in the financial sector. As standards and membership bodies grow in influence and size, there is an opportunity for best practice to become mandatory and have a larger impact in how investments contribute to a sustainable economy. From 2024, the ISSB Standards (IFRS S1 and IFRS S2), led by the IFRS Foundation, will provide a global baseline of sustainability-related disclosures worldwide and is expected to be the structure by which national regulators will expect financial institutions to report and manage their activities to tackle climate change.

This shift towards mandatory reporting demonstrates how previously ignored negative externalities can become a market standard. While mandatory reporting on key metrics is a step forward, it’s only the starting point to materially reducing the negative environmental impact.

At Unity, with 40 years of social good behind us, we have taken a proactive approach to delivering positive impact and reporting to ensure transparency and accountability of our work.

While it is crucial for financial institutions to meet regulatory frameworks and reporting standards, it is equally important to understand the realworld impact of day-to-day operations. Empowering customers to drive social good in a sustainable manner requires banks to ensure that their own practices align with wider sustainability goals.

Countries continue to take varying approaches to delivering positive social, economic and sustainable outcomes for their populations. From the United States’ Inflation Reduction Act driving decarbonisation to New Zealand’s Wellbeing Budget, different strategies all create lessons to lead to better outcomes for people and planet.

But we must go beyond the standards and minimum reporting to understand the true impact we have on society – and not lose sight of its overarching mission and actions amid evolving international regulations, accreditations and reporting requirements.

By prioritising tangible positive impact and staying true to core values, banks can navigate a route through regulatory requirements while delivering value for customers and contributing to a more sustainable future.

“While it is crucial for financial institutions to meet regulatory frameworks and reporting standards, it is also crucial to understand the real-world impact of day-to-day operations

Funding CapEx. Fuelling growth.

For clients looking to invest in the growth of their business through capital expenditure, Shawbrook’s CapEx Term Loan could be the perfect fit.

Supporting a range of niche business-critical assets and intangible costs, with 24-hour decisions and fast payouts, your clients can access the funds they need to grow.

Interested in working with us? Get in touch

Five Minutes with: Sienna McQuade

Sienna McQuade Head of Broker Relations Cubefunder

What was your first car? Did you name it?

My first car was a silver Audi A3. I didn’t have a chance to name it as I wrote it off the first day having it unfortunately!

What does a perfect day off look like for you?

A perfect day off for me is usually booking myself in the salon for my nails or hair and going out for lunch or shopping.

What is the oldest item in your wardrobe?

I have kept hold of an old pink Piglet T-shirt I had when I was about five years old. I would have worn it every day if I was allowed. I was obsessed with Piglet from Winnie the Pooh and always kept hold of the T-shirt!

What is your biggest fashion regret? Have you seen it re-emerge since?

Looking back at old photos I always had a Paul’s Boutique or Adidas sports bag (and I was never sporty) – this was in high school. I also thought it looked cool to wear bright neon headbands. Definitely don’t think either will re-emerge haha!

What is the laziest thing you have done out of convenience?

I regularly order Deliveroo from the shop round the corner instead of walking there myself.

If you have a pet, what is it and what’s its name?

I have a Miniature Dachshund, also known as a sausage dog, called Peanut.

What attracted you to work for Cubefunder?

I have been working with the CEO, Gary Miller-Cheevers, since early 2019. Gary had taught me a lot in lending in the first couple of years and offered for me to come over to Cubefunder in 2020 to work in Windsor where I would be able to learn more about SME lending and progress further.

Career-wise, where would you like to be in 10 years?

Strangely enough, I have never really thought about that. I am currently happy in the role I’m doing now, however in 10 years’ time I would like to think I will have progressed since then, how? I’m not yet sure...

What is the best part of your current role?

My current role is head of broker relations and the best part of it is probably being able to network with a variety of different brokers that work in different ways but have the same aim to get their customers funded. I aim to increase our broker panel which currently sits at more than 250 brokers and continue to help Cubefunder’s growth. Networking is my main role which includes a lot of attending events, dinners, and parties which I don’t complain about of course!

What is the most valuable career advice you’ve been given?

To remember that there is always more out there to learn and you won’t ever ‘know it all’. To also take opportunities you are unsure of, and to never become complacent.

What are some skills or strengths you bring to the team?

I bring strong relationship-building skills with brokers, deep investment knowledge, effective communication, negotiation abilities, analytical thinking, and a results-driven approach.

With you as you build out your scheme

the specialist effect

As an experienced and long-established lender, we are dedicated to supporting our customers through the ups and downs of the economic cycle with committed facilities over the lifespan of their development projects.

Bridge To Develop

60% LTV | Loans up to £30m |

Residential and Residential led mixed-use | England & Wales

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Email: development@utbank.co.uk

Telephone: 020 7190 5555

Development Finance

65% LTGDV | Loans up to £30m |

Residential and Residential led mixed-use | England & Wales

Development Exit

70% LTV | Loans up to £30m |

Residential and Residential led mixed-use | England & Wales