NACFB Magazine - December 2018

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Issue 65 December 2018

The magazine for the National Association of Commercial Finance Brokers

Association caps off a strong year in style We stage our largest-ever Gala Dinner and Awards Ceremony In this issue

Agricultural finance

Helping the rural economy access funds

Dual Growth Funding

What is it all about?

Shaping the SME regulatory landscape

Working together to influence legislation

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

Finance for the pace of change

Welcome | NACFB 2

018 has been a bumper year for the Association. I am delighted to have witnessed our membership grow both in terms of size and quality. We remain by far the largest independent and non-profit trade body dedicated solely to the modern commercial finance professional and I believe that we should all be very proud of the tireless work taking place within our community.

2018 also saw the Association stage more regional events than ever before alongside our largest ever Commercial Finance Expo and an extremely successful Gala Dinner, and we have set ourselves a very high benchmark for 2019.

We will continue to refine and enhance our membership offering and I hope you will agree that the addition of our SmartSearch functionality, at a discounted broker rate, is of real value to Members – find out more on p. 4.

But there are exciting times ahead as the Association continues to influence the direction of regulatory travel to the benefit of our Members, Patrons and ultimately UK SMEs, you will see the fruits of this in our latest compliance update on p. 10.

At Shawbrook we tailor our facilities to suit your customers, including variable payment terms from 1 to 5 years and finance to cover 100% of hosted or delivered software as well as variable licence agreements.

Whether your customer needs finance for software, hardware or services, speak to our specialist technology team today.

Together

Contact us today

01277 892 281 technology@shawbrook.co.uk shawbrook.co.uk/technology

Thank you to all those who have contributed editorial to the NACFB magazine in 2018. Most of you will be aware that this is the last issue in partnership with publisher Medianett. I wish to extend my gratitude to their team who have supported the Association’s magazine for a number of years – we wish them all the very best.

Thank you also to those of you joining us on this exciting new chapter of the Association’s development.

2019 is going to be a year of positive change for your trade body, but before any of that can begin, allow me to wish all of those within the NACFB family a very Merry Christmas and a Happy New Year.

Graham Toy

Graham Toy CEO NACFB

In this December issue NACFB News 4-6 8

In the news Notes from our sponsor

Compliance Update 10-12 A detailed look at the new FOS rules for SMEs

Commercial Finance 14-15 Essential news bites

Cover Story 16-19 Gala Dinner and Awards Ceremony

Top Story 20

Brokers view tax reform as more important to bridging market growth than Brexit

Ask the Expert 36

Simon Goldie

Special Features 38-39 Why bridging sits well with HMOs 40 Export and trading in a post-Brexit environment

Industry Guides 42-44 Dual funding: part flexible funding, part term loan 46-47 Rethinking commercial securities

Opinion & Commentary 50-51 Helping shape the SME lending regulatory landscape

Introducing 22

Precise launches refurb BTL product

Case Studies 24-26 For British farmers, access to capital is vital 28 Evolving with our introducers 30-31 Is there anything asset finance can’t be used for?

32 Property portfolio remortgage in under two months

Patron Profile 34-35 Amicus Commercial Mortgages

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

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

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS SB_BF_TEF_NACFB_201811_01

NACFB Magazine | 3

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

Finance for the pace of change

Welcome | NACFB 2

018 has been a bumper year for the Association. I am delighted to have witnessed our membership grow both in terms of size and quality. We remain by far the largest independent and non-profit trade body dedicated solely to the modern commercial finance professional and I believe that we should all be very proud of the tireless work taking place within our community.

2018 also saw the Association stage more regional events than ever before alongside our largest ever Commercial Finance Expo and an extremely successful Gala Dinner, and we have set ourselves a very high benchmark for 2019.

We will continue to refine and enhance our membership offering and I hope you will agree that the addition of our SmartSearch functionality, at a discounted broker rate, is of real value to Members – find out more on p. 4.

But there are exciting times ahead as the Association continues to influence the direction of regulatory travel to the benefit of our Members, Patrons and ultimately UK SMEs, you will see the fruits of this in our latest compliance update on p. 10.

At Shawbrook we tailor our facilities to suit your customers, including variable payment terms from 1 to 5 years and finance to cover 100% of hosted or delivered software as well as variable licence agreements.

Whether your customer needs finance for software, hardware or services, speak to our specialist technology team today.

Together

Contact us today

01277 892 281 technology@shawbrook.co.uk shawbrook.co.uk/technology

Thank you to all those who have contributed editorial to the NACFB magazine in 2018. Most of you will be aware that this is the last issue in partnership with publisher Medianett. I wish to extend my gratitude to their team who have supported the Association’s magazine for a number of years – we wish them all the very best.

Thank you also to those of you joining us on this exciting new chapter of the Association’s development.

2019 is going to be a year of positive change for your trade body, but before any of that can begin, allow me to wish all of those within the NACFB family a very Merry Christmas and a Happy New Year.

Graham Toy

Graham Toy CEO NACFB

In this December issue NACFB News 4-6 8

In the news Notes from our sponsor

Compliance Update 10-12 A detailed look at the new FOS rules for SMEs

Commercial Finance 14-15 Essential news bites

Cover Story 16-19 Gala Dinner and Awards Ceremony

Top Story 20

Brokers view tax reform as more important to bridging market growth than Brexit

Ask the Expert 36

Simon Goldie

Special Features 38-39 Why bridging sits well with HMOs 40 Export and trading in a post-Brexit environment

Industry Guides 42-44 Dual funding: part flexible funding, part term loan 46-47 Rethinking commercial securities

Opinion & Commentary 50-51 Helping shape the SME lending regulatory landscape

Introducing 22

Precise launches refurb BTL product

Case Studies 24-26 For British farmers, access to capital is vital 28 Evolving with our introducers 30-31 Is there anything asset finance can’t be used for?

32 Property portfolio remortgage in under two months

Patron Profile 34-35 Amicus Commercial Mortgages

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

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

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS SB_BF_TEF_NACFB_201811_01

NACFB Magazine | 3

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

NACFB partners with SmartSearch to enhance anti-money laundering checks

T

he NACFB has teamed up with SmartSearch to provide its members with preferential access to the latter’s award-winning anti-money laundering platform.

The simple and easy-to-use system allows brokers to access all this data in seconds, and can even be done remotely thanks to SmartAML, SmartSearch’s fully integrated app.

The partnership comes in response to increased demand from NACFB Members for a simple and effective way to conduct due diligence checks on both individuals and businesses.

The SmartSearch platform also delivers warning email alerts to allow those responsible for AML compliance to keep a watching brief over users and ensures that enhanced due diligence is undertaken if PEPs or sanctions warnings are highlighted.

After scrutinising the market – and consulting with Members – the Association found that SmartSearch’s unique platform was ideally suited to offer a solution. The SmartSearch platform uses data partners Experian, Equifax, Dow Jones and Companies House to conduct searches and checks on individuals and businesses both across the UK and the international markets.

4 | NACFB Magazine

Graham Toy, chief executive officer at the NACFB, said: “We work hard to ensure our brokers receive a first-class proposition with their membership, including comprehensive compliance support. Through implementing SmartSearch we are able to provide them with a world-class resource for this important element of compliance.

“The feedback from brokers who already use the platform is overwhelmingly positive. These brokers have told us that SmartSearch is an efficient and effective way of conducting background searches.

We remain committed to making the lives of commercial brokers easier, and we look forward to continuing to provide innovative solutions like this to do just that.”

The Association has negotiated preferential rates for all NACFB Members, who will be invoiced quarterly based on usage. The Association has set-up a dedicated portal for you to get your business registered, this can be found via: www.smartsearchsecurecom/ register/nacfb.

With all the trimmings.

Property finance that brings something extra to the table.

Call us on 020 3846 6838 or visit intermediaries.lendinvest.com. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929). ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.

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

NACFB partners with SmartSearch to enhance anti-money laundering checks

T

he NACFB has teamed up with SmartSearch to provide its members with preferential access to the latter’s award-winning anti-money laundering platform.

The simple and easy-to-use system allows brokers to access all this data in seconds, and can even be done remotely thanks to SmartAML, SmartSearch’s fully integrated app.

The partnership comes in response to increased demand from NACFB Members for a simple and effective way to conduct due diligence checks on both individuals and businesses.

The SmartSearch platform also delivers warning email alerts to allow those responsible for AML compliance to keep a watching brief over users and ensures that enhanced due diligence is undertaken if PEPs or sanctions warnings are highlighted.

After scrutinising the market – and consulting with Members – the Association found that SmartSearch’s unique platform was ideally suited to offer a solution. The SmartSearch platform uses data partners Experian, Equifax, Dow Jones and Companies House to conduct searches and checks on individuals and businesses both across the UK and the international markets.

4 | NACFB Magazine

Graham Toy, chief executive officer at the NACFB, said: “We work hard to ensure our brokers receive a first-class proposition with their membership, including comprehensive compliance support. Through implementing SmartSearch we are able to provide them with a world-class resource for this important element of compliance.

“The feedback from brokers who already use the platform is overwhelmingly positive. These brokers have told us that SmartSearch is an efficient and effective way of conducting background searches.

We remain committed to making the lives of commercial brokers easier, and we look forward to continuing to provide innovative solutions like this to do just that.”

The Association has negotiated preferential rates for all NACFB Members, who will be invoiced quarterly based on usage. The Association has set-up a dedicated portal for you to get your business registered, this can be found via: www.smartsearchsecurecom/ register/nacfb.

With all the trimmings.

Property finance that brings something extra to the table.

Call us on 020 3846 6838 or visit intermediaries.lendinvest.com. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929). ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.

NACFB NEWS

Association teams up with bridging experts for Development Day The NACFB has teamed up with Bridging Finance Solutions (BFS) to support the Patron’s first-ever Development Day.

T

he free event – held on Tuesday 29th January 2019 at Ashton in Makerfield Golf Club – aims to give people a keener insight into development finance. This includes how to manage their first deal and improve their wider knowledge of the process, while also giving access to specialists in the market for the more experienced developers.

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

Indemnity Insurance and a Data Protection Licence.

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

CODE OF PRACTICE

The day will be an educational experience, helping delegates understand the market and bridging process, presenting the viewpoint of the underwriter, valuer, quantity surveyor (QS) and solicitor. This will provide added insight into the specialist requirements of the professional team involved with an opportunity to ask questions. You can find out more about the day – and register to attend – by visiting the NACFB and BFS websites.

COLLABORATIVE EVENTS

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

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

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

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

BROKER & LENDER ENGAGEMENT Enabling a closer working lender relationship – making processes easier and more time efficient.

INDUSTRY VOICE

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

w. t. e. a.

6 | NACFB Magazine

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

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

@NACFB linkedin.com/in/nacfb

NACFB NEWS

Association teams up with bridging experts for Development Day The NACFB has teamed up with Bridging Finance Solutions (BFS) to support the Patron’s first-ever Development Day.

T

he free event – held on Tuesday 29th January 2019 at Ashton in Makerfield Golf Club – aims to give people a keener insight into development finance. This includes how to manage their first deal and improve their wider knowledge of the process, while also giving access to specialists in the market for the more experienced developers.

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

Indemnity Insurance and a Data Protection Licence.

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

CODE OF PRACTICE

The day will be an educational experience, helping delegates understand the market and bridging process, presenting the viewpoint of the underwriter, valuer, quantity surveyor (QS) and solicitor. This will provide added insight into the specialist requirements of the professional team involved with an opportunity to ask questions. You can find out more about the day – and register to attend – by visiting the NACFB and BFS websites.

COLLABORATIVE EVENTS

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

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

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

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

BROKER & LENDER ENGAGEMENT Enabling a closer working lender relationship – making processes easier and more time efficient.

INDUSTRY VOICE

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

w. t. e. a.

6 | NACFB Magazine

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

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

@NACFB linkedin.com/in/nacfb

NACFB NEWS

NACFB NEWS

Notes from our sponsor L A new invoice finance portal makes Lloyds Bank an even more attractive proposition for brokers and clients alike. We spoke to Ian Dent, head of product transformation, and Lee Baty, head of sales, about how the portal is transforming the client experience.

8 | NACFB Magazine

loyds Bank’s new invoice finance platform – launched in July this year – is boosting time to decisioning and access to cash for clients. Clients can now benefit from smaller sterling payments faster than with BACS and cheaper than with CHAPS. With its personalised homepage and on-the-move functionality, it’s already gaining positive client feedback on speed, look, feel and ease of use.

“This investment in the new invoice finance portal meets clients’ changing expectations of how they wish to manage their facilities and delivers a modern and straightforward client experience,” says Ian Dent.

The portal – which is currently available to new invoice discounting clients – combines personalisation and simplification with ease of use: any time, any place and via any device.

“Brokers will be looking to try to identify the best solution for their clients,” says Lee Baty. “With its simplification and ease of access to funding, they can have confidence in recommending our invoice finance products to their clients.”

Anytime access Linked to the Faster Payments scheme, the new portal – Invoice Finance Online – accelerates time-to-cash for clients, as well as giving them real-time updates.

“At the heart of client requirements is being able to establish funding availability quickly, and then being able to access that funding for the payment of its bills and creditors,” says Ian. “The new portal updates the status of a client’s facility as it happens and offers a Faster Payments option for payments up to £100,000.”

Any place, any device Access to the portal via desktop, tablet or smartphone allows clients to manage their facility wherever they are.

“As we work in a mobile environment, it’s no longer appropriate that we anchor the client to offices and desktops,” Ian explains. “The ability for them to view and transact in all aspects of their invoice finance facility on the go, is absolutely key as technology evolves.”

Easier management Invoice Finance Online allows clients to self-serve, so they can set up their own users on the platform, including adding authorisers to the account.

Clients can personalise their homepage and tailor the display of information most relevant to their business. And management is made easier with online statements and month-end reports sent directly to the portal for them to access, download and print.

Invoice Finance Online will also be supported by a new tool to enable clients to opt for automatic sales ledger extraction. Implementation is made as easy as possible with a single click installation routine.

Expanding Invoice Finance Online Access to the portal will be rolled out to new factoring clients early in 2019. To speed up the ability to access agreements and documents – and ultimately time-to-cash – Lloyds Bank is also developing a new e-sign capability.

confidence that the bank can respond quickly to market opportunities.

“We want to make sure we’re the first port of call for the broker community,” says Lee. “We’re very keen to continually improve and develop our support to the whole broker community. Ultimately it’s a way of supporting the UK economy and our Help Britain Prosper commitment.”

Providing this speedier end-toend process makes Lloyds Bank even more responsive to brokers, giving them the confidence that the bank can respond quickly to market opportunities.

Providing this speedier end-to-end process makes Lloyds Bank even more responsive to brokers, giving them the

NACFB Magazine | 9

NACFB NEWS

NACFB NEWS

Notes from our sponsor L A new invoice finance portal makes Lloyds Bank an even more attractive proposition for brokers and clients alike. We spoke to Ian Dent, head of product transformation, and Lee Baty, head of sales, about how the portal is transforming the client experience.

8 | NACFB Magazine

loyds Bank’s new invoice finance platform – launched in July this year – is boosting time to decisioning and access to cash for clients. Clients can now benefit from smaller sterling payments faster than with BACS and cheaper than with CHAPS. With its personalised homepage and on-the-move functionality, it’s already gaining positive client feedback on speed, look, feel and ease of use.

“This investment in the new invoice finance portal meets clients’ changing expectations of how they wish to manage their facilities and delivers a modern and straightforward client experience,” says Ian Dent.

The portal – which is currently available to new invoice discounting clients – combines personalisation and simplification with ease of use: any time, any place and via any device.

“Brokers will be looking to try to identify the best solution for their clients,” says Lee Baty. “With its simplification and ease of access to funding, they can have confidence in recommending our invoice finance products to their clients.”

Anytime access Linked to the Faster Payments scheme, the new portal – Invoice Finance Online – accelerates time-to-cash for clients, as well as giving them real-time updates.

“At the heart of client requirements is being able to establish funding availability quickly, and then being able to access that funding for the payment of its bills and creditors,” says Ian. “The new portal updates the status of a client’s facility as it happens and offers a Faster Payments option for payments up to £100,000.”

Any place, any device Access to the portal via desktop, tablet or smartphone allows clients to manage their facility wherever they are.

“As we work in a mobile environment, it’s no longer appropriate that we anchor the client to offices and desktops,” Ian explains. “The ability for them to view and transact in all aspects of their invoice finance facility on the go, is absolutely key as technology evolves.”

Easier management Invoice Finance Online allows clients to self-serve, so they can set up their own users on the platform, including adding authorisers to the account.

Clients can personalise their homepage and tailor the display of information most relevant to their business. And management is made easier with online statements and month-end reports sent directly to the portal for them to access, download and print.

Invoice Finance Online will also be supported by a new tool to enable clients to opt for automatic sales ledger extraction. Implementation is made as easy as possible with a single click installation routine.

Expanding Invoice Finance Online Access to the portal will be rolled out to new factoring clients early in 2019. To speed up the ability to access agreements and documents – and ultimately time-to-cash – Lloyds Bank is also developing a new e-sign capability.

confidence that the bank can respond quickly to market opportunities.

“We want to make sure we’re the first port of call for the broker community,” says Lee. “We’re very keen to continually improve and develop our support to the whole broker community. Ultimately it’s a way of supporting the UK economy and our Help Britain Prosper commitment.”

Providing this speedier end-toend process makes Lloyds Bank even more responsive to brokers, giving them the confidence that the bank can respond quickly to market opportunities.

Providing this speedier end-to-end process makes Lloyds Bank even more responsive to brokers, giving them the

NACFB Magazine | 9

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

A detailed look at the new FOS rules for SMEs From April 2019, UK SMEs will be able to complain about banks and secure compensation via the Financial Ombudsman Service (FOS)—a decision broadly welcomed by the NACFB and our Members. The extension comes after a series of highprofile cases prompted calls for stronger regulation of business banking.

James Hinch (AICA) Adv. CERT (Comp) Compliance consultant NACFB Compliance

T

he Financial Conduct Authority (FCA) said businesses with an annual turnover of below £6.5m and fewer than 50 employees or an annual balance sheet below £5m will be able to access the service, which currently only provides rulings for individuals and micro-businesses.

The FCA has said that approximately 210,000 companies would benefit from the extended cover. The FCA first

10 | NACFB Magazine

proposed extending the FOS’s remit in a consultation in January, but the near-final rules published in midOctober loosened the requirements for companies to be covered.

The regulator also announced a new consultation to examine the feasibility of raising the maximum amount of compensation the FOS can force firms to pay, from £150,000 to £350,000. Demands for better services for small businesses have grown in the wake of scandals involving high-profile lenders.

With the possibility of the FOS raising the maximum amount of

NACFB Magazine | 11

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

A detailed look at the new FOS rules for SMEs From April 2019, UK SMEs will be able to complain about banks and secure compensation via the Financial Ombudsman Service (FOS)—a decision broadly welcomed by the NACFB and our Members. The extension comes after a series of highprofile cases prompted calls for stronger regulation of business banking.

James Hinch (AICA) Adv. CERT (Comp) Compliance consultant NACFB Compliance

T

he Financial Conduct Authority (FCA) said businesses with an annual turnover of below £6.5m and fewer than 50 employees or an annual balance sheet below £5m will be able to access the service, which currently only provides rulings for individuals and micro-businesses.

The FCA has said that approximately 210,000 companies would benefit from the extended cover. The FCA first

10 | NACFB Magazine

proposed extending the FOS’s remit in a consultation in January, but the near-final rules published in midOctober loosened the requirements for companies to be covered.

The regulator also announced a new consultation to examine the feasibility of raising the maximum amount of compensation the FOS can force firms to pay, from £150,000 to £350,000. Demands for better services for small businesses have grown in the wake of scandals involving high-profile lenders.

With the possibility of the FOS raising the maximum amount of

NACFB Magazine | 11

COMPLIANCE

It is worth all introducers checking the limits to their professional indemnity insurance - some policies only cover the holder on claims up to £250,000

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

25 Years Sector Experience compensation they can force firms to pay – from £150,000 to £350,000 – it is also worth all introducers checking the limits to their professional indemnity insurance. Although not in place yet, some policies will only cover the holder on claims up to £250,000 and is, therefore, a development to closely monitor.

In November 2015, the FCA published a discussion paper reviewing their approach to SMEs as users of financial services. From the feedback received, the FCA recognised that some SMEs do not have the means to resolve disputes with financial services firms and have fewer routes to seek redress. This prompted the FCA to propose changes to its rules with the option to allow more SMEs to refer disputes to the FOS. Complaints are part and parcel of modern business culture, even the most cautious and risk-adverse brokers can encounter dissatisfied clients. The NACFB advises its Members to keep robust client and case records; these records enable us to support and back our Members in the few cases we arbitrate. Indeed, of the few cases we receive, 99% of complaints are not upheld.

As the largest independent trade body for commercial finance brokers, the NACFB’s remit seeks to ensure that the Association acts as a conduit and a clear industry voice for our Members when it comes to proposed regulatory changes. As such, earlier in 2018 the NACFB submitted feedback from our broker Members

12 | NACFB Magazine

on the proposed changes and expansion of SME access to the FOS. The vast majority of NACFB Members who responded felt that the proposed definition of an eligible complainant was a fair one and, therefore, agreed with the classification. We are pleased to see this reflected in the final proposals.

Collectively, NACFB Members felt that the ombudsman is the appropriate body to handle SME complaints, but our Members did express concerns about the level of resource that the FOS currently possesses.

During the consultation period, we suggested the establishing of a specialist department to deal with complaints, as often complex B2B matters are usually not best reviewed and considered by the same teams that deal with complaints on personal disputes.

Further, the ombudsman is perceived as being largely focused on retail rather than B2B complaints. This will require time to bring on board experienced B2B dispute resolution practitioners with commercial and financial services experience, a process that could take several years and should not be underestimated.

Our Members viewed the main risk as one of lack of experience in the early years if the proposed changes are implemented too soon without full FOS office support.

It was pleasing then to see that – under the near-final rules – the

ombudsman will create a ringfenced, specialist unit to handle complaints from SME customers under the proposed extended jurisdiction.

Patron Engagement

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

The key components – to be in place from day one – include a dedicated team of 20 SME investigators with specialist knowledge and skills, recruited internally, and external teams led and managed by people with specialist SME knowledge and experience, including specialist SME ombudsmen.

We were also pleased to see a dedicated legal resource to support SME complaint handling and access to additional expertise with technical advice, for example, forensic accountants or experts on more novel or complex products and services.

Further, a panel of external experts will be made available to support the knowledge of the service’s SME teams and provide access to sector expertise and insight.

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

Facilitating harmonisation between key stakeholders when new regulation is introduced.

Calendar of Workshops Centralised Personal Support

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

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

Model Office & Pragmatic Support

Others have called for stronger measures, including a public inquiry and dedicated tribunal system to investigate complaints.

The FCA has publicly stated its support for a tribunal that could deal with disputes that fall outside the ombudsman service’s remit.

Providing a full suite of the latest customisable working documents for your business.

w. t. e. a.

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

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

@NACFBCompliance linkedin.com/in/nacfb

COMPLIANCE

It is worth all introducers checking the limits to their professional indemnity insurance - some policies only cover the holder on claims up to £250,000

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

25 Years Sector Experience compensation they can force firms to pay – from £150,000 to £350,000 – it is also worth all introducers checking the limits to their professional indemnity insurance. Although not in place yet, some policies will only cover the holder on claims up to £250,000 and is, therefore, a development to closely monitor.

In November 2015, the FCA published a discussion paper reviewing their approach to SMEs as users of financial services. From the feedback received, the FCA recognised that some SMEs do not have the means to resolve disputes with financial services firms and have fewer routes to seek redress. This prompted the FCA to propose changes to its rules with the option to allow more SMEs to refer disputes to the FOS. Complaints are part and parcel of modern business culture, even the most cautious and risk-adverse brokers can encounter dissatisfied clients. The NACFB advises its Members to keep robust client and case records; these records enable us to support and back our Members in the few cases we arbitrate. Indeed, of the few cases we receive, 99% of complaints are not upheld.

As the largest independent trade body for commercial finance brokers, the NACFB’s remit seeks to ensure that the Association acts as a conduit and a clear industry voice for our Members when it comes to proposed regulatory changes. As such, earlier in 2018 the NACFB submitted feedback from our broker Members

12 | NACFB Magazine

on the proposed changes and expansion of SME access to the FOS. The vast majority of NACFB Members who responded felt that the proposed definition of an eligible complainant was a fair one and, therefore, agreed with the classification. We are pleased to see this reflected in the final proposals.

Collectively, NACFB Members felt that the ombudsman is the appropriate body to handle SME complaints, but our Members did express concerns about the level of resource that the FOS currently possesses.

During the consultation period, we suggested the establishing of a specialist department to deal with complaints, as often complex B2B matters are usually not best reviewed and considered by the same teams that deal with complaints on personal disputes.

Further, the ombudsman is perceived as being largely focused on retail rather than B2B complaints. This will require time to bring on board experienced B2B dispute resolution practitioners with commercial and financial services experience, a process that could take several years and should not be underestimated.

Our Members viewed the main risk as one of lack of experience in the early years if the proposed changes are implemented too soon without full FOS office support.

It was pleasing then to see that – under the near-final rules – the

ombudsman will create a ringfenced, specialist unit to handle complaints from SME customers under the proposed extended jurisdiction.

Patron Engagement

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

The key components – to be in place from day one – include a dedicated team of 20 SME investigators with specialist knowledge and skills, recruited internally, and external teams led and managed by people with specialist SME knowledge and experience, including specialist SME ombudsmen.

We were also pleased to see a dedicated legal resource to support SME complaint handling and access to additional expertise with technical advice, for example, forensic accountants or experts on more novel or complex products and services.

Further, a panel of external experts will be made available to support the knowledge of the service’s SME teams and provide access to sector expertise and insight.

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

Facilitating harmonisation between key stakeholders when new regulation is introduced.

Calendar of Workshops Centralised Personal Support

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

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

Model Office & Pragmatic Support

Others have called for stronger measures, including a public inquiry and dedicated tribunal system to investigate complaints.

The FCA has publicly stated its support for a tribunal that could deal with disputes that fall outside the ombudsman service’s remit.

Providing a full suite of the latest customisable working documents for your business.

w. t. e. a.

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

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

@NACFBCompliance linkedin.com/in/nacfb

Commercial Finance

Former Lloyds Bank manager joins Growth Street

Growth Street has appointed Gareth Pritchard as its first business development manager covering Wales and south-west England.

Gareth joins from Lloyds Bank, where he was a regional manager for business development within the SME division.

In his new role, Gareth will be based in Cardiff and educating the Welsh and South West of England markets on Growth Street’s business finance product GrowthLine.

Rural Insurance partners with UKAF

LendInvest names Colchester as BTL hotspot Colchester has been christened as the top buy-to-let area across England and Wales, according to the latest research.

The LendInvest buy-to-let index ranked 105 postcode areas based on a combination of capital value growth, transaction volumes, rental yield and rental price growth.

Stockport, Manchester, Birmingham and Canterbury completed the rest of the top five in the quarterly report.

Arc & Co arranges £60m of commercial and development loans in Q3 The specialist finance brokerage arranged more than £121m of funding for its clients in the same period across its three core areas (development and commercial, residential, and marine and aviation).

Arc & Co arranged 66 loans in the period, with an average loan size of over £1.8m.

Rural Insurance has partnered with UK Agricultural Finance (UKAF) to provide farmers and landowners with access to flexible and secured finance solutions.

Harrogate-based Rural Insurance supplies insurance to the agricultural and rural economic sector.

It hopes the partnership with UKAF will allow farmers to secure capital in order to grow and innovate their businesses to ensure they remain competitive and profitable.

Together partners with Mortgage Intelligence

iwoca forms Open Banking partnership with Lloyds

Mortgage Intelligence has announced the addition of Together to its panel, as the specialist lender continues to widen its distribution.

Together’s buy-to-let range and first charge residential products will now be available to Mortgage Intelligence’s network and club advisers.

Mortgage Intelligence members can now access Together’s online portal My Broker Venue, where they can submit cases and receive a full, instant decision-in-principle.

Business lender iwoca has released Open Banking for customers with a Lloyds Bank account.

By securely linking their Lloyds Bank data, business owners can now provide iwoca up to five years of transaction history in just a few minutes.

This will speed up the lender’s application process for Lloyds customers, reducing the time they spend submitting bank information to less than 60 seconds.

UK business borrowing contracts by 1.9%

Borrowing by UK businesses from high street banks contracted by 1.9% over the last 12 months, according to the latest figures.

The business finance update for October 2018 from UK Finance revealed that borrowing had decreased to £263bn.

However, deposits in high street business accounts increased by 3.4% over the same period to £379.1bn.

Avamore Capital completes its largest loan Avamore Capital has completed its largest loan after providing a £6.3m bridging facility to support a residential development in Southampton.

The facility was provided at 61.4% LTV, when the snagging works are complete.

The client will use the funding to repay an existing lender and to release working capital to the developer and its shareholders.

Octopus originates £100m of new lending in record month Octopus Property originated £100m of new lending in October, a record for the business.

Fund your clients faster.

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

Search: NatWest Brokers

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

Search ‘Esme loans’ Applicant must be

£

£

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

14 | NACFB Magazine

NACFB Magazine | 15

Commercial Finance

Former Lloyds Bank manager joins Growth Street

Growth Street has appointed Gareth Pritchard as its first business development manager covering Wales and south-west England.

Gareth joins from Lloyds Bank, where he was a regional manager for business development within the SME division.

In his new role, Gareth will be based in Cardiff and educating the Welsh and South West of England markets on Growth Street’s business finance product GrowthLine.

Rural Insurance partners with UKAF

LendInvest names Colchester as BTL hotspot Colchester has been christened as the top buy-to-let area across England and Wales, according to the latest research.

The LendInvest buy-to-let index ranked 105 postcode areas based on a combination of capital value growth, transaction volumes, rental yield and rental price growth.

Stockport, Manchester, Birmingham and Canterbury completed the rest of the top five in the quarterly report.

Arc & Co arranges £60m of commercial and development loans in Q3 The specialist finance brokerage arranged more than £121m of funding for its clients in the same period across its three core areas (development and commercial, residential, and marine and aviation).

Arc & Co arranged 66 loans in the period, with an average loan size of over £1.8m.

Rural Insurance has partnered with UK Agricultural Finance (UKAF) to provide farmers and landowners with access to flexible and secured finance solutions.

Harrogate-based Rural Insurance supplies insurance to the agricultural and rural economic sector.

It hopes the partnership with UKAF will allow farmers to secure capital in order to grow and innovate their businesses to ensure they remain competitive and profitable.

Together partners with Mortgage Intelligence

iwoca forms Open Banking partnership with Lloyds

Mortgage Intelligence has announced the addition of Together to its panel, as the specialist lender continues to widen its distribution.

Together’s buy-to-let range and first charge residential products will now be available to Mortgage Intelligence’s network and club advisers.

Mortgage Intelligence members can now access Together’s online portal My Broker Venue, where they can submit cases and receive a full, instant decision-in-principle.

Business lender iwoca has released Open Banking for customers with a Lloyds Bank account.

By securely linking their Lloyds Bank data, business owners can now provide iwoca up to five years of transaction history in just a few minutes.

This will speed up the lender’s application process for Lloyds customers, reducing the time they spend submitting bank information to less than 60 seconds.

UK business borrowing contracts by 1.9%

Borrowing by UK businesses from high street banks contracted by 1.9% over the last 12 months, according to the latest figures.

The business finance update for October 2018 from UK Finance revealed that borrowing had decreased to £263bn.

However, deposits in high street business accounts increased by 3.4% over the same period to £379.1bn.

Avamore Capital completes its largest loan Avamore Capital has completed its largest loan after providing a £6.3m bridging facility to support a residential development in Southampton.

The facility was provided at 61.4% LTV, when the snagging works are complete.

The client will use the funding to repay an existing lender and to release working capital to the developer and its shareholders.

Octopus originates £100m of new lending in record month Octopus Property originated £100m of new lending in October, a record for the business.

Fund your clients faster.

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

Search: NatWest Brokers

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

Search ‘Esme loans’ Applicant must be

£

£

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

14 | NACFB Magazine

NACFB Magazine | 15

Cover Story | feature

Association caps off a strong year in style We stage our largest-ever Gala Dinner and Awards Ceremony Over 700 people attended the NACFB’s record-breaking Gala Dinner on 29th November, rounding off a bumper year for the Association in both grandeur and style.

16 | NACFB Magazine

L

eading figures from across the commercial finance industry descended upon the Park Plaza Westminster for an evening of reflection, celebration and, above all, fun. The hotel remains one of the very few venues large enough to fit all guests into one ballroom. The event provides an annual forum for the UK’s most highly regarded lenders and dynamic brokers to engage socially and celebrate the successes of their collaboration.

Following a pre-dinner drinks reception sponsored by MFS, NACFB chair Paul Goodman addressed attendees, thanking both lenders and brokers for their continued support and backing as the Association transitions into 2019. Paul welcomed to the stage Andy Bishop, national director of business development SME banking from headline sponsor Lloyds Bank. Andy shared his continued belief in the lender-broker dynamic and its importance – now more than ever – in helping Britain to prosper.

The sell-out event was hosted by the irrepressible veteran broadcaster Gyles Brandreth. Returning to oversee proceedings for a second year, the popular compere shared his experiences from the political and business world. Coupled with his wry wit and affectionate ribbing, Gyles set the tone for a fun-filled evening.

The evening featured a silent auction sponsored by Growth Street, with all proceeds going to the NACFB’s charity of the year Tommy’s. From the donations received on the evening, the Association was proud to raise nearly £15,000 towards the charity that helps fund research into stillbirth, premature birth and miscarriage, while providing valuable support for parents-to-be.

Graham Toy, chief executive officer at the NACFB, said “We are thrilled the Association’s community was able to raise such an incredible amount towards a deserving charity.” Graham continued:

“Professor Andrew Shennan OBE made the short walk across Westminster Bridge from St Thomas’ Hospital to share with us the moving story of the work both he and the Tommy’s team carry out.”

received the Outstanding Achievement award in a year that has seen him take a step back from the NACFB to focus on his new lending enterprise. The full list of winners can be found overleaf.

The NACFB Awards Ceremony provides an annual opportunity for the Association’s brokers to recognise Patron lenders. What makes the NACFB Awards Ceremony different from others in the industry is that there is no fixed shortlist, so there can often be unexpected results from the voting. The NACFB saw dozens of names put forward for awards in some categories, reminding us that there are many lenders deserving of plaudits.

As with previous years, a wide range of entertainment served as a back drop to the occasion, a live band ensured popular film soundtracks and covers continued well into the night in a lively after party sponsored by Aldermore.

The Association gave special recognition to two industry titans for their dedication and service to the commercial lending community. The Lifetime Contribution award went to Graham Hill, who retires from the board of directors this year after 14 years of service. David Whittaker

Reflecting on the evening, Norman Chambers, managing director at NACFB, said “On behalf of the board of directors – and the executive and head office team – the Association would like to extend our sincerest gratitude to all those who made this year’s Gala Dinner a genuine success.

dinner drinks, the Growth Street team for sponsoring the evening’s silent auction, as well as the Aldermore team for sponsoring the after party.”

Norman also offered appreciation to all those who helped contribute to the evening’s success: “Particular recognition should go to all the Patrons who were shortlisted for awards and, of course, those lenders who took one home with them. Finally, the Association is very grateful to all the NACFB brokerages who sponsored an award this year.”

Next year’s Gala Dinner is already confirmed, and we hope to build upon the success of 2018. Save the date – 28th November 2019 – as it’s sure to be another sell out, so do book early to avoid disappointment.

“We would also like to say a big thank you to our headline sponsor Lloyds Bank for their ongoing support, the MFS team for sponsoring the pre-

NACFB Magazine | 17

Cover Story | feature

Association caps off a strong year in style We stage our largest-ever Gala Dinner and Awards Ceremony Over 700 people attended the NACFB’s record-breaking Gala Dinner on 29th November, rounding off a bumper year for the Association in both grandeur and style.

16 | NACFB Magazine

L

eading figures from across the commercial finance industry descended upon the Park Plaza Westminster for an evening of reflection, celebration and, above all, fun. The hotel remains one of the very few venues large enough to fit all guests into one ballroom. The event provides an annual forum for the UK’s most highly regarded lenders and dynamic brokers to engage socially and celebrate the successes of their collaboration.

Following a pre-dinner drinks reception sponsored by MFS, NACFB chair Paul Goodman addressed attendees, thanking both lenders and brokers for their continued support and backing as the Association transitions into 2019. Paul welcomed to the stage Andy Bishop, national director of business development SME banking from headline sponsor Lloyds Bank. Andy shared his continued belief in the lender-broker dynamic and its importance – now more than ever – in helping Britain to prosper.

The sell-out event was hosted by the irrepressible veteran broadcaster Gyles Brandreth. Returning to oversee proceedings for a second year, the popular compere shared his experiences from the political and business world. Coupled with his wry wit and affectionate ribbing, Gyles set the tone for a fun-filled evening.

The evening featured a silent auction sponsored by Growth Street, with all proceeds going to the NACFB’s charity of the year Tommy’s. From the donations received on the evening, the Association was proud to raise nearly £15,000 towards the charity that helps fund research into stillbirth, premature birth and miscarriage, while providing valuable support for parents-to-be.

Graham Toy, chief executive officer at the NACFB, said “We are thrilled the Association’s community was able to raise such an incredible amount towards a deserving charity.” Graham continued:

“Professor Andrew Shennan OBE made the short walk across Westminster Bridge from St Thomas’ Hospital to share with us the moving story of the work both he and the Tommy’s team carry out.”

received the Outstanding Achievement award in a year that has seen him take a step back from the NACFB to focus on his new lending enterprise. The full list of winners can be found overleaf.

The NACFB Awards Ceremony provides an annual opportunity for the Association’s brokers to recognise Patron lenders. What makes the NACFB Awards Ceremony different from others in the industry is that there is no fixed shortlist, so there can often be unexpected results from the voting. The NACFB saw dozens of names put forward for awards in some categories, reminding us that there are many lenders deserving of plaudits.

As with previous years, a wide range of entertainment served as a back drop to the occasion, a live band ensured popular film soundtracks and covers continued well into the night in a lively after party sponsored by Aldermore.

The Association gave special recognition to two industry titans for their dedication and service to the commercial lending community. The Lifetime Contribution award went to Graham Hill, who retires from the board of directors this year after 14 years of service. David Whittaker

Reflecting on the evening, Norman Chambers, managing director at NACFB, said “On behalf of the board of directors – and the executive and head office team – the Association would like to extend our sincerest gratitude to all those who made this year’s Gala Dinner a genuine success.

dinner drinks, the Growth Street team for sponsoring the evening’s silent auction, as well as the Aldermore team for sponsoring the after party.”

Norman also offered appreciation to all those who helped contribute to the evening’s success: “Particular recognition should go to all the Patrons who were shortlisted for awards and, of course, those lenders who took one home with them. Finally, the Association is very grateful to all the NACFB brokerages who sponsored an award this year.”

Next year’s Gala Dinner is already confirmed, and we hope to build upon the success of 2018. Save the date – 28th November 2019 – as it’s sure to be another sell out, so do book early to avoid disappointment.

“We would also like to say a big thank you to our headline sponsor Lloyds Bank for their ongoing support, the MFS team for sponsoring the pre-

NACFB Magazine | 17

The full 2018 NACFB Awards roll of honour is‌ Buy to Let Lender of the Year Sponsored by Mortgages for Business

Best Development Lender of the Year Sponsored by Stonehouse Property Finance

Commercial Mortgage Lender of the Year Sponsored by Watts Commercial Finance

Most Innovative Lender of the Year Sponsored by White Rose Finance Group

Small Funder of the Year Sponsored by the NACFB

Specialist Lender of the Year Sponsored by GPS Financial

Shortlisted: InterBay Commercial UK Paragon Shawbrook Bank

Shortlisted: Assetz Capital Octopus Property United Trust Bank

Shortlisted: Aldermore InterBay Commercial UK NatWest

Shortlisted: Aldermore Amicus Commercial Mortgages Octane

Shortlisted: Esme Loans Funding Circle Growth Street

Shortlisted: Aldermore InterBay Commercial UK United Trust Bank

Winner: Precise Mortgages

Winner: Aldermore

Winner: Lloyds Bank Commercial Banking

Winner: LendInvest

Winner: iwoca

Winner: Together Money

Leasing & Asset Provider of the Year Sponsored by Asset Finance Solutions

Business Bank of the Year Sponsored by Stonehouse Property Finance

Factor & Invoice Discounter of the Year Sponsored by Goodman Corporate Finance

Short Term Lender of the Year Sponsored by Century 10 Real Estate Finance

Unsecured Funder of the Year Synergy Commercial Finance

Newcomer/New Entrant of the Year Sponsored by Commercial Mortgages Solutions

Shortlisted: Close Brothers Asset Finance Hitachi Capital Business Finance Lloyds Bank Commercial Banking

Shortlisted: Aldermore Barclays Lloyds Bank Commercial Banking

Shortlisted: Aldermore Lloyds Bank Commercial Finance NatWest

Shortlisted: Aldermore Masthaven Bank Precise Mortgages

Shortlisted: Esme Loans Fleximize Spotcap

Shortlisted: Amicus Commercial Mortgages Mercia Octane

Winner: Investec Asset Finance

Winner: NatWest

Winner: Bibby Financial Services

Winner: Shawbrook Bank

Winner: Funding Circle Lifetime Contribution Award: Graham Hill

18 | NACFB Magazine

Winner: Esme Loans Outstanding Achievement Award: David Whittaker

NACFB Magazine | 19

The full 2018 NACFB Awards roll of honour is‌ Buy to Let Lender of the Year Sponsored by Mortgages for Business

Best Development Lender of the Year Sponsored by Stonehouse Property Finance

Commercial Mortgage Lender of the Year Sponsored by Watts Commercial Finance

Most Innovative Lender of the Year Sponsored by White Rose Finance Group

Small Funder of the Year Sponsored by the NACFB

Specialist Lender of the Year Sponsored by GPS Financial

Shortlisted: InterBay Commercial UK Paragon Shawbrook Bank

Shortlisted: Assetz Capital Octopus Property United Trust Bank

Shortlisted: Aldermore InterBay Commercial UK NatWest

Shortlisted: Aldermore Amicus Commercial Mortgages Octane

Shortlisted: Esme Loans Funding Circle Growth Street

Shortlisted: Aldermore InterBay Commercial UK United Trust Bank

Winner: Precise Mortgages

Winner: Aldermore

Winner: Lloyds Bank Commercial Banking

Winner: LendInvest

Winner: iwoca

Winner: Together Money

Leasing & Asset Provider of the Year Sponsored by Asset Finance Solutions

Business Bank of the Year Sponsored by Stonehouse Property Finance

Factor & Invoice Discounter of the Year Sponsored by Goodman Corporate Finance

Short Term Lender of the Year Sponsored by Century 10 Real Estate Finance

Unsecured Funder of the Year Synergy Commercial Finance

Newcomer/New Entrant of the Year Sponsored by Commercial Mortgages Solutions

Shortlisted: Close Brothers Asset Finance Hitachi Capital Business Finance Lloyds Bank Commercial Banking

Shortlisted: Aldermore Barclays Lloyds Bank Commercial Banking

Shortlisted: Aldermore Lloyds Bank Commercial Finance NatWest

Shortlisted: Aldermore Masthaven Bank Precise Mortgages

Shortlisted: Esme Loans Fleximize Spotcap

Shortlisted: Amicus Commercial Mortgages Mercia Octane

Winner: Investec Asset Finance

Winner: NatWest

Winner: Bibby Financial Services

Winner: Shawbrook Bank

Winner: Funding Circle Lifetime Contribution Award: Graham Hill

18 | NACFB Magazine

Winner: Esme Loans Outstanding Achievement Award: David Whittaker

NACFB Magazine | 19

Top | story Our pick of the latest Patron news

Brokers view tax reform as more important to bridging market growth than Brexit Over half of brokers (52%) believe that reform to tax legislation for property investors would boost the bridging market. This is twice as many as those view who the outcome of Brexit negotiations (27%) as the most important factor in driving growth in the market, according to a survey of 200 brokers by InterBay Commercial, part of specialist lending group OneSavings Bank.

Despite the current focus on Brexit from policymakers as the negotiations reach crunch point, InterBay’s research indicates the need for the government to consider taxation changes to support the domestic property market in its upcoming Budget.

Reversing recent tax reform that has hit landlords and the wider buy-tolet market was the top priority for brokers. One in five (19%) felt that the removal of the additional 3% stamp duty land tax for landlords would help to drive growth in the market, whilst, surprisingly, only 16% called for the reversal of the recent changes to the tax treatment of mortgage interest for landlords.

Other changes to tax legislation highlighted by brokers included the reduction or removal of capital gains tax, a government subsidy for small scale developers, and a financial subsidy for housebuilding across all tenures. In addition, some brokers believed that greater regulation

20 | NACFB Magazine

Commercial mortgages without the hassle No nonsense, no red tape

in the sector would help to boost growth in the bridging market.

In comparison, the survey revealed that just 27% of brokers saw Brexit as the biggest potential support for market growth; 15% of brokers thought that no Brexit at all would be the most beneficial element, one in ten thought a ‘soft Brexit’ would positively impact the sector, while just 3% saw a ‘hard Brexit’ as positive.

We’ve got commercial mortgages covered. We’re breaking through barriers to give your customers a decision in principle within 24 hours.

Loans from as low as 5.9%.

Darrell Walker, Head of Sales, InterBay Commercial said, “The swathe of tax changes in recent times have left an indelible mark on the bridging and wider buy-to-let market. Some landlords have been forced to recoup higher tax costs through higher rents, others no longer have the funds to refurbish properties, and many amateurs have left the market altogether.

“At a time when the supply of affordable property across all tenures remains a key economic challenge across the country, taking steps to encourage, rather than deter investment into the sector would go some way to alleviating our current housing crisis. Taking a second look at the tax burden investors must shoulder is a good place to start.

Whilst Brexit is understandably top of the Government’s to do list as the Chancellor prepares for the Budget, supporting the property market cannot and must not be forgotten.”

Welcome to fast, flexible finance

Reversing recent tax reform that has hit landlords and the wider buy-to-let market was the top priority for brokers

Find out more at assetzcapital.co.uk/borrow or call 0800 470 0432 Assetz SME Capital Ltd is a company registered in England and Wales with company number 08007287. Assetz SME Capital Ltd is authorised and regulated by the Financial Conduct Authority (Reg No: 724996). ‘Assetz Capital’ is a trading name of Assetz SME Capital Ltd. Assetz SME Capital Ltd is registered with the Office of the Information Commissioner (Reg No: Z3338899) for data protection purposes.

Top | story Our pick of the latest Patron news

Brokers view tax reform as more important to bridging market growth than Brexit Over half of brokers (52%) believe that reform to tax legislation for property investors would boost the bridging market. This is twice as many as those view who the outcome of Brexit negotiations (27%) as the most important factor in driving growth in the market, according to a survey of 200 brokers by InterBay Commercial, part of specialist lending group OneSavings Bank.

Despite the current focus on Brexit from policymakers as the negotiations reach crunch point, InterBay’s research indicates the need for the government to consider taxation changes to support the domestic property market in its upcoming Budget.

Reversing recent tax reform that has hit landlords and the wider buy-tolet market was the top priority for brokers. One in five (19%) felt that the removal of the additional 3% stamp duty land tax for landlords would help to drive growth in the market, whilst, surprisingly, only 16% called for the reversal of the recent changes to the tax treatment of mortgage interest for landlords.

Other changes to tax legislation highlighted by brokers included the reduction or removal of capital gains tax, a government subsidy for small scale developers, and a financial subsidy for housebuilding across all tenures. In addition, some brokers believed that greater regulation

20 | NACFB Magazine

Commercial mortgages without the hassle No nonsense, no red tape

in the sector would help to boost growth in the bridging market.

In comparison, the survey revealed that just 27% of brokers saw Brexit as the biggest potential support for market growth; 15% of brokers thought that no Brexit at all would be the most beneficial element, one in ten thought a ‘soft Brexit’ would positively impact the sector, while just 3% saw a ‘hard Brexit’ as positive.

We’ve got commercial mortgages covered. We’re breaking through barriers to give your customers a decision in principle within 24 hours.

Loans from as low as 5.9%.

Darrell Walker, Head of Sales, InterBay Commercial said, “The swathe of tax changes in recent times have left an indelible mark on the bridging and wider buy-to-let market. Some landlords have been forced to recoup higher tax costs through higher rents, others no longer have the funds to refurbish properties, and many amateurs have left the market altogether.

“At a time when the supply of affordable property across all tenures remains a key economic challenge across the country, taking steps to encourage, rather than deter investment into the sector would go some way to alleviating our current housing crisis. Taking a second look at the tax burden investors must shoulder is a good place to start.

Whilst Brexit is understandably top of the Government’s to do list as the Chancellor prepares for the Budget, supporting the property market cannot and must not be forgotten.”

Welcome to fast, flexible finance

Reversing recent tax reform that has hit landlords and the wider buy-to-let market was the top priority for brokers

Find out more at assetzcapital.co.uk/borrow or call 0800 470 0432 Assetz SME Capital Ltd is a company registered in England and Wales with company number 08007287. Assetz SME Capital Ltd is authorised and regulated by the Financial Conduct Authority (Reg No: 724996). ‘Assetz Capital’ is a trading name of Assetz SME Capital Ltd. Assetz SME Capital Ltd is registered with the Office of the Information Commissioner (Reg No: Z3338899) for data protection purposes.

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

Precise launches refurb BTL product Tom Belger Senior reporter Bridging & Commercial

T

he product targets landlords looking to maximise their rental yields by refurbishing a property before renting it out, as well as enabling them to take value from the property to reinvest elsewhere.

The specialist lender’s new product will give customers access to bridging finance rates, while knowing that they have an exit on to a long-term BTL mortgage already in place once the work has been completed.

one application form will produce two offers – one for the bridge and one for the BTL dedicated team of expert underwriters to provide help every step of the way the same valuer for both the initial valuation and the reinspection (where possible) one conveyancer and discounted legal fees two procuration fees – one for the bridge and one for the BTL

The proposition is only available through mortgage intermediaries and is suitable for personal, limited company and HMO applicants.

an exit already in place and the price of the BTL at offer will be the price they get on completion, providing there is no change in circumstances and the property meets the expected valuation following refurbishment

However, customers must be confident that they can complete any refurbishment work within the BTL offer validity period.

landlords can borrow up to 75% LTV on the bridge and 80% of the post-works valuation on the exit BTL to help optimise cash flow.

Precise has also designed a streamlined process which includes:

Alan Cleary, managing director at Precise, said that this product gave landlords a new way of increasing rental yields.

“Landlords have traditionally faced difficulty in securing finance to refurbish a property before letting it out.

Our bridging loan helped Sue to buy a rundown house at auction in 28 days.

Now she’s sold it for a tidy profit.

Lending for the new normal.

“This product enables them to do so, and it is backed up with a host of features which are designed to make applying for it as easy as possible.”

Crystal Specialist Finance helped Precise during the piloting of the product and completed a refurb BTL case in 17 days from start to finish.

“We have a very happy client, a positive outcome and a good experience,” said Jo Breeden, managing director at Crystal.

“We have plenty more of these cases to send to Precise Mortgages.”

Bridging rates start from 0.49% per month and no mortgage repayments are required while the refurbishment works are being completed.

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

Find out how we do things differently at togethermoney.com/bridging or call 0333 455 1787 For professional intermediary use only.

‘Sue’ has been used for illustrative purposes only.

22 | NACFB Magazine

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

Precise launches refurb BTL product Tom Belger Senior reporter Bridging & Commercial

T

he product targets landlords looking to maximise their rental yields by refurbishing a property before renting it out, as well as enabling them to take value from the property to reinvest elsewhere.

The specialist lender’s new product will give customers access to bridging finance rates, while knowing that they have an exit on to a long-term BTL mortgage already in place once the work has been completed.

one application form will produce two offers – one for the bridge and one for the BTL dedicated team of expert underwriters to provide help every step of the way the same valuer for both the initial valuation and the reinspection (where possible) one conveyancer and discounted legal fees two procuration fees – one for the bridge and one for the BTL

The proposition is only available through mortgage intermediaries and is suitable for personal, limited company and HMO applicants.

an exit already in place and the price of the BTL at offer will be the price they get on completion, providing there is no change in circumstances and the property meets the expected valuation following refurbishment

However, customers must be confident that they can complete any refurbishment work within the BTL offer validity period.

landlords can borrow up to 75% LTV on the bridge and 80% of the post-works valuation on the exit BTL to help optimise cash flow.

Precise has also designed a streamlined process which includes:

Alan Cleary, managing director at Precise, said that this product gave landlords a new way of increasing rental yields.

“Landlords have traditionally faced difficulty in securing finance to refurbish a property before letting it out.

Our bridging loan helped Sue to buy a rundown house at auction in 28 days.

Now she’s sold it for a tidy profit.

Lending for the new normal.

“This product enables them to do so, and it is backed up with a host of features which are designed to make applying for it as easy as possible.”

Crystal Specialist Finance helped Precise during the piloting of the product and completed a refurb BTL case in 17 days from start to finish.

“We have a very happy client, a positive outcome and a good experience,” said Jo Breeden, managing director at Crystal.

“We have plenty more of these cases to send to Precise Mortgages.”

Bridging rates start from 0.49% per month and no mortgage repayments are required while the refurbishment works are being completed.

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

Find out how we do things differently at togethermoney.com/bridging or call 0333 455 1787 For professional intermediary use only.

‘Sue’ has been used for illustrative purposes only.

22 | NACFB Magazine

Case Studies

For British farmers, access to capital is vital UK Agricultural Finance recently announced that it had secured additional funds for loans up to seven years – in addition to its bridge lending book – to help the rural economy access muchneeded funds.

A

gricultural loans have recently got more attention given the size of the opportunity: average bridge and term loans are in the region of £2m and £500k, respectively. One of the challenges is accessing finance, as the unique nature of farming makes it difficult for inflexible lending systems to cope. However, brokers able to access specialist business lenders can really help their clients build their businesses.

Farm finance is an attractive sector for brokers, as competition is limited, loans tend to be large and secured against real assets. Also, the ability to raise cash by parcelling up land, without damaging the whole business, makes for more

favourable outcomes if the business plan doesn’t develop as expected.

Rural property and businesses are a complex area, given the challenges that farmers face, but have great appeal. Brokers should look to work and build relationships with specialist lending teams that understand business lending against agricultural property where ‘one size fits all’ doesn’t work.

Access to funding can help farmers diversify, acquire more land, build renewable energy projects, restructure, buy more livestock, help families with generational transfer or provide tenant farmers with capital to purchase their farm.

Brokers with farming clients should

reach out to NACFB Patron UK Agricultural Finance, which recently announced that it had secured a further £150m of funding. This can be accessed quickly, without the uncertainty of P2P and provide a much wider range of products than many non-specialist lenders.

Rob Suss Co-founder UK Agricultural Finance

Case Studies

For British farmers, access to capital is vital UK Agricultural Finance recently announced that it had secured additional funds for loans up to seven years – in addition to its bridge lending book – to help the rural economy access muchneeded funds.

A

gricultural loans have recently got more attention given the size of the opportunity: average bridge and term loans are in the region of £2m and £500k, respectively. One of the challenges is accessing finance, as the unique nature of farming makes it difficult for inflexible lending systems to cope. However, brokers able to access specialist business lenders can really help their clients build their businesses.

Farm finance is an attractive sector for brokers, as competition is limited, loans tend to be large and secured against real assets. Also, the ability to raise cash by parcelling up land, without damaging the whole business, makes for more

favourable outcomes if the business plan doesn’t develop as expected.

Rural property and businesses are a complex area, given the challenges that farmers face, but have great appeal. Brokers should look to work and build relationships with specialist lending teams that understand business lending against agricultural property where ‘one size fits all’ doesn’t work.

Access to funding can help farmers diversify, acquire more land, build renewable energy projects, restructure, buy more livestock, help families with generational transfer or provide tenant farmers with capital to purchase their farm.

Brokers with farming clients should

reach out to NACFB Patron UK Agricultural Finance, which recently announced that it had secured a further £150m of funding. This can be accessed quickly, without the uncertainty of P2P and provide a much wider range of products than many non-specialist lenders.

Rob Suss Co-founder UK Agricultural Finance

CASE STUDIES

Case Study UK Agricultural Finance recently provided a £700,000 term loan at 55% LTV in the Midlands to help a farming family restructure its borrowings and avoid being squeezed on price by a national housebuilder.

land to cover their borrowings, but appreciated that they needed financial support to allow them to sell in a timeframe to maximise the sale price and not succumb to the rather forceful negotiating tactics of the national housebuilder.

When an existing lender put pressure on a farming family to close out their facility, they reached out to UK Agricultural Finance to provide capital to restructure their existing creditors, pay a tax bill and not be rushed in their negotiation with a national housebuilder that was deliberately dragging its feet.

The family had valuable land and agricultural properties, but wanted the ability to market the land sensibly.

The family’s existing bank unfortunately did not take the time to visit them, understand the nuances of their business or assess what support they could provide. UK Agricultural Finance – following its site visit – was able to issue an immediate offer in principle and provide the financing in a matter of days, allowing the family to focus on their business with real clarity going forward.

The team at UK Agricultural Finance, who pride themselves on faceto-face underwriting, visited the family at their farm and immediately understood the value in the family’s very marketable agricultural land and properties, and was able to take a holistic view of their requirements.

Building bridges with brokers

Graham Noble, co-founder of UK Agricultural Finance, said: “Our specialist agricultural underwriters enjoyed meeting a committed farming family, which helped us make an informed, responsible underwriting decision to provide much-needed rural finance to allow this family to sustain, grow and improve their business.”

OFFERING FREE

The team liked the fact that the family had decided to sell some

VALUATIONS ON

MFS

®

RESIDENTIAL BRIDGING LOANS

Experts in fast, flexible, bespoke bridging loans MFS is a specialist in short-term finance, providing bespoke bridging loans that are tailored to each case. We place great value on building strong partnerships with brokers, which is why we offer many rewards to the ones we work with.

Award-winning support and expertise you can count on Incentives for both new and existing clients Experienced underwriters on hand Exceptional broker retention rates Responses within hours of a query

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

26 | NACFB Magazine

CASE STUDIES

Case Study UK Agricultural Finance recently provided a £700,000 term loan at 55% LTV in the Midlands to help a farming family restructure its borrowings and avoid being squeezed on price by a national housebuilder.

land to cover their borrowings, but appreciated that they needed financial support to allow them to sell in a timeframe to maximise the sale price and not succumb to the rather forceful negotiating tactics of the national housebuilder.

When an existing lender put pressure on a farming family to close out their facility, they reached out to UK Agricultural Finance to provide capital to restructure their existing creditors, pay a tax bill and not be rushed in their negotiation with a national housebuilder that was deliberately dragging its feet.

The family had valuable land and agricultural properties, but wanted the ability to market the land sensibly.

The family’s existing bank unfortunately did not take the time to visit them, understand the nuances of their business or assess what support they could provide. UK Agricultural Finance – following its site visit – was able to issue an immediate offer in principle and provide the financing in a matter of days, allowing the family to focus on their business with real clarity going forward.

The team at UK Agricultural Finance, who pride themselves on faceto-face underwriting, visited the family at their farm and immediately understood the value in the family’s very marketable agricultural land and properties, and was able to take a holistic view of their requirements.

Building bridges with brokers

Graham Noble, co-founder of UK Agricultural Finance, said: “Our specialist agricultural underwriters enjoyed meeting a committed farming family, which helped us make an informed, responsible underwriting decision to provide much-needed rural finance to allow this family to sustain, grow and improve their business.”

OFFERING FREE

The team liked the fact that the family had decided to sell some

VALUATIONS ON

MFS

®

RESIDENTIAL BRIDGING LOANS

Experts in fast, flexible, bespoke bridging loans MFS is a specialist in short-term finance, providing bespoke bridging loans that are tailored to each case. We place great value on building strong partnerships with brokers, which is why we offer many rewards to the ones we work with.

Award-winning support and expertise you can count on Incentives for both new and existing clients Experienced underwriters on hand Exceptional broker retention rates Responses within hours of a query

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

26 | NACFB Magazine

CASE STUDIES

Evolving with our introducers For brokers across the UK, meeting the challenges of an everevolving market requires more than just hard work. Changes in technology and the wider landscape have pushed the finance sector into new territory, and learning how to adapt is crucial in serving their clients’ changing needs.

Jeremy Crinall Regional Manager Funding Circle At Funding Circle, we’ve worked with introducers since the beginning.

We’ve evolved with them, building closer, even more valuable relationships. Last autumn, we launched our Business Champion programme, and in Q3 this year we hit £1bn in lending through our introducer channel.

One introducer we’ve worked with is Christie Finance, a specialist commercial finance broker which expanded into asset finance and unsecured lending in early 2017 following a growing demand within these sectors. It began working with Funding Circle in October 2017.

Since then, it has introduced more than 20 clients who’ve proceeded to take a Funding Circle loan. It has benefited from marketing support and quick decisions. By sharing a tailored service, it has been a fruitful relationship for both sides.

28 | NACFB Magazine

“We have an excellent relationship with Funding Circle,” said Shaun Watts, finance consultant at Christie Finance. “The team is incredibly easy to work with and their genuine desire to help small businesses grow mirrors our own goals. Our aim is to provide appropriate funding solutions satisfying every client’s requirement in a timely manner. We choose to introduce our clients to Funding Circle because we are confident decisions will be made quickly and the quality of service received helps to manage our client’s expectations.”

Ultimately, though, the programme is designed to help small businesses get better, faster access to finance.

Kevin Wilson, owner of three convenience stores in Leeds and Bradford, was looking to expand to a new store and came to Christie Finance earlier this year. He needed to borrow for refurbishments, new stock and extra staff. Having spoken to Shaun, he applied for an unsecured loan and received an offer from Funding Circle in July this year.

“I was advised to work with a commercial finance broker by a

friend who accessed funding through a broker,” said Kevin. “Working with Shaun has been brilliant and he got me in touch with Funding Circle, which was definitely the right option for my business.

“The application was simple and straightforward; the rate was really attractive.”

We want to keep improving and driving value for our introducers as the market continues to change. By working closer together, Business Champions gain a more intimate understanding of Funding Circle and how the product works, helping them to know which clients to introduce and how to set expectations. The businesses can also benefit from a fee discount, as well as quick decisions.

Our next objective is to build out our regional presence to make more team members available across the country.

By focusing on user experience, we can give introducers a more efficient, valuable service. That, in turn, will help them better serve their clients and together we can give small businesses the support they need to thrive.

CASE STUDIES

Evolving with our introducers For brokers across the UK, meeting the challenges of an everevolving market requires more than just hard work. Changes in technology and the wider landscape have pushed the finance sector into new territory, and learning how to adapt is crucial in serving their clients’ changing needs.

Jeremy Crinall Regional Manager Funding Circle At Funding Circle, we’ve worked with introducers since the beginning.

We’ve evolved with them, building closer, even more valuable relationships. Last autumn, we launched our Business Champion programme, and in Q3 this year we hit £1bn in lending through our introducer channel.

One introducer we’ve worked with is Christie Finance, a specialist commercial finance broker which expanded into asset finance and unsecured lending in early 2017 following a growing demand within these sectors. It began working with Funding Circle in October 2017.

Since then, it has introduced more than 20 clients who’ve proceeded to take a Funding Circle loan. It has benefited from marketing support and quick decisions. By sharing a tailored service, it has been a fruitful relationship for both sides.

28 | NACFB Magazine

“We have an excellent relationship with Funding Circle,” said Shaun Watts, finance consultant at Christie Finance. “The team is incredibly easy to work with and their genuine desire to help small businesses grow mirrors our own goals. Our aim is to provide appropriate funding solutions satisfying every client’s requirement in a timely manner. We choose to introduce our clients to Funding Circle because we are confident decisions will be made quickly and the quality of service received helps to manage our client’s expectations.”

Ultimately, though, the programme is designed to help small businesses get better, faster access to finance.

Kevin Wilson, owner of three convenience stores in Leeds and Bradford, was looking to expand to a new store and came to Christie Finance earlier this year. He needed to borrow for refurbishments, new stock and extra staff. Having spoken to Shaun, he applied for an unsecured loan and received an offer from Funding Circle in July this year.

“I was advised to work with a commercial finance broker by a

friend who accessed funding through a broker,” said Kevin. “Working with Shaun has been brilliant and he got me in touch with Funding Circle, which was definitely the right option for my business.

“The application was simple and straightforward; the rate was really attractive.”

We want to keep improving and driving value for our introducers as the market continues to change. By working closer together, Business Champions gain a more intimate understanding of Funding Circle and how the product works, helping them to know which clients to introduce and how to set expectations. The businesses can also benefit from a fee discount, as well as quick decisions.

Our next objective is to build out our regional presence to make more team members available across the country.

By focusing on user experience, we can give introducers a more efficient, valuable service. That, in turn, will help them better serve their clients and together we can give small businesses the support they need to thrive.

CASE STUDIES

CASE STUDIES

Is there anything asset finance can’t be used for?

At Davenham, we know the trials and tribulations that business owners go through in order to make their company successful, and while this empathetic approach has played a core part across most of the proposals we have financed over the past five years, for a recent deal in particular, our reputation in corporate transactions really was the overriding factor that won us the work, and more importantly, got the finance raised for the client.

Paul Burke Managing director Davenham Asset Finance

I

t’s a well-known fact that traditional finance arms are still putting up tough barriers when it comes to lending money, which has paved the way for alternative finance providers such as ourselves.

In July 2018, the FLA revealed that the market was worth £32bn.

We recently supported an SME to raise some capital for a truly alternative purpose: a management buy in.

For this deal, our South East-based sales director Paul Lovelock was approached by one of his business contacts, a local asset finance broker, whose client required £400,000 via asset finance as part of an overall million-pound-plus management buy in deal that he was confident we were going to be able to assist with.

The original directors of the business, who set up the company over 40

30 | NACFB Magazine

years ago – providing services such as prototype development and batch production of components for bluechip clients in the aerospace sector and the Ministry of Defence – were looking to retire, having built up the business to a multi-million-pound turnover during this time. A new management team had recognised the massive potential to grow the business further and wanted to purchase the firm. The deal had been agreed at over £1m and of the £400,000 funded through asset finance, Davenham helped to raise £300,000. However, we took the lead in project managing the entire amount – showcasing our attention to detail, structuring abilities and customer service capabilities.

There were a number of challenges that came up as part of this complicated asset finance transaction: First and foremost there were over 80 assets made up of different types of engineering machinery that needed to be individually documented. Furthermore, we had to determine the value of each of these 80 assets bearing in mind

‘value’ in all its guises. To help the Davenham credit team consider and assess these risks, we appointed Tallons Associates (an experienced Manchester-based firm of specialist asset valuers) to undertake a detailed valuation which included visiting the premises, inspection and verification etc.

Ensuring we obtained clear title to the assets concerned was imperative, but caused major challenges due to the age of certain assets. A further challenge was the overall sensitivity element of the deal – staff not being aware of the impending management change (understandably until the deal had been approved) meant we could not simply call the finance team for invoices, for example, to source the original purchase paperwork or legal asset ownership documentation.

Davenham managed this sensitivity by ensuring that our teams were fully aware of the project intricacies, and only dealing with the client’s senior management when it came to requesting information.

As there were only a few other advisers, we took a lead role in the responsibility of coordinating and completing the deal with the other funders (such as the bank), including detailed negotiations to manage creditor priorities, debentures etc. In dealing with the lawyers, we worked on drafting and negotiating certain elements of the SPA to include the required warranties, thus focusing on minimising title risk and ensuring that the structuring, documentation and ultimately the provision of the finance dovetailed together in accordance with various detailed legal undertakings.

The impact of this deal was significant for every stakeholder involved, from the incumbent directors who were parting ways with their ‘baby’ to start a new phase of their lives, through to the new management team looking to be rewarded for their commitment to the business’s future success.

Our involvement in this deal reiterated to our national introducer and client network the very essence of the

The deal had been agreed at over £1m and of the £400,000 funded through asset finance, Davenham helped to raise £300,000.

However, we took the lead in project managing the entire amount – showcasing our attention to detail, structuring abilities and customer service capabilities.

Davenham Asset Finance ethic: a team with a personal, partnership approach, using our specialist skills and experience of all types of corporate transactions and their various constituent parts, including advisers, process and varying agendas making Davenham a perfect funding partner for such transactions.

Furthermore, the transaction was also an opportunity to showcase yet another way in which the Davenham team and asset finance can be used by the UK’s owner-managed SME businesses as part of an exit strategy for small businesses.

Most importantly, and for the purpose of this article, we proved yet again that despite being a small funder, we can deal with complicated transactions via the depth and experience of our multi-faceted team – which in this case provided the finance in a speedy turnaround and overall smooth process; small but perfectly formed!

NACFB Magazine | 31

CASE STUDIES

CASE STUDIES

Is there anything asset finance can’t be used for?

At Davenham, we know the trials and tribulations that business owners go through in order to make their company successful, and while this empathetic approach has played a core part across most of the proposals we have financed over the past five years, for a recent deal in particular, our reputation in corporate transactions really was the overriding factor that won us the work, and more importantly, got the finance raised for the client.

Paul Burke Managing director Davenham Asset Finance

I

t’s a well-known fact that traditional finance arms are still putting up tough barriers when it comes to lending money, which has paved the way for alternative finance providers such as ourselves.

In July 2018, the FLA revealed that the market was worth £32bn.

We recently supported an SME to raise some capital for a truly alternative purpose: a management buy in.

For this deal, our South East-based sales director Paul Lovelock was approached by one of his business contacts, a local asset finance broker, whose client required £400,000 via asset finance as part of an overall million-pound-plus management buy in deal that he was confident we were going to be able to assist with.

The original directors of the business, who set up the company over 40

30 | NACFB Magazine

years ago – providing services such as prototype development and batch production of components for bluechip clients in the aerospace sector and the Ministry of Defence – were looking to retire, having built up the business to a multi-million-pound turnover during this time. A new management team had recognised the massive potential to grow the business further and wanted to purchase the firm. The deal had been agreed at over £1m and of the £400,000 funded through asset finance, Davenham helped to raise £300,000. However, we took the lead in project managing the entire amount – showcasing our attention to detail, structuring abilities and customer service capabilities.

There were a number of challenges that came up as part of this complicated asset finance transaction: First and foremost there were over 80 assets made up of different types of engineering machinery that needed to be individually documented. Furthermore, we had to determine the value of each of these 80 assets bearing in mind

‘value’ in all its guises. To help the Davenham credit team consider and assess these risks, we appointed Tallons Associates (an experienced Manchester-based firm of specialist asset valuers) to undertake a detailed valuation which included visiting the premises, inspection and verification etc.

Ensuring we obtained clear title to the assets concerned was imperative, but caused major challenges due to the age of certain assets. A further challenge was the overall sensitivity element of the deal – staff not being aware of the impending management change (understandably until the deal had been approved) meant we could not simply call the finance team for invoices, for example, to source the original purchase paperwork or legal asset ownership documentation.

Davenham managed this sensitivity by ensuring that our teams were fully aware of the project intricacies, and only dealing with the client’s senior management when it came to requesting information.

As there were only a few other advisers, we took a lead role in the responsibility of coordinating and completing the deal with the other funders (such as the bank), including detailed negotiations to manage creditor priorities, debentures etc. In dealing with the lawyers, we worked on drafting and negotiating certain elements of the SPA to include the required warranties, thus focusing on minimising title risk and ensuring that the structuring, documentation and ultimately the provision of the finance dovetailed together in accordance with various detailed legal undertakings.

The impact of this deal was significant for every stakeholder involved, from the incumbent directors who were parting ways with their ‘baby’ to start a new phase of their lives, through to the new management team looking to be rewarded for their commitment to the business’s future success.

Our involvement in this deal reiterated to our national introducer and client network the very essence of the

The deal had been agreed at over £1m and of the £400,000 funded through asset finance, Davenham helped to raise £300,000.

However, we took the lead in project managing the entire amount – showcasing our attention to detail, structuring abilities and customer service capabilities.

Davenham Asset Finance ethic: a team with a personal, partnership approach, using our specialist skills and experience of all types of corporate transactions and their various constituent parts, including advisers, process and varying agendas making Davenham a perfect funding partner for such transactions.

Furthermore, the transaction was also an opportunity to showcase yet another way in which the Davenham team and asset finance can be used by the UK’s owner-managed SME businesses as part of an exit strategy for small businesses.

Most importantly, and for the purpose of this article, we proved yet again that despite being a small funder, we can deal with complicated transactions via the depth and experience of our multi-faceted team – which in this case provided the finance in a speedy turnaround and overall smooth process; small but perfectly formed!

NACFB Magazine | 31

CASE STUDIES

Property portfolio remortgage in under two months Stef Boyden Commercial lending release officer N&P Commercial

A

t N&P Commercial, we pride ourselves on delivering exceptional customer service to ensure our customer journey provides a valued relationship for the entirety of the mortgage term and beyond. This level of customer service is reflected by the four Business Moneyfacts Awards won by N&P Commercial for ‘Best Service from a Commercial Mortgage Provider’ for the years 2015-18. The case study below shows how N&P Commercial was selected by a customer to remortgage their property portfolio.

The portfolio contained all buy-tolet properties and encompassed a mixture of 13 flats and houses. At the time of enquiry, the properties were held in personal names and the customer stated that they wanted to transfer the portfolio into their limited company name.

When the customer’s broker contacted us about remortgaging their portfolio, they stated they needed the process to complete in two months, otherwise they would incur additional costs with their existing lender. As N&P Commercial sits in an entirely open-plan office, when enquiries of an urgent nature are received, there is the opportunity to liaise with the underwriters at the outset so the lending manager can check

32 | NACFB Magazine

their stance on the matter before we waste any of the customer’s time, for example, requesting further information and arranging meetings.

ensure the offer letter was quickly produced to enable the society’s solicitors to be instructed and the legal work could commence.

In order to achieve this tight deadline, the lending manager met with the customer the day after the enquiry was received. The initial meeting that we hold with our customer is an opportunity to explore their business background, request any further/ outstanding information required for the enquiry to progress and talk through their requirements to ensure we fully understand their needs.

Within 48 hours of the customer meeting, the lending manager had compiled and issued their credit report to the underwriting team.

Once the offer letter was approved, the sales support officer liaised with the administration assistant to ensure it was quickly issued to the customer and a completions officer was assigned as a new point of contact to liaise with the customer.

The completions officer then worked very closely with one of our panel solicitor firms to ensure that all the legal enquiries were sufficiently satisfied within good time to achieve the anticipated completion date. N&P Commercial has a small panel of solicitor firms which we work with on every single case, the advantage of this is that we have very close working relationships with them.

To ensure continuity on cases of repeat business, we allocate the same solicitor firm to act for the society that worked on previous loans for the same customer. This means that our solicitors are working with the customer’s solicitors that they have already worked with and have, therefore, established a working relationship with them which helps to smooth out and expedite the process.

N&P Commercial was able to proceed with the enquiry, as even though the portfolio contained a range of different types of property, all of them were within our lending criteria. The combined amount required for this particular mortgage was circa £3m. N&P Commercial can lend up to £5m on buy-to-let portfolios meaning we were able to assist the customer with their requirements for this mortgage. We also have plans to increase this £5m allowance in the near future. Another advantage of N&P Commercial is that we were able to offer a 10-year committed mortgage term to the customer with a bespoke fixed rate.

Once the underwriting team approved the credit report, the lending manager liaised with the sales support officer (also within the same office) to

As a result of meeting the required deadline and giving a fantastic customer journey, the customer has since enquired about further buy-tolet mortgages with N&P Commercial.

The broker has since contacted the society to discuss sending more buy-to-let portfolio enquiries.

from

Alternative Bridging Let’s talk...

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

CASE STUDIES

Property portfolio remortgage in under two months Stef Boyden Commercial lending release officer N&P Commercial

A

t N&P Commercial, we pride ourselves on delivering exceptional customer service to ensure our customer journey provides a valued relationship for the entirety of the mortgage term and beyond. This level of customer service is reflected by the four Business Moneyfacts Awards won by N&P Commercial for ‘Best Service from a Commercial Mortgage Provider’ for the years 2015-18. The case study below shows how N&P Commercial was selected by a customer to remortgage their property portfolio.

The portfolio contained all buy-tolet properties and encompassed a mixture of 13 flats and houses. At the time of enquiry, the properties were held in personal names and the customer stated that they wanted to transfer the portfolio into their limited company name.

When the customer’s broker contacted us about remortgaging their portfolio, they stated they needed the process to complete in two months, otherwise they would incur additional costs with their existing lender. As N&P Commercial sits in an entirely open-plan office, when enquiries of an urgent nature are received, there is the opportunity to liaise with the underwriters at the outset so the lending manager can check

32 | NACFB Magazine

their stance on the matter before we waste any of the customer’s time, for example, requesting further information and arranging meetings.

ensure the offer letter was quickly produced to enable the society’s solicitors to be instructed and the legal work could commence.

In order to achieve this tight deadline, the lending manager met with the customer the day after the enquiry was received. The initial meeting that we hold with our customer is an opportunity to explore their business background, request any further/ outstanding information required for the enquiry to progress and talk through their requirements to ensure we fully understand their needs.

Within 48 hours of the customer meeting, the lending manager had compiled and issued their credit report to the underwriting team.

Once the offer letter was approved, the sales support officer liaised with the administration assistant to ensure it was quickly issued to the customer and a completions officer was assigned as a new point of contact to liaise with the customer.

The completions officer then worked very closely with one of our panel solicitor firms to ensure that all the legal enquiries were sufficiently satisfied within good time to achieve the anticipated completion date. N&P Commercial has a small panel of solicitor firms which we work with on every single case, the advantage of this is that we have very close working relationships with them.

To ensure continuity on cases of repeat business, we allocate the same solicitor firm to act for the society that worked on previous loans for the same customer. This means that our solicitors are working with the customer’s solicitors that they have already worked with and have, therefore, established a working relationship with them which helps to smooth out and expedite the process.

N&P Commercial was able to proceed with the enquiry, as even though the portfolio contained a range of different types of property, all of them were within our lending criteria. The combined amount required for this particular mortgage was circa £3m. N&P Commercial can lend up to £5m on buy-to-let portfolios meaning we were able to assist the customer with their requirements for this mortgage. We also have plans to increase this £5m allowance in the near future. Another advantage of N&P Commercial is that we were able to offer a 10-year committed mortgage term to the customer with a bespoke fixed rate.

Once the underwriting team approved the credit report, the lending manager liaised with the sales support officer (also within the same office) to

As a result of meeting the required deadline and giving a fantastic customer journey, the customer has since enquired about further buy-tolet mortgages with N&P Commercial.

The broker has since contacted the society to discuss sending more buy-to-let portfolio enquiries.

from

Alternative Bridging Let’s talk...

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

Patron | profile

Commercial mortgages, reinvented Rob Lankey Managing director Amicus Commercial Mortgages

It’s a bold statement: reinventing commercial mortgages. But that’s what we intended to do when we launched our business at the beginning of this year.

34 | NACFB Magazine

W

e determined only to set up another commercial mortgage lender if we could be sure of offering something different – a new way of doing business and a better way for brokers to get what they need from their lender.

And so, Amicus Commercial Mortgages is different and born out of what brokers told us they needed.

Frankly, if they hadn’t challenged us to come to the market with a fresh proposition, then we wouldn’t exist.

What brokers told us is that they really need a pragmatic lender, able to make quick decisions and with a focus on accessible experts and service – so that’s what we built.

It’s not just products or systems that create a great lender (although they obviously help), it’s the colleagues I work with, and so I am proud to lead what I, and others, consider to be the foremost commercial mortgages team in the industry. Between them, they have well over 200 years of commercial mortgage experience. It

makes for a compelling proposition when you then add great products and a truly intuitive system.

We’ve brought to market a solutions-based offering that uses our experience to find the right lending solution for the customers’ circumstances. We have a number of tools at our disposal to make this possible, including higher LTV and interest-only options, plus a healthy dose of common sense to our underwriting.

It’s the underwriting where our differences really shine through.

Our brokers get access to the experts they need and we have empowered those experts to make decisions.

When a broker is dealing directly with a mandated underwriter, it makes the whole process far more efficient. It also gives our team the opportunity to discuss the case in detail and when that application doesn’t fall within our appetite, suggest changes or a structure that may work for the customer.

A key challenge for any broker is the provision of relevant information; in particular brokers tell us some lenders change the list of requirements too often. By empowering our brokerfacing staff with mandates, we’ve alleviated this issue. This means that the broker has certainty that they are not going to have to repeatedly approach their client for more and more information. This direct access also means that we’re able to work proactively with our brokers when issues inevitably arise.

This access isn’t limited to the underwriting team. When a case has been offered, our experienced completions team take over the management of the application to ensure that all parties are kept informed of the progress of an application. They take a proactive approach to this task, ensuring that everyone is aware of the progress before they have the opportunity to ask.

Even though we’ve only been trading for a short while, we have

a large file of feedback from our brokers complimenting the business on the ‘can-do’ attitude of my team, from initial contact all the way through to the completion of the mortgage and beyond.

security is a high-quality, modern, serviced office

We’ve been able to help a number of customers where they needed a lender who could listen and understand their story or where they needed a lender who could react quickly to their needs.

we allowed a second charge behind us to assist the borrower with the repayment of the previous loan they had in place

An example of our flexibility can be seen in a recent case: loan of £1.875m at 75% LTV structured over a 15-year term on a part-and-part basis, with 60% of the LTV being interest only and the remainder being capital and interest lending to a limited company with a personal guarantee for £500,000 taken from the director and principal shareholder (equivalent to approximately two years’ rent)

12 separate tenants in place on licences varying from 12 to 18 months

the director of the borrowing company has many years of experience in the commercial sector and is a chartered surveyor we timed completion of our advance so that the customer was not charged any early repayment charges from his previous lender.

So, I’m confident we have brought a new way of doing business to the market. We operate with a real appetite to lend, work hard to nurture partnerships that benefit both borrowers and brokers, and do it all with a human touch.

NACFB Magazine | 35

Patron | profile

Commercial mortgages, reinvented Rob Lankey Managing director Amicus Commercial Mortgages

It’s a bold statement: reinventing commercial mortgages. But that’s what we intended to do when we launched our business at the beginning of this year.

34 | NACFB Magazine

W

e determined only to set up another commercial mortgage lender if we could be sure of offering something different – a new way of doing business and a better way for brokers to get what they need from their lender.

And so, Amicus Commercial Mortgages is different and born out of what brokers told us they needed.

Frankly, if they hadn’t challenged us to come to the market with a fresh proposition, then we wouldn’t exist.

What brokers told us is that they really need a pragmatic lender, able to make quick decisions and with a focus on accessible experts and service – so that’s what we built.

It’s not just products or systems that create a great lender (although they obviously help), it’s the colleagues I work with, and so I am proud to lead what I, and others, consider to be the foremost commercial mortgages team in the industry. Between them, they have well over 200 years of commercial mortgage experience. It

makes for a compelling proposition when you then add great products and a truly intuitive system.

We’ve brought to market a solutions-based offering that uses our experience to find the right lending solution for the customers’ circumstances. We have a number of tools at our disposal to make this possible, including higher LTV and interest-only options, plus a healthy dose of common sense to our underwriting.

It’s the underwriting where our differences really shine through.

Our brokers get access to the experts they need and we have empowered those experts to make decisions.

When a broker is dealing directly with a mandated underwriter, it makes the whole process far more efficient. It also gives our team the opportunity to discuss the case in detail and when that application doesn’t fall within our appetite, suggest changes or a structure that may work for the customer.

A key challenge for any broker is the provision of relevant information; in particular brokers tell us some lenders change the list of requirements too often. By empowering our brokerfacing staff with mandates, we’ve alleviated this issue. This means that the broker has certainty that they are not going to have to repeatedly approach their client for more and more information. This direct access also means that we’re able to work proactively with our brokers when issues inevitably arise.

This access isn’t limited to the underwriting team. When a case has been offered, our experienced completions team take over the management of the application to ensure that all parties are kept informed of the progress of an application. They take a proactive approach to this task, ensuring that everyone is aware of the progress before they have the opportunity to ask.

Even though we’ve only been trading for a short while, we have

a large file of feedback from our brokers complimenting the business on the ‘can-do’ attitude of my team, from initial contact all the way through to the completion of the mortgage and beyond.

security is a high-quality, modern, serviced office

We’ve been able to help a number of customers where they needed a lender who could listen and understand their story or where they needed a lender who could react quickly to their needs.

we allowed a second charge behind us to assist the borrower with the repayment of the previous loan they had in place

An example of our flexibility can be seen in a recent case: loan of £1.875m at 75% LTV structured over a 15-year term on a part-and-part basis, with 60% of the LTV being interest only and the remainder being capital and interest lending to a limited company with a personal guarantee for £500,000 taken from the director and principal shareholder (equivalent to approximately two years’ rent)

12 separate tenants in place on licences varying from 12 to 18 months

the director of the borrowing company has many years of experience in the commercial sector and is a chartered surveyor we timed completion of our advance so that the customer was not charged any early repayment charges from his previous lender.

So, I’m confident we have brought a new way of doing business to the market. We operate with a real appetite to lend, work hard to nurture partnerships that benefit both borrowers and brokers, and do it all with a human touch.

NACFB Magazine | 35

Ask | the expert Your questions answered by the most knowledgeable industry insiders

Simon Goldie Head of Asset Finance - Finance & Leasing Association Helping SMEs find the right finance at the right time

F

inding the right finance at the right time is a perennial challenge for SMEs. Too often, business owners turn to bank loans or the company credit card, not because they are the most suitable or competitivelypriced options, but because that’s what they’ve always used.

At the recent Labour and Conservative conferences, the Finance & Leasing Association (FLA) and the Association of Chartered Certified Accountants (ACCA) brought together lenders, MPs and representatives from the local enterprise agencies to discuss ways of helping SMEs search the whole spectrum of financial options to find the product that best suits their individual circumstances.

Firms that find the most efficient sources of finance have a competitive advantage.

This is especially true in industries which are highly seasonal, or where equipment becomes obsolete very quickly. Getting a traditional loan to buy equipment that will only be used for part of the year, or needs to be replaced long before the loan is paid off, doesn’t make financial sense when compared with options like asset finance (leasing and hire purchase) supplied by specialist lenders who understand that

specific pieces of equipment will be used in specific ways, and will schedule payments to suit that pattern.

raised, via dedicated members of staff to help with applications, business plans and broader mentoring.

If more firms understood their financing needs better, the results would be evident in the UK’s productivity rates.

We think the British Business Bank (BBB) would be the ideal host for such a firststop shop. Its impartiality and funding expertise are already well established, and the best features of the BBB’s existing Business Finance Guide and Finance Your Growth site could form the basis of the new resource that would offer financial advice to SMEs at all ages and growth stages.

With Brexit fast approaching, business owners know there will be opportunities to exploit and challenges to overcome, so the imperative to close the knowledge gap is more pressing than ever.

The range and number of contributors at our fringe events demonstrated that the current information framework is very broad – but what it urgently requires is a coordinating mechanism to bring these disparate information sources together in a ‘first-stop shop’ for SMEs. This facility would be web-based, and include information on the full range of finance options and channels, while providing users with an intuitive path to follow to help decide which options best suit their circumstances. It would include information on lenders, and offer a referral to nearby Local Enterprise Partnerships or Growth Hubs. To make this work well, the standard of advice at the hubs needs to be

Concerns about the regulatory burden on SMEs was another major theme at our party conference events. For example, participants noted the difficulty for small businesses in complying with the complex anti-money laundering rules. At the same time, the out-of-date and ill-fitting Consumer Credit Act (CCA) constrains the provision of finance to the smallest businesses. Overall, there was a feeling that the regulatory regime does not support lending to small businesses as well as it could and with UK productivity remaining low – and Brexit just around the corner – the government and regulators should take action now to help lenders help the UK’s small businesses grow.

We’re redefining standard

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

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

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

Prime Bridging Standard Bridging Light Development Development Commercial

Are you ready to rethink what standard means?

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

36 | NACFB Magazine

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

Ask | the expert Your questions answered by the most knowledgeable industry insiders

Simon Goldie Head of Asset Finance - Finance & Leasing Association Helping SMEs find the right finance at the right time

F

inding the right finance at the right time is a perennial challenge for SMEs. Too often, business owners turn to bank loans or the company credit card, not because they are the most suitable or competitivelypriced options, but because that’s what they’ve always used.

At the recent Labour and Conservative conferences, the Finance & Leasing Association (FLA) and the Association of Chartered Certified Accountants (ACCA) brought together lenders, MPs and representatives from the local enterprise agencies to discuss ways of helping SMEs search the whole spectrum of financial options to find the product that best suits their individual circumstances.

Firms that find the most efficient sources of finance have a competitive advantage.

This is especially true in industries which are highly seasonal, or where equipment becomes obsolete very quickly. Getting a traditional loan to buy equipment that will only be used for part of the year, or needs to be replaced long before the loan is paid off, doesn’t make financial sense when compared with options like asset finance (leasing and hire purchase) supplied by specialist lenders who understand that

specific pieces of equipment will be used in specific ways, and will schedule payments to suit that pattern.

raised, via dedicated members of staff to help with applications, business plans and broader mentoring.

If more firms understood their financing needs better, the results would be evident in the UK’s productivity rates.

We think the British Business Bank (BBB) would be the ideal host for such a firststop shop. Its impartiality and funding expertise are already well established, and the best features of the BBB’s existing Business Finance Guide and Finance Your Growth site could form the basis of the new resource that would offer financial advice to SMEs at all ages and growth stages.

With Brexit fast approaching, business owners know there will be opportunities to exploit and challenges to overcome, so the imperative to close the knowledge gap is more pressing than ever.

The range and number of contributors at our fringe events demonstrated that the current information framework is very broad – but what it urgently requires is a coordinating mechanism to bring these disparate information sources together in a ‘first-stop shop’ for SMEs. This facility would be web-based, and include information on the full range of finance options and channels, while providing users with an intuitive path to follow to help decide which options best suit their circumstances. It would include information on lenders, and offer a referral to nearby Local Enterprise Partnerships or Growth Hubs. To make this work well, the standard of advice at the hubs needs to be

Concerns about the regulatory burden on SMEs was another major theme at our party conference events. For example, participants noted the difficulty for small businesses in complying with the complex anti-money laundering rules. At the same time, the out-of-date and ill-fitting Consumer Credit Act (CCA) constrains the provision of finance to the smallest businesses. Overall, there was a feeling that the regulatory regime does not support lending to small businesses as well as it could and with UK productivity remaining low – and Brexit just around the corner – the government and regulators should take action now to help lenders help the UK’s small businesses grow.

We’re redefining standard

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

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

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

Prime Bridging Standard Bridging Light Development Development Commercial

Are you ready to rethink what standard means?

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

36 | NACFB Magazine

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

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

Why bridging sits well with HMOs Darrell Walker Head of Sales InterBay Commercial

T

he plethora of regulation changes that have come in the direction of landlords with HMO properties this year has presented them with a potentially long and expensive to do list. The new HMO rules came into effect in October, meaning that any landlord whose HMO properties do not meet the required specifications could face serious penalties.

The minimum room size changes for bedrooms in licensed HMOs would likely have resulted in conversions, constructions or renovations for many landlords. Failure to comply could result in a fine of up to £30k, a rent repayment order, a banning order and even a criminal record.

The HMO rules follow the EPC regulations that came out in April and required landlords whose properties had an ‘F’ or ‘G’ energy efficiency rating to make changes to their properties to bring them up to at least an “E” rating. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years. This time, landlords were required to meet the new standards within a shorter timeframe – often as little as three months – or face a fine of up to £150,000 per asset.

Those with an existing HMO which did not meet specification would have required a short, sharp injection of cash to put things right. Added to this is the fact that the small

38 | NACFB Magazine

number of lenders that do lend on HMOs would expect landlords to be compliant ahead of securing a loan.

This is where a bridging loan could prove to be the perfect solution.

The speed and simplicity of a bridging loan application makes bridging finance a viable option when time is of the essence, and it can be secured in as little as seven days, depending on the circumstances.

The flexibility of a bridging loan is the other attraction. Few bridging loans will come with early repayment penalties, and there is no fixed term time - once the job is complete, the loan can be repaid immediately. There is also the option to ‘roll-up’ the interest to pay at the end of the term of finance.

The big benefit of HMO properties is the potential for higher rents.

A higher yield not only boosts returns, it means an investor can secure more finance and gear more heavily to free up capital for investment elsewhere.

So, whilst the raft of regulatory changes continue, and landlords tear their hair out trying to meet changing standards, funding options are becoming more flexible, boosting the ability of landlords – and their brokers – to react much faster to market change.

NACFB Magazine | 39

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

Why bridging sits well with HMOs Darrell Walker Head of Sales InterBay Commercial

T

he plethora of regulation changes that have come in the direction of landlords with HMO properties this year has presented them with a potentially long and expensive to do list. The new HMO rules came into effect in October, meaning that any landlord whose HMO properties do not meet the required specifications could face serious penalties.

The minimum room size changes for bedrooms in licensed HMOs would likely have resulted in conversions, constructions or renovations for many landlords. Failure to comply could result in a fine of up to £30k, a rent repayment order, a banning order and even a criminal record.

The HMO rules follow the EPC regulations that came out in April and required landlords whose properties had an ‘F’ or ‘G’ energy efficiency rating to make changes to their properties to bring them up to at least an “E” rating. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years. This time, landlords were required to meet the new standards within a shorter timeframe – often as little as three months – or face a fine of up to £150,000 per asset.

Those with an existing HMO which did not meet specification would have required a short, sharp injection of cash to put things right. Added to this is the fact that the small

38 | NACFB Magazine

number of lenders that do lend on HMOs would expect landlords to be compliant ahead of securing a loan.

This is where a bridging loan could prove to be the perfect solution.

The speed and simplicity of a bridging loan application makes bridging finance a viable option when time is of the essence, and it can be secured in as little as seven days, depending on the circumstances.

The flexibility of a bridging loan is the other attraction. Few bridging loans will come with early repayment penalties, and there is no fixed term time - once the job is complete, the loan can be repaid immediately. There is also the option to ‘roll-up’ the interest to pay at the end of the term of finance.

The big benefit of HMO properties is the potential for higher rents.

A higher yield not only boosts returns, it means an investor can secure more finance and gear more heavily to free up capital for investment elsewhere.

So, whilst the raft of regulatory changes continue, and landlords tear their hair out trying to meet changing standards, funding options are becoming more flexible, boosting the ability of landlords – and their brokers – to react much faster to market change.

NACFB Magazine | 39

SPECIAL FEATURES

Export and trading in a postBrexit environment T Kash Ahmad MD for specialist products Bibby Financial Services

Brexit could fundamentally change how businesses trade goods with the EU. If the government is unsuccessful in negotiating a deal with the bloc, companies that fail to prepare could face difficulty sourcing the goods they need to make their products.

Equally, exporters could see revenues dip if a more complicated customs process prevents foreign companies from purchasing UK goods.

he EU is the UK’s largest trading partner, accounting for £274bn worth of UK exports (44% of all exports) and £341 billion of UK imports (53% of all imports) in 2017. Despite this reliance, a recent study by the British Chamber of Commerce and Bibby Financial Services showed that 62% of UK firms have not yet undertaken a risk assessment of the impact of Brexit on their businesses.

Regulations are also likely to change come 29th March 2019, and researching how these will affect supply chains will help businesses become accustomed to new rules. Companies that trade overseas should also ensure internal systems are up to standard. Investing in more efficient systems and processes now can help to offset the impact of any delays that may result post-Brexit.

Another option businesses could consider is registering as an Authorised Economic Operator (AEO), which gives quicker access to some simplified customs procedures when trading with EU markets.

In some cases, it can also give businesses the right to ‘fast track’ their shipments through some customs procedures.

Businesses that are able to register are less likely to experience customs delays if the process becomes more complicated once the UK leaves the EU.

An Amicus owner-occupier mortgage could be the perfect solution for business owners who want to separate their long-term finance from day-to-day banking. We understand that when looking for a mortgage for business premises, a deep understanding of individual needs and quick, pragmatic decisions can make all the difference.

We can offer:

As Brexit day looms with no withdrawal agreement yet in place, businesses that work with suppliers and customers based in the single market should look to strengthen their relationships with overseas partners and put contingency plans in place.

One option that could help businesses protect themselves against a potential fall in profit margins post-Brexit is to negotiate discounts with suppliers. For example, companies may secure a discount by offering to pay suppliers for goods in advance of them being shipped. This can be achieved by accessing funding to pay suppliers earlier in the trade cycle, alleviating cash flow pressure and enhancing bargaining power. These potential discounts could partly offset the cost of any tariffs that might be imposed after the UK leaves the EU.

Owner-occupiers, sorted

Borrowing from £75k to £2m+ Up to 80% LTV on mortgages up to £750,000 Up to 75% LTV on an interest-only basis Serviceability based on just 2 years’ accounts Typically less than 15 days from enquiry to offer

It is also crucial that SMEs don’t ignore the impact Brexit could have on the workforce.

According the official figures by the Office for National Statistics (ONS), there were 2.28 million EU nationals working in the UK in June 2018. The heavy reliance on EU workers means that businesses must create contingency plans to address those working in the UK. A strong workforce will aid growth and productivity of any business, and employers could mitigate risks by staying up to date with new immigration controls. Engaging with employees about the future, supporting them with any new rules that are implemented and informing them about their rights can help to reassure workers and encourage them to stay.

Ultimately, businesses are only as successful as their supply chain, and working to strengthen supplier relationships while also securing discounts is a good way to prepare for any adversity that may result from Brexit. It is crucial that businesses take a pragmatic approach to Brexit, addressing key issues such as regulations, workforce and supplies in advance, rather than waiting for the government to secure a deal that may never come.

Telephone: 01733 797 403 commercial mortgages

Discover more at amicuscommercialmortgages.co.uk

For professional intermediary use only. Loans offered subject to underwriting criteria.

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

40 | NACFB Magazine

SPECIAL FEATURES

Export and trading in a postBrexit environment T Kash Ahmad MD for specialist products Bibby Financial Services

Brexit could fundamentally change how businesses trade goods with the EU. If the government is unsuccessful in negotiating a deal with the bloc, companies that fail to prepare could face difficulty sourcing the goods they need to make their products.

Equally, exporters could see revenues dip if a more complicated customs process prevents foreign companies from purchasing UK goods.

he EU is the UK’s largest trading partner, accounting for £274bn worth of UK exports (44% of all exports) and £341 billion of UK imports (53% of all imports) in 2017. Despite this reliance, a recent study by the British Chamber of Commerce and Bibby Financial Services showed that 62% of UK firms have not yet undertaken a risk assessment of the impact of Brexit on their businesses.

Regulations are also likely to change come 29th March 2019, and researching how these will affect supply chains will help businesses become accustomed to new rules. Companies that trade overseas should also ensure internal systems are up to standard. Investing in more efficient systems and processes now can help to offset the impact of any delays that may result post-Brexit.

Another option businesses could consider is registering as an Authorised Economic Operator (AEO), which gives quicker access to some simplified customs procedures when trading with EU markets.

In some cases, it can also give businesses the right to ‘fast track’ their shipments through some customs procedures.

Businesses that are able to register are less likely to experience customs delays if the process becomes more complicated once the UK leaves the EU.

An Amicus owner-occupier mortgage could be the perfect solution for business owners who want to separate their long-term finance from day-to-day banking. We understand that when looking for a mortgage for business premises, a deep understanding of individual needs and quick, pragmatic decisions can make all the difference.

We can offer:

As Brexit day looms with no withdrawal agreement yet in place, businesses that work with suppliers and customers based in the single market should look to strengthen their relationships with overseas partners and put contingency plans in place.

One option that could help businesses protect themselves against a potential fall in profit margins post-Brexit is to negotiate discounts with suppliers. For example, companies may secure a discount by offering to pay suppliers for goods in advance of them being shipped. This can be achieved by accessing funding to pay suppliers earlier in the trade cycle, alleviating cash flow pressure and enhancing bargaining power. These potential discounts could partly offset the cost of any tariffs that might be imposed after the UK leaves the EU.

Owner-occupiers, sorted

Borrowing from £75k to £2m+ Up to 80% LTV on mortgages up to £750,000 Up to 75% LTV on an interest-only basis Serviceability based on just 2 years’ accounts Typically less than 15 days from enquiry to offer

It is also crucial that SMEs don’t ignore the impact Brexit could have on the workforce.

According the official figures by the Office for National Statistics (ONS), there were 2.28 million EU nationals working in the UK in June 2018. The heavy reliance on EU workers means that businesses must create contingency plans to address those working in the UK. A strong workforce will aid growth and productivity of any business, and employers could mitigate risks by staying up to date with new immigration controls. Engaging with employees about the future, supporting them with any new rules that are implemented and informing them about their rights can help to reassure workers and encourage them to stay.

Ultimately, businesses are only as successful as their supply chain, and working to strengthen supplier relationships while also securing discounts is a good way to prepare for any adversity that may result from Brexit. It is crucial that businesses take a pragmatic approach to Brexit, addressing key issues such as regulations, workforce and supplies in advance, rather than waiting for the government to secure a deal that may never come.

Telephone: 01733 797 403 commercial mortgages

Discover more at amicuscommercialmortgages.co.uk

For professional intermediary use only. Loans offered subject to underwriting criteria.

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

40 | NACFB Magazine

Industry | guides

Dual Growth Funding Part flexible funding, part term loan Gary Trott CEO Credit4

We launched Credit4 five years ago with a clear objective: to provide innovative, transparently priced, relationship-led funding for growing SMEs. With the growth of UK SMEs constrained by a lack of access to appropriate finance, it’s crucial for our overall future economic growth that businesses have access not just to funding, but to the right funding that will allow them to take advantage of opportunities to grow.

NACFB Magazine | 43

Industry | guides

Dual Growth Funding Part flexible funding, part term loan Gary Trott CEO Credit4

We launched Credit4 five years ago with a clear objective: to provide innovative, transparently priced, relationship-led funding for growing SMEs. With the growth of UK SMEs constrained by a lack of access to appropriate finance, it’s crucial for our overall future economic growth that businesses have access not just to funding, but to the right funding that will allow them to take advantage of opportunities to grow.

NACFB Magazine | 43

GUIDES

A different way of lending?

Lending is not rocket science, but there are many considerations and we simply take time to understand each business, the people behind it and its growth potential without using algorithms. Our original ‘Flexible Funding’ product is a short-term facility for up to 12 months and allows businesses to redraw and repay as often as required during that period, servicing interest only during the term. This gives maximum flexibility to businesses in their growth phase.

Introducing Dual Growth Funding We pride ourselves on our innovative products and supporting our customers through various stages of growth. In 2015, we launched a complementary product, Dual Growth Funding – part Flexible Funding, part term loan. This allows clients to have more control of their funding – maximum flexibility with our Flexible Funding – but also access to more traditional funding to sustain progress. It means that businesses will be able to apply to Credit4 for both forms of funding, rather than look elsewhere for different solutions, which could possibly mean multiple applications. Our products are also designed to be versatile enough to be relevant to earlystage or more mature businesses.

a number of our trusted introducers and gauged their reaction to this unique product. We then put the product into a pilot phase to test its applicability to the market.

One key introducer, who worked with us on the Dual Growth Funding pilot, said: “We’re delighted to see this innovative new product being introduced by Credit4 – they’ve really understood the needs of the market. It’s great to see lenders working to encourage growing SMEs and the flexibility offered should make this a very popular funding solution for UK businesses.”

We’re pleased to say that they were right.

To find out more about how our products might help your client, call 0203 637 0570, email brokers@credit4.co.uk or visit our website www.credit4.co.uk.

A key factor for Credit4 is that we look to attract UK businesses that are growing and where there is an opportunity to unlock their potential through providing the appropriate forms of finance

A key factor for Credit4 is that we look to attract UK businesses that are growing and where there is an opportunity to unlock their potential through providing the appropriate forms of finance. Businesses will obviously have to provide all the relevant financial information but, once approved, successful applicants will have access to term loan funding and a Flexible Facility.

Our aim has been to create one product in place of the two that might traditionally be required.

We fundamentally value transparency in dealing with clients and in pricing, we therefore put calculators on our website which show what the funding will cost, not what it could cost. Our pricing is fixed so pricing transparency runs through our entire process from start to finish.

Tried and tested As it’s important to understand what growing SMEs need – not what we think they need – in 2015 we spoke to

44 | NACFB Magazine

SPEED MEETS FLEXIBILITY 020 7655 3388

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

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

GUIDES

A different way of lending?

Lending is not rocket science, but there are many considerations and we simply take time to understand each business, the people behind it and its growth potential without using algorithms. Our original ‘Flexible Funding’ product is a short-term facility for up to 12 months and allows businesses to redraw and repay as often as required during that period, servicing interest only during the term. This gives maximum flexibility to businesses in their growth phase.

Introducing Dual Growth Funding We pride ourselves on our innovative products and supporting our customers through various stages of growth. In 2015, we launched a complementary product, Dual Growth Funding – part Flexible Funding, part term loan. This allows clients to have more control of their funding – maximum flexibility with our Flexible Funding – but also access to more traditional funding to sustain progress. It means that businesses will be able to apply to Credit4 for both forms of funding, rather than look elsewhere for different solutions, which could possibly mean multiple applications. Our products are also designed to be versatile enough to be relevant to earlystage or more mature businesses.

a number of our trusted introducers and gauged their reaction to this unique product. We then put the product into a pilot phase to test its applicability to the market.

One key introducer, who worked with us on the Dual Growth Funding pilot, said: “We’re delighted to see this innovative new product being introduced by Credit4 – they’ve really understood the needs of the market. It’s great to see lenders working to encourage growing SMEs and the flexibility offered should make this a very popular funding solution for UK businesses.”

We’re pleased to say that they were right.

To find out more about how our products might help your client, call 0203 637 0570, email brokers@credit4.co.uk or visit our website www.credit4.co.uk.

A key factor for Credit4 is that we look to attract UK businesses that are growing and where there is an opportunity to unlock their potential through providing the appropriate forms of finance

A key factor for Credit4 is that we look to attract UK businesses that are growing and where there is an opportunity to unlock their potential through providing the appropriate forms of finance. Businesses will obviously have to provide all the relevant financial information but, once approved, successful applicants will have access to term loan funding and a Flexible Facility.

Our aim has been to create one product in place of the two that might traditionally be required.

We fundamentally value transparency in dealing with clients and in pricing, we therefore put calculators on our website which show what the funding will cost, not what it could cost. Our pricing is fixed so pricing transparency runs through our entire process from start to finish.

Tried and tested As it’s important to understand what growing SMEs need – not what we think they need – in 2015 we spoke to

44 | NACFB Magazine

SPEED MEETS FLEXIBILITY 020 7655 3388

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

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

GUIDES

GUIDES

Rethinking commercial securities Richard Tugwell Group intermediary relationship director Together

When we think of commercial properties, we tend to think of buildings in their most rudimentary sense: ones with walls, doors and windows. Things like offices, shops, and industrial units.

B

ut, of course, in reality commercial properties are far more diverse. And, as mainstream funding becomes harder to find, commercial finance brokers have a role to play in educating borrowers about the options available with those lenders who will consider more unusual properties as security.

It’s common to encounter resistance to lending on these more unusual properties – like golf courses, amusements parks, and forecourts – among mainstream lenders.

However, specialist lenders like Together can look beyond this kind of ‘tick box’ approach. We take a common-sense view on lending in more complex cases, and this means we can often lend when others can’t.

Following changes to tax relief and regulation in the residential sector, an increasing number of property investors have been turning their attention to commercial, semicommercial and other mixed-use properties. This changing landscape could offer newopportunities for brokers to diversify into new areas, as legislation continues to impact on the lucrativeness of being a residential landlord.

Brokers with advanced knowledge of the properties specialist lenders will consider as security can prove tremendously valuablefor all involved. Clients get the bridging loan, buy-to-let mortgage, commercial mortgage or secured

46 | NACFB Magazine

business loan they need – and brokers needn’t turn business away.

As a specialist lender, we are prepared to lend against a hugely varied range of properties.

These include semi-commercial dwellings, conversion opportunities, wholesale or manufacturingunits, restaurants, warehouses, working farms, and equestrian centres.

And we will look the most unusual securities on a case-by-case basis, as the following examples demonstrate:

Land Some lenders won’t accept land as security because they lack experience in the area, or because they prefer to lend against bricks and mortar. At Together, we’ll consider lending against land – even if it has no planning permission – if the deal makes sense.

For instance, a developer approached us for funding of £5 million to secure part of a large redevelopment site in Manchester city centre. The regeneration of the area was well-publicised, so land was in high demand, and the buyer needed to complete quickly. Despite the size and complexity of the deal, we were able to provide funds in just 21 days; the client was able to purchase the land and move forward with the development, creating additional accommodation for a buoyant local rental market.

HMOs Following recent change to HMO licensing rules, these specialist landlords may find themselves excluded by some lenders’ restrictive criteria. We’re happy to help landlords to expand their buy-to-let portfolios by using Houses in Multiple Occupation (HMOs) they already own as additional security when making their next purchase,.

We provided a 12-month bridging loan to two business partners, secured against an HMO they owned, after a broker approached us with the complicated case.

The partners requested a loan of almost £135,000 to complete the auction purchase of another property, in Birmingham. We were happy to provide the necessary funds, well within the 28-day timeframe required to complete an auction purchase.

Petrol stations Mainstream lenders generally view filling stations as specialistassets, and only a select few lenders have an appetite for financing these properties.

Knowing who to approach and what they offer can be critical.

In one case, we lent over £4.3m to a business investing in four petrol stations, with a quick turnaround required. The client had been let down by their previous lender who, because of the complicated nature of the deal, could not release the funds in timeto complete the deal.

After carefully reviewing the case, we were able to complete the transaction in three days.

With the mainstream lenders’ criteria as restrictive as ever, for a whole variety of reasons, there are many clients and opportunities that call for a specialist approach. With this in mind, it’s easy to understand why alternative finance providers like Together are growing their loan books at impressive speed.

We’ve been providing specialist finance for more than four decades, and our pragmatic approach to underwriting is more relevant than ever. Finances and business opportunities are more complex than ever, and our way of working accounts for this new normal.

NACFB Magazine | 47

GUIDES

GUIDES

Rethinking commercial securities Richard Tugwell Group intermediary relationship director Together

When we think of commercial properties, we tend to think of buildings in their most rudimentary sense: ones with walls, doors and windows. Things like offices, shops, and industrial units.

B

ut, of course, in reality commercial properties are far more diverse. And, as mainstream funding becomes harder to find, commercial finance brokers have a role to play in educating borrowers about the options available with those lenders who will consider more unusual properties as security.

It’s common to encounter resistance to lending on these more unusual properties – like golf courses, amusements parks, and forecourts – among mainstream lenders.

However, specialist lenders like Together can look beyond this kind of ‘tick box’ approach. We take a common-sense view on lending in more complex cases, and this means we can often lend when others can’t.

Following changes to tax relief and regulation in the residential sector, an increasing number of property investors have been turning their attention to commercial, semicommercial and other mixed-use properties. This changing landscape could offer newopportunities for brokers to diversify into new areas, as legislation continues to impact on the lucrativeness of being a residential landlord.

Brokers with advanced knowledge of the properties specialist lenders will consider as security can prove tremendously valuablefor all involved. Clients get the bridging loan, buy-to-let mortgage, commercial mortgage or secured

46 | NACFB Magazine

business loan they need – and brokers needn’t turn business away.

As a specialist lender, we are prepared to lend against a hugely varied range of properties.

These include semi-commercial dwellings, conversion opportunities, wholesale or manufacturingunits, restaurants, warehouses, working farms, and equestrian centres.

And we will look the most unusual securities on a case-by-case basis, as the following examples demonstrate:

Land Some lenders won’t accept land as security because they lack experience in the area, or because they prefer to lend against bricks and mortar. At Together, we’ll consider lending against land – even if it has no planning permission – if the deal makes sense.

For instance, a developer approached us for funding of £5 million to secure part of a large redevelopment site in Manchester city centre. The regeneration of the area was well-publicised, so land was in high demand, and the buyer needed to complete quickly. Despite the size and complexity of the deal, we were able to provide funds in just 21 days; the client was able to purchase the land and move forward with the development, creating additional accommodation for a buoyant local rental market.

HMOs Following recent change to HMO licensing rules, these specialist landlords may find themselves excluded by some lenders’ restrictive criteria. We’re happy to help landlords to expand their buy-to-let portfolios by using Houses in Multiple Occupation (HMOs) they already own as additional security when making their next purchase,.

We provided a 12-month bridging loan to two business partners, secured against an HMO they owned, after a broker approached us with the complicated case.

The partners requested a loan of almost £135,000 to complete the auction purchase of another property, in Birmingham. We were happy to provide the necessary funds, well within the 28-day timeframe required to complete an auction purchase.

Petrol stations Mainstream lenders generally view filling stations as specialistassets, and only a select few lenders have an appetite for financing these properties.

Knowing who to approach and what they offer can be critical.

In one case, we lent over £4.3m to a business investing in four petrol stations, with a quick turnaround required. The client had been let down by their previous lender who, because of the complicated nature of the deal, could not release the funds in timeto complete the deal.

After carefully reviewing the case, we were able to complete the transaction in three days.

With the mainstream lenders’ criteria as restrictive as ever, for a whole variety of reasons, there are many clients and opportunities that call for a specialist approach. With this in mind, it’s easy to understand why alternative finance providers like Together are growing their loan books at impressive speed.

We’ve been providing specialist finance for more than four decades, and our pragmatic approach to underwriting is more relevant than ever. Finances and business opportunities are more complex than ever, and our way of working accounts for this new normal.

NACFB Magazine | 47

Season’s Greetings from Just Cashflow...

The Just Cashflow team would like to thank you, our broker customers, for all your support.

We are proud that with your help we have supported hundreds of UK businesses in their growth and development.

With our thanks and good wishes to you all over the Festive Season.

If you want a fast, flexible funding solution from £10k to £2m for your clients then Just call us now

0121 418 5037

Alternatively, find out more

justcashflow.com/partner

Patron Member FS668057

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB under Company number 08508165 © Just Cash Flow PLC 2018

Season’s Greetings from Just Cashflow...

The Just Cashflow team would like to thank you, our broker customers, for all your support.

We are proud that with your help we have supported hundreds of UK businesses in their growth and development.

With our thanks and good wishes to you all over the Festive Season.

If you want a fast, flexible funding solution from £10k to £2m for your clients then Just call us now

0121 418 5037

Alternatively, find out more

justcashflow.com/partner

Patron Member FS668057

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB under Company number 08508165 © Just Cash Flow PLC 2018

Opinion | & commentary Thought leadership from our Patrons and Members

Helping shape the SME lending regulatory landscape John Davies Director Just Cash Flow

T

here has been considerable debate on whether or not commercial lending is going to be regulated.

It’s an important topic that should get everyone’s attention because if the answer is ‘yes’, then brokers advising on commercial lending will fall under the regulatory regime and all this entails.

At Just Cashflow, we have always operated as if we were a regulated entity, because it is the right thing to do and, to my mind, it has always been a question of ‘when’ and not ‘if’ regulation will arrive.

I believe that day is now a lot closer following the publication of the Treasury committee’s SME finance report.

committee report. I encourage everyone to read all 62 pages, but I am happy to share my own interpretation and conclusions.

RBS’s Global Restructuring Unit features heavily in the report, along with the belief it got away with its behaviour because commercial lending isn’t regulated.

Frustration is expressed at the inability to take disciplinary action.

You can almost hear the committee members saying: “This has got to change.”

If you are in any doubt about imminent regulation, skip to the Conclusions and Recommendations section (page 48, number 18).

Our energy and focus shouldn’t be on challenging legislation, rather on helping to shape it before it arrives

“Experience has shown that justification for leaving commercial lending outside of the regulatory perimeter is feeble. Many small businesses are no more financially sophisticated than everyday consumers, yet they will often be required to engage with relatively complex financial products.”

With my chairman of the Association of Alternative Business Finance hat on, I am proud that the association was formed to promote best standards of industry practice under the core operating principles of: security, transparency, responsibility and fairness.

I passionately believe that – as lenders and commercial brokers – our prime focus has to be on making decisions in the best interests of our customers and key to this, of course, is ‘affordability’ and ensuring customers fully understand the ramifications of the agreements they are entering into.

This was designed to build on the excellent lead taken by David Pickering and the Lending Standards Board. The day has arrived when commercial brokers need to demonstrate they are clearly acting in the best interest of their customers and paying considerable attention to the lenders they are recommending and the standards they adhere to.

Let’s ensure the regulators and politicians know the excellent initiatives that are already taking place and in this way help shape and influence the legislation so that it doesn’t lead to the unexpected consequences too much red tape can bring. We work closely with the All Party Parliamentary Groups on Fair Business Banking and Alternative Lending to help get our message across.

At the time I was writing this article, I bumped into Stephen Pegge, managing director of commercial finance at UK Finance.

Stephen says: “Much has changed over the last few years and, in particular, the senior manager and certification regime means

that senior individuals at FCA-regulated institutions have personal accountability for treating customers fairly and following the codes of conduct to which they subscribe. 70% of small business loans are of course already covered by the Consumer Credit Act but it is the Standards of Lending Practice to which 20 financial brands subscribe that now encompass 99.5% of businesses that are most significant. These are customer outcome based, include important commitments on vulnerability and are overseen by the independent Lending Standards Board.”

The alternative lending industry and commercial brokers have a key role to play in providing SMEs with muchneeded finance and ensuring decisions are always made in the best interests of our customers. We need to be aware of the regulatory landscape and be actively involved in shaping it.

Our energy and focus shouldn’t be on challenging legislation, rather on helping to shape it before it arrives. I will return to this theme, but first back to the Treasury

50 | NACFB Magazine

NACFB Magazine | 51

Opinion | & commentary Thought leadership from our Patrons and Members

Helping shape the SME lending regulatory landscape John Davies Director Just Cash Flow

T

here has been considerable debate on whether or not commercial lending is going to be regulated.

It’s an important topic that should get everyone’s attention because if the answer is ‘yes’, then brokers advising on commercial lending will fall under the regulatory regime and all this entails.

At Just Cashflow, we have always operated as if we were a regulated entity, because it is the right thing to do and, to my mind, it has always been a question of ‘when’ and not ‘if’ regulation will arrive.

I believe that day is now a lot closer following the publication of the Treasury committee’s SME finance report.

committee report. I encourage everyone to read all 62 pages, but I am happy to share my own interpretation and conclusions.

RBS’s Global Restructuring Unit features heavily in the report, along with the belief it got away with its behaviour because commercial lending isn’t regulated.

Frustration is expressed at the inability to take disciplinary action.

You can almost hear the committee members saying: “This has got to change.”

If you are in any doubt about imminent regulation, skip to the Conclusions and Recommendations section (page 48, number 18).

Our energy and focus shouldn’t be on challenging legislation, rather on helping to shape it before it arrives

“Experience has shown that justification for leaving commercial lending outside of the regulatory perimeter is feeble. Many small businesses are no more financially sophisticated than everyday consumers, yet they will often be required to engage with relatively complex financial products.”

With my chairman of the Association of Alternative Business Finance hat on, I am proud that the association was formed to promote best standards of industry practice under the core operating principles of: security, transparency, responsibility and fairness.

I passionately believe that – as lenders and commercial brokers – our prime focus has to be on making decisions in the best interests of our customers and key to this, of course, is ‘affordability’ and ensuring customers fully understand the ramifications of the agreements they are entering into.

This was designed to build on the excellent lead taken by David Pickering and the Lending Standards Board. The day has arrived when commercial brokers need to demonstrate they are clearly acting in the best interest of their customers and paying considerable attention to the lenders they are recommending and the standards they adhere to.

Let’s ensure the regulators and politicians know the excellent initiatives that are already taking place and in this way help shape and influence the legislation so that it doesn’t lead to the unexpected consequences too much red tape can bring. We work closely with the All Party Parliamentary Groups on Fair Business Banking and Alternative Lending to help get our message across.

At the time I was writing this article, I bumped into Stephen Pegge, managing director of commercial finance at UK Finance.

Stephen says: “Much has changed over the last few years and, in particular, the senior manager and certification regime means

that senior individuals at FCA-regulated institutions have personal accountability for treating customers fairly and following the codes of conduct to which they subscribe. 70% of small business loans are of course already covered by the Consumer Credit Act but it is the Standards of Lending Practice to which 20 financial brands subscribe that now encompass 99.5% of businesses that are most significant. These are customer outcome based, include important commitments on vulnerability and are overseen by the independent Lending Standards Board.”

The alternative lending industry and commercial brokers have a key role to play in providing SMEs with muchneeded finance and ensuring decisions are always made in the best interests of our customers. We need to be aware of the regulatory landscape and be actively involved in shaping it.

Our energy and focus shouldn’t be on challenging legislation, rather on helping to shape it before it arrives. I will return to this theme, but first back to the Treasury

50 | NACFB Magazine

NACFB Magazine | 51

OPINION & COMMENTARY

Refurbishment revamped Help your clients add value to their property through investment and development. Covering light works through to full conversions.

Rates from 0.8% p.m. | Up to 90% LTC 75% LTV net day one | 70% LTGDV

Can we stop Brexit turning into a Greek tragedy?

Brian West Director Central Bridging

B

ack in the spring of 2017 the former Greek finance minister Yanis Varoufakis suggested that the UK should “avoid negotiating with Brussels at all costs”.

This was the man who had headed negotiations with the EU and the IMF over the extension of Greece’s debts, negotiations where the terms offered by the EU were so harsh, they led to a Greek referendum in 2015 on whether to accept the bail out deal. Varoufakis successfully campaigned for a ‘no vote’ and then promptly resigned when the Greek prime minister revealed to him that he was going to simply ignore the result of the referendum.

Perhaps we should have listened to Mr Varoufakis. It seems we have been somewhat naïve to think that the EU would pay any more attention to the democratic mandate of the 2016 Brexit vote and that this – together with our relative economic strength when compared to Greece – would in any way bolster our negotiating position with Brussels. We needed to remember that Brussels is a democracy free zone. It is an immensely powerful bureaucracy and protector of vested interests imbued with unprecedented law-making capacity. Time and again it has shown that it will seek to negate the will of electorates, and whenever a vote has gone against it, the vote has simply been ignored or re-run.

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

NACFB Magazine | 53

OPINION & COMMENTARY

Refurbishment revamped Help your clients add value to their property through investment and development. Covering light works through to full conversions.

Rates from 0.8% p.m. | Up to 90% LTC 75% LTV net day one | 70% LTGDV

Can we stop Brexit turning into a Greek tragedy?

Brian West Director Central Bridging

B

ack in the spring of 2017 the former Greek finance minister Yanis Varoufakis suggested that the UK should “avoid negotiating with Brussels at all costs”.

This was the man who had headed negotiations with the EU and the IMF over the extension of Greece’s debts, negotiations where the terms offered by the EU were so harsh, they led to a Greek referendum in 2015 on whether to accept the bail out deal. Varoufakis successfully campaigned for a ‘no vote’ and then promptly resigned when the Greek prime minister revealed to him that he was going to simply ignore the result of the referendum.

Perhaps we should have listened to Mr Varoufakis. It seems we have been somewhat naïve to think that the EU would pay any more attention to the democratic mandate of the 2016 Brexit vote and that this – together with our relative economic strength when compared to Greece – would in any way bolster our negotiating position with Brussels. We needed to remember that Brussels is a democracy free zone. It is an immensely powerful bureaucracy and protector of vested interests imbued with unprecedented law-making capacity. Time and again it has shown that it will seek to negate the will of electorates, and whenever a vote has gone against it, the vote has simply been ignored or re-run.

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

NACFB Magazine | 53

OPINION & COMMENTARY

SPECIALIST LENDING SOLUTIONS REFURBISHMENT BUY TO LET

We needed to remember that Brussels is a democracy free zone. It is an immensely powerful bureaucracy and protector of vested interests imbued with unprecedented law-making capacity.

At this critical phase, the tragedy is that our politicians seem to have forgotten that the UK is in fact the sixth-largest economy in the world and a global-trading powerhouse with an infrastructure, regulation and legal system that are the envy of the world. They’ve forgotten that we continue to attract vast sums of foreign investment and that as a nation we are geographically well placed, resilient, business-friendly and far more dynamic than we ever give ourselves credit for. They have overlooked the fact that our economy grew at twice the rate of the French in the second quarter and that we are building houses at near record levels and still failing to keep pace with demand. They have also forgotten that 85% of the world’s markets sit outside the EU. After the 2008 global financial crisis, we bounced back more strongly than virtually any other nation and grew a strong, innovative specialist lending sector that filled the void left by the high street banks. Specialist lenders proved that they could thrive in any macroeconomic environment, many having been founded and forged during a period of huge economic uncertainty. These lenders – along with every successful business in the UK – have not got time for the self-indulgent, navel-gazing of so many politicians.

GDP growth of 0.6% in the last quarter underlines the fact that however badly served by its political elite the workers just crack on. If we could just instil a little bit of the inherent dynamism and strength of character of the British people and of British business into our politicians, how much more favourably might these negotiations have gone, might they still go? It’s never too late to alter course and for our leaders to show a more united front to obtain the best possible deal, but in truth this looks unlikely. The British people and British business will be left to pick up the pieces, but who would bet against us making a success of things despite – rather than because – of our politicians?

54 | NACFB Magazine

A new way for landlords to increase yield and capital growth Our Refurbishment Buy to Let product lets your customer take advantage of the flexibility of Bridging Finance with the surety of an exit onto a Buy to Let Mortgage once the property has been refurbished (providing there are no changes and the property meets the expected valuation following refurbishment). Take a look at our unique approach: One application, which we key for you One expert underwriter providing support for the entire case One valuer for both the bridge and Buy to Let Mortgage One conveyancer and discounted legal fees Two procuration fee payments

Contact your local BDM 0800 116 4385 precisemortgages.co.uk

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498).

Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01966 (4)

With the clock ticking ever faster – a fact which suits the EU more than it does the UK – the withdrawal bill has now seemingly united a significant majority of politicians in opposition. Whether it be rightwing Tories, Scottish nationalists, Labour, Democratic Unionists, Liberal Democrats, Welsh nationalists or Scottish Tories, they are all lining up to reject Mrs May’s ‘take-it-or-leave-it’ agreement. Consequently, the prospect of a ‘no-deal’ scenario comes into ever sharper focus.

The specialist lender you can bank on

Get in touch

From the outset, negotiations were structured to ensure the EU got what it wanted first. Phase 1 – the withdrawal agreement – where the UK accedes to the EU’s demands and agrees a large divorce bill only then to be followed by phase 2, where we can start to talk about trade and what we want from the new relationship. This was effectively a declaration by the EU that they were in control and thanks to the chronic weakness of our own politicians and their inability to set aside party differences and self-interest in favour of the national interest, our weak minority government has perhaps inevitably succumbed to EU bullying.

OPINION & COMMENTARY

SPECIALIST LENDING SOLUTIONS REFURBISHMENT BUY TO LET

We needed to remember that Brussels is a democracy free zone. It is an immensely powerful bureaucracy and protector of vested interests imbued with unprecedented law-making capacity.

At this critical phase, the tragedy is that our politicians seem to have forgotten that the UK is in fact the sixth-largest economy in the world and a global-trading powerhouse with an infrastructure, regulation and legal system that are the envy of the world. They’ve forgotten that we continue to attract vast sums of foreign investment and that as a nation we are geographically well placed, resilient, business-friendly and far more dynamic than we ever give ourselves credit for. They have overlooked the fact that our economy grew at twice the rate of the French in the second quarter and that we are building houses at near record levels and still failing to keep pace with demand. They have also forgotten that 85% of the world’s markets sit outside the EU. After the 2008 global financial crisis, we bounced back more strongly than virtually any other nation and grew a strong, innovative specialist lending sector that filled the void left by the high street banks. Specialist lenders proved that they could thrive in any macroeconomic environment, many having been founded and forged during a period of huge economic uncertainty. These lenders – along with every successful business in the UK – have not got time for the self-indulgent, navel-gazing of so many politicians.

GDP growth of 0.6% in the last quarter underlines the fact that however badly served by its political elite the workers just crack on. If we could just instil a little bit of the inherent dynamism and strength of character of the British people and of British business into our politicians, how much more favourably might these negotiations have gone, might they still go? It’s never too late to alter course and for our leaders to show a more united front to obtain the best possible deal, but in truth this looks unlikely. The British people and British business will be left to pick up the pieces, but who would bet against us making a success of things despite – rather than because – of our politicians?

54 | NACFB Magazine

A new way for landlords to increase yield and capital growth Our Refurbishment Buy to Let product lets your customer take advantage of the flexibility of Bridging Finance with the surety of an exit onto a Buy to Let Mortgage once the property has been refurbished (providing there are no changes and the property meets the expected valuation following refurbishment). Take a look at our unique approach: One application, which we key for you One expert underwriter providing support for the entire case One valuer for both the bridge and Buy to Let Mortgage One conveyancer and discounted legal fees Two procuration fee payments

Contact your local BDM 0800 116 4385 precisemortgages.co.uk

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498).

Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01966 (4)

With the clock ticking ever faster – a fact which suits the EU more than it does the UK – the withdrawal bill has now seemingly united a significant majority of politicians in opposition. Whether it be rightwing Tories, Scottish nationalists, Labour, Democratic Unionists, Liberal Democrats, Welsh nationalists or Scottish Tories, they are all lining up to reject Mrs May’s ‘take-it-or-leave-it’ agreement. Consequently, the prospect of a ‘no-deal’ scenario comes into ever sharper focus.

The specialist lender you can bank on

Get in touch

From the outset, negotiations were structured to ensure the EU got what it wanted first. Phase 1 – the withdrawal agreement – where the UK accedes to the EU’s demands and agrees a large divorce bill only then to be followed by phase 2, where we can start to talk about trade and what we want from the new relationship. This was effectively a declaration by the EU that they were in control and thanks to the chronic weakness of our own politicians and their inability to set aside party differences and self-interest in favour of the national interest, our weak minority government has perhaps inevitably succumbed to EU bullying.

our book is open

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