Industry Insider
Andrew Bullard, head of business at Cashflow UK, gives his insight into the current state of the asset based finance market, including commentary from leading industry players.
2010 is proving to be another difficult year for financial intermediaries. I have spoken to many asset finance intermediaries and they are not only concerned about the level of enquiries, but also the lack of funders and the appetite the current lenders have. A number of brokers are of the opinion that intermediaries are unlikely to see much change until the election has taken place.
BNP Paribas Personal Finance have tentively stepped back into the broker market by taking on 20 plus new brokers from the NACFB and Aldermore Asset Finance are on the fringe, waiting to enter the asset market and take business from brokers. There are also rumours that Investec are going to enter the broker market shortly. Richard Briscoe, who was at Wetherbys, has joined Close to replicate a division there. The market in general is rife with rumours of new entrants from overseas, with both the USA and Asia mentioned, but I doubt this will have any major impact on the UK asset finance market until the fourth quarter or next year.
Carl Wright of CFC says, “The commercial property lending market has hit rock bottom. There are plenty of enquires but we need the lenders back to make it work”. In terms of lenders, Aldermore (formerly Base Commercial) have returned to the market to lend and it is rumoured that the Bank of China might also re-enter. Otherwise the market is fragmented with little appetite for lending for investment properties and certainly no sub prime. Owner occupied has provided green shoots of recovery but only if there is at least a good three years track record.
Whereas in the factoring and invoice discounting market funders are plentiful and growing. David Arthur from Bibby Financial Services says, “last year saw real growth in the business with intermediaries playing a key role”. The ranks of lenders have been joined by First Capital Factors, headed up by David Marsden, a stalwart of the industry. John Shulman and Bob Crumbley has set up Team Factors and it is rumoured that Nick Sanders is re-entering the market. In addition there is talk of at least one independent factor in the South of England being up for sale. Vince Bull of Primary Asset Finance says, “the market is buoyant and finding lenders appears not to be a problem”
A number of brokers have disappeared from the market due to a lack of business, lenders and debit backs. So not the easiest of markets at the moment for asset finance, but the factoring and invoice discounting market is providing a glimmer of hope. Many intermediaries believe customers may change their buying habits once the election is over which could help all in the second half of the year. Let’s hope the second quarter bears some more fruit for the UK broker market.
Andrew Bullard
Head of Business, Cashflow UK
