Industry Insider
The first quarter of 2010 is now under our belt and varying stories are emerging from the asset, commercial mortgage and the invoice finance sectors.
Most intermediaries from the asset finance sector are still suffering from a lack of willing lenders. Ian Fielder of First Finance, said, “there is a lack of commerciality from the bank owned asset finance companies unless the client banks with the parent company”. Whilst rumours are abound of new entrants to the market, none have been seen to date. The broker community are finding it easier to place smaller deals of up to £100k in the asset security sector (i.e. computers) with several lenders happy to look at this type of business. Neil Smith of Direct Asset Finance said, “there is a real lack of prime lenders in the current UK asset finance market”. Hopefully this will change as we progress through 2010.
Davenhams are up for sale which will affect the asset finance division and its loss to a competitor would mean one less line of credit available to the market. Hopefully they will have success in replacing their current funding to keep the business going in the UK market. Close continue to be active on all fronts and the re-organisation of Singers appears to be producing positive results for the brokers they already deal with. Haydock have re-appeared and are becoming more active in the broker market.
Commercial Property Finance is still suffering from a lack of active lenders, with those lenders left offering lower loan to values, higher margins over base and larger upfront fees. David Barron of ASC Surrey, said, “we are having to work twice as hard to get deals placed compared with two years ago”. Commission is a thorny subject for these intermediaries, David Barron continued, “it is easier for us to charge the customer than allow the lenders to disclose what commission they are paying us”.
Aldermore (ex Base Commercial) have become very active in the commercial property finance market, but currently there are no new entrants. There is talk that Investec might be considering entering this field of funding which, if that is the case, would be good news for both customers and intermediaries alike.
The factoring and invoice discounting market continues to confound the critics by expanding further with active lenders and new players entering the market such as John Shulman and Bob Crumbley with their new company Team Factors. Ian Steward, managing director of Close Invoice in Manchester, said, “the factoring and invoice discounting market is becoming more competitive with various factors now re opening doors to business they would not consider 18 months ago.”
So a reasonable quarter for the invoice finance market, but the asset finance and commercial mortgage introducers are still having problems. Now that the electorate have spoken, the new coalition government will hopefully provide a foundation for continued growth in 2010 and for those green shoots we hoped would spring up in the first quarter.
Andrew Bullard
Head of Business
Cashflow UK
