Industry Insider
With the summer nearly over and the new government having had several months to bed in, does the financial services sector look any different? Few within the industry believed that anything ground breaking would emerge over the last quarter but most were hopeful that some green shoots would start to appear, especially within the asset finance and commercial mortgage markets.
As far as asset finance is concerned, there are few positive signs, with Davenhams shutting the door to new business and IBJ Leasing following the same route. However, Hitachi seem to be re-emerging in the asset finance market but several brokers have said they are waiting to see if they will have the appetite for broker introduced business. Also Conister Trust (Isle of Man) has drifted back into the UK market looking for broker introduced business but on a limited scale. Robert Keep of Norton Folgate said, “There is not a shortage of clients looking for finance, but trying to match their profile with one of the current available lenders is the difficult part. However, businesses do realise that the rates and terms that were available two years ago are no longer accessible, which makes doing business with them a little easier.”
There is still talk of new lenders entering the asset finance market which would be a positive step forward, with a UK high street name, US bank and Asian Bank rumoured to be looking for a team or vehicle to use.
In the commercial mortgage market there has been no material change with finding funding still increasingly difficult. Aldermore have got themselves fully engaged with the property and broker markets to write business. One new player who has entered the market is the Bank of Cyprus which is good to see and will hopefully encourage others to follow this lead. A common theme emerging is that the major clearers are predominantly looking at proposals from established businesses.
Mark Flower of Business Finance Quote.com said, “There are plenty of enquiries coming through, but we just need more desire by funders to lend in the commercial property market. All new entrants would be welcome”.
In sharp contrast, the Invoice Finance market continues to grow with three new factoring lenders and a new trade lender entering the market. Unsurprisingly, Davenhams have shut their doors to new trade and factoring facilities and a number of their staff are emerging in various competitors around the country.
Aston Rothbury’s book has been purchased by Bibby Financial Services and I am sure there will be other consolidations within the market over the coming months. Roger Taylor of Innovation Finance said, “The market is constantly evolving and lenders are all revisiting their lending criteria to make sure it fits in with their plans for the next 12 months.”
Overall there appears to be some green shoots of recovery from each of the sectors as we head into the winter. Hopefully these will grow in 2011 and provide a firm platform going forward.
Andrew Bullard
Head of Business
Cashflow UK
