The recent implementation of the Mortgage Market Review has reminded us all of the importance of knowing your customer and how to strike the balance between over burdensome admin and gaining a thorough understanding of each and every applicant. Some in the industry are asking whether this type of regulation may pass over into the commercial lending space given the fact that knowing your customers is every bit as important for all lenders, commercial or consumer.
Take the invoice finance business at Aldermore for example. We put great importance on personal relationships, we get to know the firms we lend to personally and pride ourselves on the strong relationships we build. This is how we are able to approve 89% of all credit applications. By taking the time to get to know each and every business that comes to us for help we’re able to make well informed and accurate risk assessments. And the figures show we’re helping the rights firms. In 2013 Aldermore’s Invoice Finance business funded £2.4 billion invoices.
These figures are impressive in themselves but when you consider them in the context of the wider economic environment you really start to see that Aldermore is doing something different.
Aldermore’s client numbers in 2013 increased 6% year on year, compared to the invoice finance industry overall which remained static at just 1%. Equally, as the invoice finance market grew by 10% based on the value of invoices funded, Aldermore’s Invoice Finance business grew by 18%. So, what’s Aldermore’s secret? We’re firm believers in getting back to basics and having good old fashioned, personal relationships with the people you do business with. All too often lenders dismiss a loan application without taking the time to really get under the skin of the business applying for a loan. By analysing every application in depth, and spending time getting to know the client you can give a much more reasoned response, and as the figures show, we’re saying yes to the right firms. The UK has many strong companies looking to expand but who need that extra bit of help to run their day-to-day business or fund their expansion ambitions.
Fundamental to our ability to really understand firms is Aldermore’s regional structure. Aldermore serves the whole of the UK though a network of offices across the country. From our regional hubs our lending managers meet business owners to really get a sense of the different issues they face, married with an appreciation of the dynamics and unique challenges each geography presents. There is a tendency for businesses and the media to believe that all the potential lies in the South East of England which is simply not true. We do a lot of work supporting enterprising businesses in Wales, Scotland, northern England and the midlands.
Finally, like our clients, investment is vital to our success. Over the past few years Aldermore has invested in all areas of its commercial lending business; technology, infrastructure and staff, all of which make it easier for firms to do business with us, enable us to assess and process applications quickly and most importantly, get to really know our customers.
So, are we concerned about measures like MMR crossing over into commercial lending? No. Knowing your customer lies at the heart of our business. Our success is evidence that we’re already doing it well.
