FR: What have been the biggest milestones for Aldermore Asset Finance in the last year?
After opening up for business in the midst of the financial crisis, we celebrated Aldermore’s fifth birthday in May this year, which is perhaps our biggest milestone to date! But if we are looking to figures, in 2013 Aldermore’s asset finance origination amounted to £609.8 million, an increase of 74% compared with 2012. This is particularly pleasing given it was against the backdrop of a flat overall market
FR: Alternative lending really came into its own last year – do you think this is something that is set to continue, and if so, why?
It is often taken for granted that asset finance is an “alternative” funding method but it is a label that is becoming increasingly unsuitable. 60% of UK small & medium sized businesses now use asset finance to fund big investments. More and more businesses are becoming aware of asset finance and realising that it is a relatively simple form of finance that can really help. I don’t think that asset finance will be considered ‘alternative’ for very much longer.
Regarding the industry’s growth, I feel optimistic that it will continue. The Office of Budgetary Responsibility continues to forecast strong growth in business investment which is intrinsically linked to asset financing. Aldermore’s SME monitor showed that optimism amongst UK SMEs is now at its highest level for a decade. Additionally, we’re seeing an increased demand from an array of sectors meaning we are no longer dependent on the fortunes of any one sector. All things considered I could quite easily see the asset finance industry return to its pre-crisis high of £30bn within the next five years.
FR: Why and when should intermediaries recommend asset finance to their clients?
The uses and customers of asset finance are becoming increasingly diverse. It can help almost any business which needs to purchase costly equipment in order to operate successfully. Whether a firm is looking to grow, to replace a broken asset or to buy cutting edge machinery the initial cost of the purchase can sometimes sap up much-needed business capital. Aldermore offers loan to value of up to 100% of the asset cost enabling a business to break down the payment into bite-sized chunks. It also allows firms to pay for the asset whilst it supports their business, firms can also fix the cost of buying it too.
All of our brokers consider a whole host of options along with asset finance in order to find the product most suited to their client’s needs. We have a strong network of brokers who understand that asset finance can provide a taylor-made finance solution for many firms and we work closely with them to identify which businesses can benefit from asset finance and which might better off with an alternative solution.
FR: How can we ensure best practice within the broker community and what steps do Aldermore take to keep brokers up-to-date?
Since the FCA took over regulation of consumer credit from the OFT on 1 April, we have seen a changing regulatory landscape for intermediaries. Under the FCA I expect to see a more challenging environment for funders and their introducers, one in which our products, processes, rates, and distribution practices will be heavily scrutinised. To ensure full compliance with the new rules and regulations Aldermore has sponsored NACFB's new compliance services, which aim to take affiliated brokers through the pending FCA application process and the new Consumer Credit Act regulations. I’m sure these new regulations will result in a more robust asset finance industry over the coming years.
As our industry is heavily intermediated, at Aldermore we consider it vital to ensure the highest possible levels of understanding, not only amongst our staff but also for those that conduct business within the industry. This is why we’ve developed a bespoke two day training programme on asset finance to which we will invite entry level brokers free of charge. The first training event will be held in July and we plan to continue and expand this programme over the coming years to support the development of the next generation of asset finance professionals, both within the Bank and across the industry.
FR: If you weren’t in financial services, what would you be doing?
If I wasn't working in this industry I'd love to be the patron of an old fashioned country hostelry serving great food, fine wines and offering a relaxing environment for people to enjoy the company of family and friends.
