FR: Liberis launched a new app for brokers at the end of last year – tell us more about that.
We’ve always valued being a finance company that demonstrates a clear point of difference in a very busy marketplace. Our customers tell us that they want faster decisions (one way or the other) and less hurdles to jump in order to access short term cash flow finance. Many of them use the services of third party intermediaries or brokers.
Brokers are a busy group of people, juggling many roles and multiple clients, so we figured that anything that improves our process and reduces admin time and effort would be welcomed. We’ve also launched a dedicated portal too, so both app and portal will make processing deals easier and faster, reducing time spent down to minutes. Brokers will be able to submit and manage deals 24/7, keep track of them at every stage, upload information and make changes at any time. They will eliminate the need for paper forms and time consuming scanning and emailing. And because a submitted deal is automatically logged, showing instant ownership, there’s no risk of the client going via another broker or to Liberis directly.
The app also includes a quoting screen where brokers can adjust advance amount, factor rate, split and commission amount to create the perfect deal for each client as well as a merchant-friendly screen that removes commission, so brokers can show the deal directly to customers.
FR: You also recently joined the Alternative Business Funding portal – why did you feel that was important?
From market research we found a significant number of business people had no or limited knowledge of the alternatives to mainstream finance. In order to raise the profile of non-bank funding we needed to look at more direct and cost effective routes to market. With a relatively unknown product and brand - and without the matching marketing budgets of the bank finance companies we need a rifle rather than shotgun approach to be found by our customers.
We were delighted to be only the second company to join the portal after its launch earlier this year and be part of such as transformational initiative. Collaborating with other non-bank funders is a step change in improving the visibility of alternative finance options and making access easier for small businesses. The portal represents a significant move in shifting the funding balance from banks so small businesses have fast, fair, and transparent access to a diverse range of finance models. The Portal members have also been instrumental in helping to secure legislation so banks have to signpost businesses they turn down for finance to other funders. This will revolutionise small business funding.
FR: What challenges do you feel are most affecting brokers in the current market?
Undoubtedly the role of the broker is to match customer with funding partner. In this relationship ,the broker has to be fully appraised of the available financial instruments and has to be able to maintain a good customer database. The broker point of difference has always been relationship management. They have been expert in helping clients understand the available financial products in a noisy and sometimes confusing marketplace. Many finance companies, including Liberis, establish strong mutually beneficial relationships with broker partners providing a great information exchange and knowledge share. This reciprocity allows for a better understanding of business needs, the opportunity for product development and investment in areas that matter most for all stakeholders.
The new financial providers in the space (and some of the more progressive established ones) are becoming incredibly skilled at lead generation. This will undoubtedly be a threat to the historical broker model. All of the new alternative finance companies embrace online lead generation given that this form of searching behaviour closely aligns with how the new generation SMEs operate their businesses. Whether it be insurance, product , utilities or even their own marketing , the internet becomes the primary route to market for the customer to find anything – and that includes finance.
The brokers themselves have got to understand what their point of difference is and have to be able to demonstrate the value add in the transaction to their customers. It is very similar to the retail high street where the early adopters to online marketing and operations survived and those who failed to reinvent themselves withered and died. The best brokers provide knowledge, convenience and certainty that they will be provided with funds. They can invest their time in building warm and personal customer relationships which last a business lifetime. The continuous stream of new customers is business critical and it is vital that brokers understand how to do this in a cost effective way.
FR: Why should brokers embrace alternative finance?
Brokers are absolutely vital to the procurement of financing for the UK’s busy SME marketplace. With the advent of new product comes the chance for brokers to reach out to their current customer database and find new customers who might previously have been ineligible for funding due to attitude to risk or finance provider rules in the wake of the economic downturn. My advice would be for them to get to understand the products available and how they can effectively add value in the transaction. Choose the new providers like Liberis that offer full training and access to their platforms to enable faster and efficient transactions that enhance both the customer relationship and productivity.
Alternative finance is going to grow very quickly as bank lending continues to be challenging. Next year the market could be worth well over £4.4bn from the current £1.74bn exit in 2014. The brokers have a real opportunity to get ‘in the middle’ of this by uniting needy SMEs with the new financial instruments now being spawned. The early adopters to alternative finance are already reaping the benefits of this new financial marketplace.
FR: If you weren’t in the financial services industry, what would you be doing?
With my background steeped in operations of multi-site businesses, I would love to be at the helm of a current or ‘future’ brand in either the hospitality or retail sector. In the same way that Liberis has brought some disruption to the financial sector, I would like to bring some ‘newness’ to the high street either by reinvigorating a tired brand or by starting a new one. I’m a big fan of Pizza Hut restaurants and Cotswold Outdoor for keeping true to their values whilst continually improving their models.
