Improving landscape for SMEs seeking Finance for Growth
Despite the modern trend of “bank bashing” and the tough economic climate since 2008, there has never been more choice for owner-managed businesses seeking finance for growth.
As new players enter the market, choice of provider is more diverse, as is the range of products offered.
Focusing on the lenders, the UK market consists of the following:-
- Mainstream banks that have an increasing appetite to lend on an asset-backed basis in line with the requirements of Basel III although, in the main, they are generally more stringent as the banking environment has more focus on risk appetite and culture.
- Challenger banks, which have an increasing footprint in the UK and a desire to increase market share in the invoice finance arena. Some of the players include Metro Bank (who acquired SME Invoice Finance in 2013), Secure Trust Bank (who launched their Commercial Finance business earlier this year) and Aldermore.
- Independent companies offering a suite of invoice finance products. The more familiar names being Bibby Financial Services (the largest independent in the UK), Close Brothers, Skipton Business Finance, Ultimate Finance and Hitachi Capital
- Niche players, who do not provide a full range of products but have a more “hands-on” approach with their clients. These include Regency Factors (factoring, trade and stock finance), Ashley Commercial Finance (focusing on smaller business requirements, including factoring, business loans and PDQ advances) and Nucleus Commercial Finance (specialising in funding contractual debt)
- Spot Factors who provide selective finance (sometimes on one invoice). These include the internet portal based providers (such as Market Invoice and Platform Black), established companies (Working Capital Partners and Catalyst) and emerging companies (such as Creative Capital and Spot Factoring UK).
The choice of partner to support UK SMEs could be seen as overwhelming but, with appropriate independent advice from a specialist broker, finding the right partner is the key to success for a growing business.