Bibby Financial Services strengthens presence in South West England

Bibby Financial Services (BFS) has appointed Sue Pengelly as Business Development Manager (BDM), South West of England, as it looks to expand its support for small and medium-sized businesses in the region.

Sue will be based at BFS’s South West office in Bristol and joins a team of seven BDMs, alongside nine other employees responsible for new business generation and client relationship management.

Her appointment comes as BFS aims to further strengthen its presence in the South West, following a successful year in 2018.The team wrote a total of 126 deals last year and the business anticipates similar growth for the region in 2019.

In her new role, Sue will primarily focus on securing new business opportunities for BFS, with a focus on Devon, Cornwall and Somerset, putting her extensive knowledge in commercial banking and regional business to use.

Joining BFS with over thirty years’ experience in the financial services sector, Sue has held a diverse range of positions across the South West, specialising in invoice finance.

Most recently, she worked as a Business Development Executive for Balance for Business, a well-known introducer based in Plymouth, where she assisted with sourcing funding solutions totalling £8m for South West businesses in 2018.

She has also held roles as a Relationship Manager at both Clydesdale Bank and Barclays – for six and thirteen years respectively – as well as a local company, where she managed a business portfolio in Devon and Cornwall.

Speaking of her appointment, Sue said: “BFS is currently writing one in every two factoring facilities for small businesses in the South West and has an excellent local support network, from businesses to brokers.

“For many years the business has maintained a high position in The Times Top 100 Best Companies to work for, so it was an easy decision for me to come on-board. I’m excited to join the team and support BFS on its journey to becoming the funder of choice for the South West.”

Terry Burke, Head of Sales for BFS – South West, added: “Sue joins the team at an exciting time, as we look ahead to 2019. She brings with her valuable experience and extensive regional expertise, which will help us as we seek to expand our reach and fund SMEs further afield in the region.”

UK’s Largest Personal Insolvency Firm Creditfix Bolsters Team In The West Midlands

with money, following the acquisition of a Birmingham-based debt management business.

Creditfix has expanded its comprehensive range of debt relief solutions by acquiring B2C Finance Ltd, trading as ‘Back2Credit’, a well-established debt advisor based in Birmingham, a move, which is to create 20 new jobs for the city.

Creditfix has helped over 140,000 people across the UK get back on track with their finances, and this new acquisition will help them expand their service radius to better support those who need it the most.

Paul Mason, CEO at Creditfix, acknowledged how this expansion continues the company’s dedication to support anyone who needs help.

“We know that it can be difficult to discuss your debt problems with anyone, even loved ones, but recently we have seen a significant increase in the number of people looking for help. While we have been able to support over many thousands of people from our offices in Glasgow and Manchester, there are still more who need help in every corner of the UK.

“This acquisition is a great opportunity for the company, and anyone struggling financially. Following on from our office expansion in Greater Manchester earlier in the year, Birmingham helps strengthen our services for the West Midlands area.

“Our mission right now is to carry on the great work the Back2Credit team have been providing, by combining our experience and expertise to design all-inclusive debt-relief solutions leaving no one to struggle on their own.”

Smart Software the Pathway to New Challenger Asset Finance Businesses

The advent of open banking and the continuing emergence of new challenger and mobile banks is not limited to traditional banking. Asset finance is ripe for market disruption as specialist lenders move to target discreet market segments. The key to this changing landscape is the flexibility and availability of operating software.

Asset Finance software experts Copernicus’ MD Allen Jones reflects; “Specialist asset knowledge, combined with financing expertise is at the heart of challenger asset finance providers we expect to emerge at an accelerating rate. The people behind these emerging businesses know their markets and can provide a superior, appropriate and insightful customer purchasing and financing journey.”

The trend highlighted by Jones is already evident in the rapid emergence of specialist car leasing businesses. It is not just a lease that these businesses are selling it is expertise on the item and how to link finance and asset effectively in a frictionless manner, something that is very appropriate to the UK’s rapidly expanding, but time-short SME business sector. The result is a deeper bond of trust and respect than just the availability of money.

Allen points to the emergence of challenger businesses such as Countingup, which is targeting the UK’s 4.5 million sole traders, freelancers and contractors with a banking service with automated accounting services built-in as pointing the way for specialist asset finance providers. The business took just four months from inception to launch its current account.

The opportunity for specialist asset financiers is a similar one. The UK’s fast-growing SME market does not have or often need in-house procurement resources. What they need is trusted expert guidance and convenience. The emerging agile asset financiers, armed with market knowledge and focus on finance and asset have a natural service edge to fill the gap that exists.

What makes this type of venture possible is the increasing lack of barriers to market entry and the availability of affordable and flexible software to manage business operations, as Jones concludes;

“A decade ago, the processing breadth and agility available to asset finance business from products such as our Solar asset finance system were unavailable. Today, we can have an asset finance business up and running in hours rather than months with all the necessary products, workflow and documents and complete with the accounting controls required to manage a finance portfolio.

“In today’s app-led world, customers want; speed, service, expertise, a frictionless buying experience and a fair price. I believe there will an increasing place for the type of nimble asset finance business that can provide this and inevitably this will accelerate a new level of market fragmentation in assert financing.”

Asset finance market reports new business stable in November

New figures released today by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase) in November was at a similar level to the same month in 2017.

The plant and machinery finance and business equipment finance sectors reported new business up in November by 9% and 8% respectively, compared with the same month in 2017. By contrast, new finance for business cars and IT equipment fell by 6% and 32% over the same period.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The asset finance market’s performance in November means the industry remains on track to report a record level of new business in 2018 as a whole.

“The percentage of UK investment in machinery, equipment and purchased software financed by FLA members reached 32.2% in the twelve months to September 2018, a nine-year high.”

UK insolvencies set for +9% rise in 2019, even if a Brexit deal is agreed

The number of UK business insolvencies is set to rise by +9% this year, even if a deal is agreed with the EU before the Brexit deadline, according to Euler Hermes, the world’s leading trade credit insurer.

The company’s latest Global Insolvencies Index reveals a further 23,660 businesses are expected to become insolvent in 2019 compared to last year if an agreement on separation terms for future UK-EU relations is in place before the 29th March. The +9% increase follows a +12% uptick last year.

Only five countries (China, Slovakia, Denmark, Chile and Sweden) will see a greater rise than the UK globally. Insolvency levels will remain static in Germany, The Netherlands and Belgium, with France (+2) and Italy (+2%) set for a small increase.

The firm’s economists have calculated that there is a 70% chance of a deal being agreed with the UK ahead of the deadline. But given tight deadlines an extension of Article 50 cannot be excluded which would avoid a disorderly exit and the implementation of WTO tariffs on goods exchanged with the EU.

By contrast, Euler Hermes says that in the event of a ‘no deal’, UK corporate failures are expected to rise by +20%. This scenario is rated at a 25% probability.

Euler Hermes believes that there is a slim chance (5%) that the UK will stay in the EU in 2019, which would the number of insolvencies rise by +2% for the next 12 months.

Ana Boata, European Economist at Euler Hermes, said: “Increasing late payments, tighter financial and monetary conditions, sluggish consumer spending, deteriorating corporate margins and softening GDP growth are together posing challenges to company finances and putting pressure on almost all areas of the UK economy.

“Overall, the prolonged high Brexit uncertainty has significantly reduced the pockets of resilience in the economy. We expect GDP growth to weaken to +1.2% this year as a result, with at least -1% contraction forecast if the UK leaves the EU with no deal in place. In this scenario, private consumption and business investment would tighten by -1% and -4% respectively, with Sterling expected to fall to 0.88 against the Euro by the end of the year.”

Euler Hermes predicts that the total number of insolvencies globally will rise by +6% this year as softening economic momentum, coupled with tightening financial conditions, will increase stress in the majority of countries across the world.

According to the report, two in three countries are expected to record an increase in 2019. The number of bankruptcies in China will rise by a fifth (+20%) this year – the fastest rate of any large global economy – as GDP growth falls to its lowest point in a decade.

CA issues response to Law Commission’s leasehold enfranchisement reform consultation

The Conveyancing Association (CA), the leading trade body for the conveyancing industry, has today (10th January 2019) announced it has responded to the Law Commission’s leasehold enfranchisement reform consultation.

The consultation paper, entitled, ‘Leasehold home ownership: buying your freehold or extending your lease’, was published in September last year and the deadline for responses recently passed on the 7th January 2019.

In its response to the questions outlined in the consultation, the CA argues that any reforms should be relevant across England and Wales including:

· The entitlement of leaseholders of both flats and houses to a lease extension of 999 years on payment of a premium.

· The fact leaseholders should have a right to a lease extension at a nominal ground rent, plus they should have the choice to extend the lease without changing the ground rent but at a reduced premium and on the flip side should have the choice to extinguish the ground rent (without extending the lease) at a reduced premium.

The CA argues that once the premium and costs of a lease extension are reduced, more leaseholders will be able to benefit from the proposals and free themselves from the trap faced by those who have a lease with terms that are not acceptable to the major lenders.

It says that the ability to extend a lease which has a term below 85 years, with the added ability to re-negotiate onerous clauses in the lease using prescribed wording, will make it possible for existing leasehold owners to sell their property at its full market potential and have access to the whole of the leasehold lending market.

The Association is also calling for the introduction of a fast-track dispute resolution service which has jurisdiction over all lease terms, rather than just some. It says that the First Tier Tribunal currently only has limited jurisdiction on these matters and the redress schemes only has jurisdiction over service complaints in property management and not in connection with onerous lease terms, the fees charged or the timescales in which information is provided.

In its response, the CA agrees that new terms introduced into any lease extension should be drawn from a prescribed list, arguing that such standard wording can then be written in plain English and be more widely understood by the public with the provision of basic advice. It argues this would reduce costs, create a better educated consumer and lead to a higher proportion of leaseholders seeking extensions as they would not be put off by the perceived complexity of the process and terms used.

The CA also suggests that it is not alone in thinking that the premium calculations for lease extensions and enfranchisement are overly complex and have developed over time to be weighted heavily in favour of the landlord.

It argues that, what might have been appropriate in a time where leasehold property commanded lower prices per square foot than freehold, is simply not valid where full market value has been paid for a property along with a large amount of rent. In its response the CA sets out the inequity of a leaseholder having to pay time and again for the privilege of being able to live, sell or remortgage their own property and supports the Law Commission’s proposals for simplifying the premium calculation.

The CA’s response to the Law Commission consultation follows a response it made to last year’s Ministry for Housing, Communities & Local Government (MHCLG) consultation on Implementing Reforms to the Leasehold System.

The full Law Commission consultation document can be viewed at:

Beth Rudolf, Director of Delivery at the Conveyancing Association, said: “We, at the CA, see this response as the natural culmination of the vast amount of work that has been carried out in the leasehold arena and, following this consultation, we are extremely hopeful that we can have a system that is fit for purpose and does not work against both existing or new leaseholders in the future.

“Developing a system which allows leaseholders to extend their lease in a unified and stable way, without the vast amount of cost this currently requires, will open up this whole market, delivering far greater confidence to existing leaseholders and ensuring they are not exploited by freeholders or feel prisoners in their homes due to being unable to remortgage and/or sell their property.

“The leasehold scandal that has emerged over the past few years has shown that we need far greater clarity and transparency in this part of the housing market, and we are still utterly convinced that a greater take-up of Commonhold arrangements, as opposed to leasehold, would be a far better option for many consumers.

“That said, with the measures we outline in this response, and the work of all stakeholders, we should be able to move to a much fairer leasehold arrangement and start to provide far greater confidence for those who have, up until now, been placed in a very unsatisfactory position.”

MP secures ten minute rule bill promoting ‘project bank accounts’ to tackle late payments

Late payments campaigner, and MP for Oldham East and Saddleworth, Debbie Abrahams, has secured a ten minute rule bill which says that all payments on government and public authority contracts should be made through a ‘project bank account’ system ensuring small businesses are paid directly and promptly, whilst also protecting them against losses, such as seen with Carillion’s collapse.

The bill, which is titled: Public Sector Supply Chains (Project Bank Accounts) Bill will be heard on 15th January 2019 and aims to set in law the requirement that all parties delivering government and public authority work – from the lead contractor right down the supply chain – will receive payment from the same secure ‘pot’ of money.

Before Christmas Debbie challenged the Chancellor, Phillip Hammond, to support her bill to help end late payments and protect small business suppliers from collapses like Carillion*. Mr Hammond replied saying it was ‘an interesting idea and that the Cabinet Office commercial secretariat is looking at her proposals’. Since then Debbie has been in contact with both the Cabinet Office and business ministers in order to secure the Government’s support for her bill.

Debbie, who created the award winning Be Fair – Pay on Time campaign in 2012, said: “Late payment by large businesses is a massive issue across all business sectors leading to billions of pounds being owed to smaller companies for work that has been done.

“When payments take a long time working their way along a supply chain from the contracting authority there is a risk that the cash could be cut-off at any time because of payer insolvency.

“We witnessed the catastrophic effect this has with the collapse of Carillion, nearly a year ago, with £2bn of unpaid invoices to their smaller suppliers, which included builders in my own constituency. The precarious position of other major Government contractors like Interserve means urgent action is required.

“My ten minute rule bill will require all government and public authority work should be paid to suppliers using project bank accounts.”

Businesses will reap the rewards of Open Banking by 2020

Three-quarters (74%) of businesses in the UK surveyed by Centtrip, the international payments, treasury management and foreign-exchange specialist, believe they will benefit from Open Banking within two years.

Introduced in January 2018, Open Banking was designed to give customers and companies control of their financial data, enabling them to view it in one place. It was also intended to provide a secure way of sharing that information with third parties and give access to better deals and a wide array of financial products and services.

Now, almost a year on, Centtrip has analysed its, so far slow, uptake by medium-size and large firms. The fintech’s study showed that 64% of businesses agreed that Open Banking will save them time and 58% believed it would also save them money.

With this new and efficient way of managing one’s finances, it came as no surprise that 62% of businesses said it made life easier for staff and 42% noticed a positive impact on their payments and expenses.

Although a considerable amount of development has taken place behind the scenes to make Open Banking available for wider use, 8% businesses still have no idea what it is. The lack of understanding of the benefits of Open Banking has meant that 59% of respondents are not yet reaping its rewards. In fact, only 28% of respondents aged 55 and over said they had a firm grasp of Open Banking compared to 85% of those aged between 18 and 34.

Brian Jamieson, CEO and co-founder of Centtrip, said: “Open Banking has a huge potential to shift the way financial data is shared and managed. A year on from its launch, we are just starting to understand its benefits and the way it may reshape the financial sector. Even so, many business leaders have yet to reap its rewards and realise its potential to revolutionise the way businesses approach and manage their financial information. Collaboration between fintech and banks is the root to its success. By joining efforts, they can do a lot more than when on their own when it comes to putting it to use.”

R&W Scott secures £3.6m funding line from Bibby Financial Services for MBO from Real Good Food Plc

Bibby Financial Services has provided £3.6m to RW Scott, Carluke (South of Glasgow) based food wholesaler which has recently been acquired by an experienced management team.

Working capital was provided to assist the buyout with a combined facility of £2m in Invoice Finance, £500,000 in Stock Finance and £1.1m in Asset Finance to fund the acquisition of plant and machinery.

The funding facility was secured by R&W Scott’s to fund an ambitious growth and turnaround plan for the 130-year-old business which employs 94 people. It is an important supplier of ingredients to the bakery, confectionery and retail sectors in the UK and worldwide.

David McIntyre, Corporate Manager of Bibby Financial Services, said: “We are delighted to support the MBO of RW Scott with a bespoke working capital arrangement. This historic business has an ambitious growth and turnaround plan and a leading position within the foodservices sector, and we are delighted to support its acquisition.

“Having spent significant time with the management team, we were able to quickly understand the needs of the business and develop our own plan to fund its from Real Good Foods. We look forward to seeing the business grow and develop from its strong foundations.”

Stephen Currie, Director of RW Scott, said: “With a leading reputation in the sector, our business spans 130 years of history and we are proud to be relaunching RW Scott. We sought a funding partner with a deep understanding of our business to help us unlock working capital assets for the buyout.

“BFS has provided us with the strongest platform for our particular operational structure. Invoice Finance and Asset Finance will aid our growth significantly and provides the working capital we need to grow.”

Bibby Financial Services surpasses £100m in funding for northern businesses in 2018

Leading independent SME funder, Bibby Financial Services (BFS), has provided over £100m in funding in the North this year through its specialist corporate team, significantly boosting its commitment to support SMEs in the region.

BFS has supported corporate businesses across a wide range of sectors including recruitment, manufacturing, catering and retail. These northern-based businesses have used the funding to embark on the next stage of growth, manage cashflow and suppliers and entering new markets.

BFS’s corporate team supports business with a turnover above £5 million with asset-based lending solutions including trade, stock, invoice and asset finance as well as commercial mortgages and cashflow support.

Successful businesses that have received funding this year include: media advertiser, Open Outdoor Media and pharmaceutical wholesaler, Veenak International, and manufacturer, Thornhill.

Dan Burton, Regional Head of Corporate, at Bibby Financial Services, said: “As a business with northern heritage, we’re pleased to have helped even more fast-growing SMEs in this too often overlooked region. With Brexit looming, it is crucial we continue to invest in entrepreneurs and new businesses as well as support initiatives that fuel the Northern Powerhouse.”

“It has been an exciting year at BFS, and our commitment to quickly understanding the needs of SMEs has allowed us to help ambitious businesses in this region thrive. It is vital that investors recognise the opportunities that northern SMEs provide for the wider community and economy. We are proud to work closely with so many of these successful businesses already.”