New research published on supporting business customers in vulnerable circumstances

The Lending Standards Board (LSB) and the Money Advice Trust, the charity that runs Business Debtline, have today published a report that explores the impact of vulnerable circumstances on people who run small businesses.

The report draws on insight gathered from LSB registered firms, as well as interviews with money advisers and clients of Business Debtline, the UK’s only dedicated free debt advice service for small business owners. The research found that there is often a direct link between a business’s financial difficulties and the person running the business experiencing some form of vulnerable circumstance, such as a mental health problem or serious illness.

Given the importance of small businesses to the UK economy, understanding the nature and impact of vulnerability in this context is crucial. The report finds that while progress is being made, there is more that can be done to support business customers in vulnerable circumstances. The findings aim to stimulate discussion in this area and enhance firms’ understanding of how vulnerability affects their business customers.

Firms are being encouraged to undertake a gap analysis to assess potential improvements to their policies and processes in the five key areas of policy, identification, support and management, training and monitoring.

Dave Pickering, chief executive of the Lending Standards Board said: “Identifying and supporting customers in vulnerable circumstances continues to be high on the agenda for financial services. However, much of this work has so far taken place in the personal, rather than business, customer space.

“We hope this report – in conjunction with our Standards for Lending Practice for Business Customers, launched last year – will prove a useful tool for firms looking to improve in this crucial area.

“The LSB will ensure that we keep driving the SME vulnerability agenda forward, working with our registered firms and other industry stakeholders to help bring about positive change for small businesses.”

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs Business Debtline said: “Every day our advisers at Business Debtline help people whose businesses are in financial difficulty, with a range of vulnerable circumstances often contributing to the challenges they are facing.

“Small business owners are no less likely than anyone else to experience vulnerable circumstances – and with small businesses contributing so much to the UK economy, it is crucial they receive the support they need.”

“We have been pleased to partner with the Lending Standards Board to explore how the industry can bring the benefits of its focus on vulnerability to the business customer space. We look forward to working with firms as they consider the report’s findings in the months ahead.”

FSB welcomes supply chain funding move

The Scottish Government today announced some changes to their Flexible Workforce Development Fund, including moves that will allow smaller businesses in big business supply chains to access the funding.

Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair, said: “In one of his first big decisions as Minister for Business, Jamie Hepburn has made a smart move. By opening this fund up to supply chain businesses, we should see more small Scottish firms taking action to upskill their staff.

“FSB made representations about problems with this fund last year, so we’re pleased to see action to fix it. However, there’s still work to be done to build closer links between enterprise and education if we’re to tackle skills shortages and improve levels of in-work training.”

UK businesses show signs of distress as Brexit uncertainty continues, Creditsafe Watchdog Report finds

The number of failures of UK companies has risen 30.0% to 4,827 in the second quarter of the year, compared to the same period a year ago, according to the latest figures from Creditsafe’s Watchdog Report.

The quarterly Watchdog report, which analyses financial data across 12* UK business sectors, showed that high profile high street retail insolvencies, such as Poundworld and Bargain Booze, have added to the malaise, while 10 of the 12 sectors analysed by Creditsafe showed year-on-year increases in company failures.

This, in turn, had a knock-on effect on the volume of bad debt owed to suppliers of the 12 sectors, which increased by a staggering 307.0% to £2bn, compared to the same period a year ago. Large company failures leaving bad debt behind contributed to this alarming jump; as an example Maplin Electronics left £50m in bad debt to suppliers after becoming insolvent along with Café Pasta and Pandoraexpress both leaving £11m after closing their doors. The number of companies placed in the ‘very high’ and ‘high’ risk bands has also risen significantly by 16.1% and 30.1%, respectively. This is taking place in the context of reduced total sales, which have dropped across the sectors by 6.4% in the last three months to £6.9tn.

While the overall outlook is concerning, there are some positive indicators as the number of active companies across the 12 sectors rose by 14.7% over the last year to a total of 3.3m. Employment is also up by 13.1% across the 12 sectors to approximately 29.2m employees, despite the high business failure rates.

“The company failures we were discussing three months ago seem to have continued and set a worrying trend for the UK economy,” said Chris Robertson, UK CEO at Creditsafe. “Despite a few green shoots of growth in the first quarter of the year, it’s disappointing to see that across our 12 key sectors the UK is moving in the wrong direction yet again and continuing to add to levels of supplier bad debt.

“In the shadow of major collapses like Carillion and the uncertainty of ongoing Brexit negotiations, it seems that these economic traumas are having a significant effect on all corners of British industry. A 30.0% jump in company failures is certainly a cause for concern and companies need to be future-proofing their operations and protecting themselves from potentially damaging business endeavours.”

* Farming and Agriculture, Construction, Banking and Financial, Hospitality, IT, Manufacturing, Professional Services, Retail, Sports & Entertainment, Utilities, Transport and Wholesale.

FSB: Boosting jobs while delivering growth should be national priority

Both Scotland’s employment and unemployment rate rose slightly between March and May 2018, according to new figures published today.

Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair, said: “A boost in Scottish employment is welcome news, despite the increase in those registered unemployed. Ensuring both of these numbers move in the right direction, while boosting local growth, must be a national priority

“Smaller Scottish firms are now more confident about trading conditions than they have been for some time. Policymakers need to build on this optimism by tackling issues like the scourge of late payment and ensuring smaller firms get a fair share of public contracts. While everyone wants clarity about our future relationship with Europe, there’s action that could be taken at home to boost growth.”

Confidence edges to two-year high since Brexit vote but fails to lift business investment plans

UK businesses are not increasing their recruitment and investment plans since the start of the year, despite confidence reaching a two-year high since the EU Referendum vote, according to the latest Business in Britain report from Lloyds Bank.

The confidence index – an average of respondents’ expected sales, orders and profits over the next six months – edged slightly higher to 25 per cent compared with 23 per cent in January 2018. It remains above the long term average as businesses are more confident than at any point since the EU Referendum vote in June 2016.

The Business in Britain report, now in its 26th year, gathers the views of over 1,500 UK companies, predominantly small to medium sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

Investment and recruitment muted but difficulty remains in finding the right skills
The net balance of firms looking to grow investment in the next six months fell marginally by one point to 12 per cent, while a net 8 per cent of firms anticipate an increase in their headcount, compared with 9 per cent in January.

The share of firms who continue to report difficulties in hiring skilled labour increased three points to 49 per cent and remains historically high with London (65 per cent) and the West Midlands (57 per cent) finding it the hardest to recruit.

Brexit uncertainty and weaker UK demand top firms’ concerns
Brexit uncertainty remains the single greatest risk to firms in the next six months, cited by 21 per cent of firms, closely followed by weaker UK demand at 16 per cent.

Over a third (36 per cent) of businesses expect a negative impact on their business if no trade agreement is reached with the EU. A fifth (20 per cent) expect a positive impact while almost half (44 per cent) do not expect any impact or didn’t know.

Sharon Geoghegan, Managing Director, SME Banking, Lloyds Banking Group said: “Despite concerns on the wider economy, businesses are still relatively upbeat as our latest report shows business confidence hitting a two-year high since the Brexit vote. England’s better than expected performance in the World Cup will also boost the nation’s feel-good factor.

“As we look ahead, the external environment remains mixed as Brexit uncertainty and weaker UK demand are businesses’ biggest concerns for the next six months. Despite those risks and rising global trade tensions, business investment and hiring intentions remain at similar levels to the start of the year.”

Export expectations remain positive
The outlook for exports improved. A net 27 per cent of exporters anticipate stronger exports in the next six months, up from 24 per cent in January. Companies expect the strongest demand to come from the US, Europe and the Middle East, while prospects are expected to be the weakest in Russia and South America.

Construction sector sees big rise in confidence
Business confidence was the highest in the transport & communications and construction sectors with the construction sector registering a significant rise compared with January’s survey, rising 12 points to 26 per cent. In contrast, confidence was the lowest in retail & wholesale and hospitality & leisure and fell from January’s report.

Confidence rises in most regions but strongest in the South
Most regions saw a rise in business confidence and was the strongest in London (31 per cent) and the South East (30 per cent). There were significant falls in the East Midlands and the North West, dropping ten and 12 points respectively to 14 and 19 per cent where sentiment levels were the lowest in the UK. Confidence also fell in the North East from the last survey’s highs but remained the same as the UK average.

Business sentiment also improved slightly, but remained below the UK average, in Wales, Northern Ireland and Scotland.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking said: “Encouragingly, UK exporters expect to increase their overseas activity in the next six months, with the strongest demand anticipated to be from the US, Europe and the Middle East. External demand is being supported by the past depreciation of the pound and robust global demand, notwithstanding increased trade tensions.

“The share of firms finding it difficult to hire the right skills continues with London and the West Midlands finding it the hardest to recruit. This, along with strong global demand, is encouraging firms to maintain their investment levels. Overall, the resilient survey readings provide reassurance around the case for a further rise in interest rates, potentially as soon as the next meeting in August.”

Barclays launches £100,000 unsecured lending, as new research shows the value of faster finance to SMEs

Barclays has launched £100,000 unsecured lending – doubling its maximum for unsecured business loans for small and medium-sized enterprises (SMEs) from £50,000 to £100,000.

The bank has also identified more than 40,000 SME clients, from dentists to manufacturers, that could be eligible for the higher levels of lending, which because it is unsecured could be in their accounts within days.

The move will help SMEs get faster access to finance and seize opportunities they might otherwise miss out on if lending decisions are not made quickly enough. It also means business owners will not have to use their business premises or home as security.
The expansion of unsecured lending adds to Barclays’ already class-leading unsecured lending offering, whereby 250,000 Barclays SME clients can see pre-assessed lending limits of up to £25,000 via mobile and online banking, which they can apply for digitally, often receiving the cash that day. It is more than 40,000 of these businesses that have been identified as eligible to apply for up to £100,000.

New research today also highlights the importance of access to finance. Barclays’ survey of more than 1,100 SME business owners shows just how vital speed is in today’s environment, with almost one in five (18%) of those surveyed that have used a bank loan (and 9% overall) saying they have lost out in the past because they could not get a loan or funding fast enough.

The research also found that over one in ten (11%) of surveyed business owners said they’d be more likely to apply for a loan if they could get a decision within 24 hours, while 16% of those that have used a bank loan (and 9% overall) said the time it takes to get a loan puts them off applying.

The respondents were also hesitant to offer their home as security, with almost half (47%) saying they would be deterred from taking a substantial loan out against their home, and nearly one in three (31%) saying they would rather pay a slightly higher interest rate than have to use their home as security.

Unsecured lending differs from lending where the loan is secured against assets such as a business premises or the owner’s home. It is far faster for firms as it does not require land or property valuations and other steps that slow the process down. Applicants for Barclays unsecured lending will typically be able to get a decision within 24 hours, and have the money in their account within five working days.

The additional lending could not just help individual companies, but also boost the wider economy. For example, nearly a quarter (23%) of business owners surveyed said that if they were given a £100,000 loan, they would hire more staff.

Ian Rand, Chief Executive of Barclays Business Banking, says: “Many people think taking a business loan is stressful, or are put off by the perceived bureaucracy and time involved. At Barclays, we are tackling this head-on, making small business lending faster, simpler and easier.

“Importantly, a business loan is a type of finance that can really transform a brilliant, hard-working company, allowing it to scale up and serve more people. Removing barriers to such investment is good for firms across the country, and for the economy.

“Furthermore, speed of access to finance can be vital in today’s environment. Business moves very fast, and firms can access larger opportunities at short notice thanks to digital communication.

“Unsecured lending can also be particularly useful for certain types of business. This includes nimble firms that achieve high growth rates without owning premises that would serve as security for a loan, or those led by young entrepreneurs who have a successful business but are yet to buy a home that could serve as security.”

Both the pre-assessed lending up to £25,000 and the expansion of unsecured lending can make taking a business loan easier – an important benefit for business owners. In the survey, more than one in ten respondents overall (13%), and approximately a quarter (24%) that have used a bank loan, said applying for a business loan is more stressful than getting married or buying a home.

In addition, Barclays is increasing the maximum unsecured overdraft for business lending from £25,000 to £50,000, helping firms take on larger projects or deal with unexpected increases in business, for example.

When Barclays asked SME business owners coverage what they would do with £100,000 of business lending, the top five answers were:
Purchase new equipment or machinery: 34%
Improve or increase branding/marketing: 32%
Diversify the business (e.g. open in a new market; add a product/service): 31%
Hire more staff: 23%
Get new premises :14%

Funding line helps recruitment firm reach hire ground

Bibby Financial Services (BFS) has provided a £1.4 million Recruitment Finance funding line to Pearson Anderson, an ambitious healthcare recruitment company. The funding line includes Bad Debt Protection and payroll services, which will help the business manage contracts and finances more efficiently and effectively.

Based in Leicester and founded in 2009, recruitment firm, Pearson Anderson, is managed by CEO Amit Kainth. With specialist experience in the sector, Pearson Anderson has grown significantly and is now one of the leading healthcare recruitment agencies in the UK. The business prides itself on having experienced consultants that know the industry inside out, and for having an international network of recruiters to source from a wider pool of potential candidates for UK based roles.

Pearson Anderson needed support in payroll management so looked to Bibby Financial Services (BFS) to structure a Recruitment Finance and Bad Debt Protection funding package. The structured funding line ensured that payroll is effectively managed by a designated BFS back office support team and the business was supported in the event of debtor non-payment as a result of protracted debt or insolvency.

This arrangement allows Pearson Anderson to free up time to prioritise growth and concentrate on offering services to new clients.

Amit Kainth, CEO at Pearson Anderson Ltd, said: “In order for us to expand our services, we recognised that we needed to prioritise our efforts to drive growth over the next few years. To free up new time for us to focus on this, we needed additional support in back office functions such as payroll management and daily administration.”

“The experience and knowledge of those at BFS really stood out to us. The Recruitment Finance team was able to provide us with an offering that worked in-line with the operations of our business, and that was crucial when making our decision to choose them as our financial partner.”

Speaking on recent changes to immigration rules, Kainth added: “The Government’s recent decision to relax the visa rules for doctors and nurses could be very beneficial for our business as the NHS is a key part of the UK economy which desperately needs talent. Our network of recruiters across Europe are well placed to help find the talent the UK needs.”

Paul Fraser, UK Sales Director, Specialist, Bibby Financial Services commented: “Pearson Anderson is a market-leading healthcare recruitment agency that has experienced substantial levels of growth since its incorporation.

“Our team has worked closely with Amit and his team to structure a Recruitment Finance offer that suited their business, allowing the company to pay suppliers and staff, and to concentrate on the areas in which they wish to develop over the coming years.

“This, alongside back-office administration and payroll support, will allow Pearson Anderson to grow and prosper, and maintain their reputation as a market leading recruiter.”
Susan Farmer, Head of Recruitment Finance, Bibby Financial Services added: “For the first six months of this year we have seen strong performance in the recruitment industry, amidst a challenging environment. The UK continues to have record low levels of unemployment, while the demand for high level talent is ever increasing due to the difficulties that Brexit is causing.

“Businesses like Pearson Anderson are often reliant on overseas talent to fill a large number of vacancies. A challenge that not only the healthcare industry is struggling with, as the UK continues to hit the Tier 2 Visa cap.”

BFS makes £220m available to UK SMEs in first half of 2018

Independent financial services provider Bibby Financial Services (BFS) has recorded a strong first half of the year, structuring 750 new funding agreements for SMEs and further growing its market share.

In the six months leading to July, BFS made £220m in funding available to UK businesses.

Results reflect an 18 per cent increase in deal numbers, year-on-year. BFS has seen Construction Finance deals increase by 71 per cent and Export Finance numbers increase by 32 per cent, in addition to growth across its Trade Finance, Commercial and Corporate divisions.

Speaking of the results, BFS UK CEO, Edward Winterton said: “In what remains a relatively flat market, we have had a tremendously strong first half of the year and we are seeing new applications for funding increasing significantly.

“We have seen growth in client numbers across the board and have achieved significant growth across our Trade, Export and Construction Finance businesses.

“Undoubtedly, our strengthened product portfolio, which now includes ABL, Stock Finance and Foreign Exchange, has helped us to uncover more opportunities to support businesses both big and small.

“Furthermore, we have had great success in combining our Invoice Finance solutions and FX services for businesses looking to protect margins and grow in international markets.”

Coinciding with the latest UK Finance statistics showing overall industry advances up four per cent, BFS now writes one in five of all invoice finance deals throughout the UK.

Edward Winterton continued: “It is fantastic that we are continuing to grow our market share, but more importantly these results reflect vital support for UK SMEs at a time of much uncertainty throughout the economy.
“Our performance is testament to the hard work and commitment of our teams across the UK, and demonstrates the benefit of our client-centric approach to supporting SMEs.”

Bibby Financial Services strengthen regional presence with new Yorkshire appointment

Bibby Financial Services (BFS) has appointed Lauren Maloney as a Business Development Manager (BDM) as it looks to create new business opportunities and support small and medium-sized businesses in the South Yorkshire region.

Joining BFS with 11 years’ experience in the financial services sector, Lauren has held a range of senior positions specialising in cashflow finance throughout Yorkshire.

Most recently, she worked as a BDM for Pay4, but has also held roles as a Relationship Manager at Santander and within the RBS Group, where she won Private Banking Advisor of the year in Natwest Private Banking for three years running.

Lauren will be based at BFS’s Yorkshire office in Bradford alongside 30 other employees and joins a team of four BDMs. Her appointment comes as BFS aims to boost its presence in South Yorkshire.

In her new role, Lauren will primarily focus on securing new business opportunities for BFS, with a particular focus on Sheffield and Doncaster, putting to use her extensive expertise in commercial banking and asset finance.

Speaking of her appointment, Lauren said: “BFS is the UK’s leading independent invoice financier as well as a global financial services provider. It has an excellent local support network in South Yorkshire, from small businesses to brokers.

“I’m excited to join a dynamic team of experienced individuals and play a pivotal part in supporting SMEs with tailored funding packages for growth.”

Mike Day, Head of Sales for BFS, added: “We are delighted to welcome Lauren to the team. She brings with her a wealth of experience, which will help us as we seek to fund and support more SMEs in the region.”

Henry Howard Finance announces senior appointments

Henry Howard Finance Group has appointed joint heads of sales support as the independent funder’s growth continues apace.

Nicola Evans, who joined the Newport-based firm as a business analyst in May last year, has become the head of sales support. Nicola shares the role with her former GE Capital colleague, Jane Brown, who has worked in asset finance and sales aid leasing for nearly three decades.

Henry Howard Finance prides itself on its flexible working patterns, enabling working parents to share roles within the company. As the business’ success continues, the duo will combine their skills to bolster staff coaching and training, support the sales team and enhance the services offered to existing and new customers.

Ms Evans, who has 12 years of experience in the finance sector, said their ultimate aim is to “continue to make things flow smoothly for customers”.

Ms Brown added: “We have been reviewing how our teams are structured to support clients and ensure our customer service runs as efficiently as possible. We are also in touch with our customers for feedback to ensure we address anything they feel could be improved or simplified.”

Henry Howard Finance specialises in flexible and responsive finance solutions, assisting nearly 30,000 different UK-based businesses across a variety of sectors.

Commenting on the new appointments, Mark Catton, group chief executive of Henry Howard Finance, said: “We are also committed to upholding the high standards that have put us in this enviable, successful position. These new posts reflect that commitment. I have no doubt our new team members will have a positive impact on our customers’ experience.”