Peter Ewen, Managing Director of Venture Finance, highlights why the Invoice and Asset Based Lending Industry should capitalise on their ability to deliver service excellence.

Very few companies in the UK today can say they got through the last 18 months completely unscathed. The credit crunch impacted heavily on the flow of finance to firms at a time when they needed it most, and battle-weary businesses are entering this new financial era with a changed perspective on their lending requirements. Today businesses are seeking to make the relationship they have with their financier top priority.

The Invoice and Asset Based Lending Industry is perfectly positioned to help UK businesses navigate this new economic landscape with confidence. Now more than ever, our industry’s aptitude for stabilising and supporting a business’ financial resources matches the shifting priorities and attitudes of Britain’s recovering businesses. Times are changing, and service strength has far higher precedence over cost as we approach the new challenge of recovery ahead.

This argument encapsulates a key conclusion of a recent high-level industry think tank hosted by Venture. It pegged service excellence as a defining character trait, setting Invoice and Asset Based Lenders apart from other mainstream business finance providers.  Over the last two decades the industry has developed a strong, relationship-based approach which has remained consistent throughout the recession. It is increasingly bridging the lending gap created by a loss of liquidity and confidence with traditional financiers.

The think tank, designed to examine opportunities for the industry in this radically changed lending landscape, brought together representatives from the Asset Based Finance Association, KPMG, the Federation of Small Businesses and the South East England Development Agency. The discussion stemmed from widespread recognition of a need for consensus on the sector’s trading future.

No longer seen as “alternative finance”, Invoice and Asset Based Lending has earned its place as a mainstream funding option by taking the time to understand individual business needs, instilling good, common-sense business habits and working in partnership with companies for a sustainable future.

Throughout the recession, businesses complained of a lack of cash. Yet, the Invoice and Asset Based Lending Industry has remained focussed in our value-add approach, and has proven to be a constant source of service-led funding.

Industry role models

The think tank and its resultant white paper, ‘The Evolution of Invoice and Asset Based Lending’, explains how the industry leads the field in the provision of service excellence – but unfortunately continues to be the financial world’s best-kept secret.

Invoice and Asset Based Lenders are, by their very nature, far closer to their clients than other financiers, which means an immediate view of fast changing business challenges is provided. Regionally-based Relationship Managers can often pre-empt potential challenges or opportunities and work with the client towards a swift solution.

The think tank concluded that greater emphasis should be placed on this ability to deliver a high standard of service and I call upon my peers to capitalise on our industry’s strengths and push this message. As a key sector USP, maintaining a focus on service excellence will help Invoice and Asset Based Lenders confidently navigate clients to a return to post-recession growth.

As we move into recovery, many businesses are finding that traditional methods of funding, like overdrafts, are no longer appropriate. Banks’ margins have been progressively reduced to the point where the balance has shifted from the traditional relationship model to a much more automated, “one size fits all” approach. Whilst this has led to a low cost delivery, it has not helped to strengthen client relationships.

The nation as a whole is entering an uncertain period of recuperation, and the outlook of British businesses will be wildly different from the previous approach which saw many cheap but snap lending decisions. Reliable delivery of responsive finance will be of paramount importance and as always our Industry is well equipped to take this challenge face on.

Peter Ewen, Managing Director of Venture Finance