The SMEs surveyed said that greater clarity from the Bank of England about when it intends to increase base rates would encourage them to borrow to invest in their businesses.

Philip White, Chief Executive of Syscap commented: “Reading between the lines of the latest Bank of England MPC meeting minutes is more than dinner party chit-chat for SMEs – it has a fundamental impact on how they run their business.”

“Businesses hate uncertainty as much as the markets do, and some comfort on base rate stability would allow them to make crucial decisions about future investments and how they can best be funded.”

“SMEs want the Bank of England to follow the US’s lead in committing to base rate stability over a fixed period. They see it as a simple measure that would help them to help themselves.”

Two thirds of SMEs would support a VAT cut

A VAT cut would also be popular with SMEs, with 66% of those surveyed saying that they thought the Government should cut VAT to help the economic recovery.

Philip White added: “Business and consumer spending has been massively squeezed. Small businesses are suffering disproportionately because they lack negotiating power with their suppliers to reduce their own costs, and cannot eat into already wafer thin margins to lure customers through price cuts.”

“By easing the pressure on household and business budgets, a VAT cut would free up additional business and consumer spending and could help avoid a double dip recession.”

A massive 97% of SMEs say that the Government still needs to do more to ensure that bank funding is steered towards SMEs.

Earlier this year, the Chancellor initiated Project Merlin – an agreement between the government and the UK’s four biggest banks to lend more money in 2011, especially to small businesses. However, according to Bank of England figures published in July, lending to small and medium sized businesses fell more than £2bn short of targets set as part of the Project Merlin deal.

Article Contributed by Syscap

Online directory Bridgingloandirectory.co.uk is aimed at IFAs, mortgage brokers and lenders that are serious about securing fast and effective solutions for short term finance.

The site offers a comprehensive list of key companies specialising in bridging loans and interim commercial finance for a multitude of purposes – from property development to buying a new house or paying an unexpected tax bill – so that intermediaries can select bespoke solutions for their customers.

Tony Sanchez, founder of the Bridging Loan Directory, part of the Clara Capital group, said: “A mainstream bank may take some months to put together a loan for a borrower, whereas an experienced bridging finance company should be able to advance a loan within a couple of days.

“In the current climate, demand for bridging and commercial finance continues to grow and so the Bridging Loan Directory is keen to offer brokers and intermediaries access to some of the most trusted and reliable providers in the marketplace today.”

Well-known companies featured on the ‘yellow pages style’ directory website include London-based Borro whose introducer programme allows IFAs, mortgage brokers, accountants, solicitors, lawyers, wealth managers and tax advisors to offer short term loans of £1,000 to £1,000,000.  All loans are non-status and secured against jewellery, luxury watches, gold, fine art, antiques, luxury cars, yachts, speedboats and other high value assets.

Approval in Principle (AIP) is provided in minutes and cash is advanced within 24 hours. There are no credit checks or extension, redemption, expiry or penalty fees for clients.

Bridgebank Capital – one of the UK’s leading property finance lenders in the area of Bridging and Short Term property – is another directory entry, specialising in residential and commercial property transactions.

Laurence Goodman, MD at Bridgebank Capital, of Manchester, said: “We provide property funding when it is needed the most and this can often be arranged in just seven working days.

“The Bridging Loan Directory is the who’s who of the finance world because it brings together the industry’s most notable companies in one place – making life easier for advisers and intermediaries.”

Mr Sanchez added: “Bridgers and commercial financers are fulfilling a real need in today’s economic environment, where appetite to lend amongst the mainstream community is still low.

“While a bridging loan is advanced to a borrower in a much shorter time-frame than a traditional bank loan, most bridging finance companies will still carry out the same level of checks on the transaction as a bank, including obtaining an independent valuation on the property, and conducting due diligence on the borrower’s circumstances.

“Bridgingloandirectory.co.uk is a quick and simple tool to assist providers in finding the right financial products for their clients – with instant decisions and direct access to funds.”

Contributed by Tony Sanchez – Director, Clara Capital

A new study reveals that more than three-quarters of a million people have unwittingly signed up for a ‘free credit report’, only to discover they are being charged a monthly fee once the money is taken from their bank account.

More than a quarter (27%) say they were attracted to these deals in the first place because they thought they were ‘free’.

Britons are calling for an end to this practice, with nearly three-quarters (73%) believing that in the credit report market, ‘free should mean free.’

The online study was commissioned by credit reference agency Callcredit to mark the launch of a new service, Noddle, which plans to give over 40 million Britons free access to their full monthly credit report for life.

It reveals that, despite being signed up for an average of four months, nearly a quarter of subscribers (22%) only look at their credit report once – netting millions for the industry.

One in five struggle to unsubscribe from these deals, with the majority (59%) unable to find details on how to cancel monthly payments on the company’s site and a third (32%) encountering unhelpful customer services handlers when attempting to unsubscribe themselves.  One in ten (8%) find it so difficult to unlock themselves from these deals that they give up trying.

Noddle will also partner with innovative analytics company HD Decisions, and a leading price comparison site, to help people use their credit rating to search out a shortlist of money saving deals on financial products they are most likely to qualify for. This will help consumers as it reduces potentially embarrassing declines for lending and will help lenders as it increases the chance of them only receiving applications that meet their lending criteria.

Delroy Corinaldi, Director External Affairs, Consumer Credit Counselling Service said: “Helping consumers to help themselves is flavour of the month at the moment, but the launch of Noddle offers a practical way for consumers to keep on top of their credit rating and to identify the best value credit products for their circumstances. Choice is good, informed choice is better.”

Commenting on the launch of Noddle, Tom Ilube, Managing Director of Callcredit Consumer Markets said: “A credit report is like your financial passport.  Companies look at your credit report all the time and make decisions about you based on this information, from approving a mortgage application to giving you a mobile phone contract.  We believe consumers need to get into the habit of doing the same and think it’s only right they have ready access to the personal information these important decisions are based on.

“We want to make sure every adult in the UK has free access to their personal credit report whenever they want it.”

Noddle is being trialled with 10,000 consumers and will be publicly launched in the Autumn.

To pre-register for the service or to find out more information visit http://www.noddle.co.uk/

The net wealth of the UK declined 1.4 per cent to £6,669 billion last year, according to official figures. It was a lesser drop than the year before, when the country’s wealth fell 4.3 per cent, but what is more interesting is how that wealth is made up.

The majority of it, 61 per cent, is residential housing. That makes it immediately obvious how vulnerable the UK is to a fall in property valuations, which are sustained largely by the ability of households to borrow money.
 
Since 2007, some £265 billion has been wiped off the value of houses, and prices have just started to fall again.

Civil engineering works – roads, bridges and so forth – weigh in as the second biggest asset on the UK’s balance sheet. They’re worth £725 billion, more than a tenth of the UK’s net wealth and more valuable than our entire portfolio of intangible assets (software, patents, artistic works). So much for the knowledge economy.

Slice the data another way and other weaknesses of the UK’s economy are laid bare. Households are worth some £7,244 billion, more than the entire net wealth of the country. That is possible because other sectors are in the red: notably central government (worth a negative £395 billion) and financial corporations (minus £390 billion). Private, non-financial corporations knock another £323 billion off the UK’s worth, largely thanks to the liabilities of a handful of massive companies.

Despite the dips over the last two years, the UK has seen growth of 53 per cent in its net wealth since 2001. But more than three-quarters of that (76 per cent) is due to the residential property boom, which no-one now expects to be repeated any time soon.

All in all, these figures paint a picture of a country that is like a grand old stately home which has been remortgaged by its impecunious owners: outwardly impressive but hard to maintain in a decent state of repair.

It may be that in future some international equivalent of the National Trust will step in to preserve the UK as a historic curiosity, converting the Isle of Wight into an oversized gift shop. In the meantime, the new government must do all it can to encourage investment in businesses, not in bricks and mortar.

Article contributed by Nick Britton, Growth Business

Image copyright: Flickr

The accountancy and recovery specialist said HMRC has employed tougher measures on tax avoidance since April 2005, when HM Customs & Excise and the Inland Revenue merged.

Hacker Young added that in the first 12 months of its existence, during the course of 2005 and 2006, HMRC generated £7.4bn through its tax enquiries and other compliance work, but this jumped 64 per cent to £12.1bn in the most recent year, to March 31 2009.

Hacker Young added that since coming into existence, HMRC has sought tougher and more intrusive powers, such as the power to make arrests, enter business premises unannounced and to demand confidential information on taxpayers from third parties.

The firm claimed that the steep rise in extra tax acquired through compliance investigations is also partly a reflection of the increasing number of mistakes being made by taxpayers as the tax system grows ever more complicated.

Roy Maugham, tax partner at UHY Hacker Young, said: “The amount of money that HMRC is taking in through compliance work is huge but this hasnt come without significant costs to innocent taxpayers.

“Since HMRCs formation the Inland Revenue side of the department has been lobbying to gain the draconian powers that Customs has to deal with the threat of drug smugglers and arms dealers.”

Maugham believes the result is that HMRC now has sweeping powers to enter business premises to conduct a search without warning beforehand and to make arrests without the need to be accompanied by a police officer.

He added: “HMRC is also using increasingly controversial methods to tackle tax evasion. Purchasing offshore bank account details that have been stolen by criminals, for example, now seems a perfectly legitimate tactic to HMRC.

“With the current state of the public finances, HMRCs aggressive stance on tax investigation work is likely to become ever tougher.”

Reproduced with kind permission of Credit Today  http://www.credittoday.co.uk

Now, three months from opening its doors for the first time, Wellworths has served its 100,000th customer.

Set up by former Woolworth’s shop manager Claire Robertson, 34, the new store has defied the recession.

Robertson’s initiative gave 21 colleagues their jobs back and she has since hired a buyer for the store.

The branch – in Dorchester, Dorset – was one of 815 that closed after Woolworths went into administration last November with debts of £385 million.

Robertson, said: “To be here in this economic climate is an achievement in itself, but to be doing so well has exceeded our expectations.

“I couldn’t have got this far without the great support and help of my team, who are listening and acting on suggestions from customers.”

She added: “People are still coming from all over the country to visit the store because it was a good news story at the time and people had an affinity to Woolworths.

“People come here and tell us they are buying things to support Wellies. People have been inspired by the story, those who have lost their jobs and want to do something about it.”

Robertsonworked for Woolworths for 18 years, starting out as a Saturday girl in Yeovil, Somerset and managing the Dorchester store for the past five years.

She gained the financial backing of a consortium led by the Ireland-based owner of the premises.

The familiar red and white Woolworths sign was replaced by a blue, white and orange Wellworths motif.

Like its predecessor, the store has pick-n-mix, but has abandoned children’s clothing.

Instead it has new lines, including a craft and pet section, with a stronger focus on products by local firms including one that makes wooden toys.

This is a move that will see it gearing up to take on Scottish rivals in the corporate banking market.

The plans to step up the pressure on the established Scottish banks was revealed yesterday by the newly appointed Scotland chief executive of Britain’s biggest bank.

Speaking on the day of his appointment, John Rendall revealed HSBC’s strategy to further expand its business banking team. He also promised to open additional retail branches north of the Border.

Rendall disclosed that HSBC had already increased corporate lending north of the Border by 46 per cent in the four months to the end of April, compared with the same period in 2008. Loan value grew to £744 million in the period, while revenue generated from the division rocketed by 80 per cent.

HSBC has previously flagged its independent status – it has not been forced to turn to the government for financial help – as attractive to companies looking for loans.

Although it has not specified which institutions are its targets it is clear it has Royal Bank of Scotland and Bank of Scotland – previously the major players in the Scottish market – in its sights.

HSBC has already invested in its corporate activity in Scotland. Last year it opened a new north of Scotland commercial centre in Aberdeen and Inverness and established a new leveraged finance team in Aberdeen.

Scots-born Rendall, who is to take on the new role after a two-year stint as chief operating officer in Mexico, told The Scotsman: “We are very pleased with how the parts of our business have been developing in Scotland over the past few years, especially in the corporate banking sector. We have got bigger plans for Scotland – you might call them ambitious plans.”

Rendall, who grew up on Orkney and studied at St Andrews University, has worked at HSBC for 22 years.

Although he said it was “too early” to give full details of the bank’s planned expansion, he revealed that it was likely to focus on developing corporate banking as well as targeting potential international personal banking customers living in Scotland.

He said HSBC was set to open new branches in Scotland, but was reluctant to give an indication of how many or where they would be located. However, he said the bank – which has six branches north of the Border in Edinburgh, Glasgow, Aberdeen, Inverness and Perth and employs 3,000 staff in Scotland – was not looking to challenge the likes of Bank of Scotland, now part of Lloyds Banking Group, on the Scottish high street.

He said: “We will be making investments in branches, but we are not looking to spend the next ten years opening tens of hundreds of branches.”

In the new management structure, Irene Grant will remain as Scottish head of commercial and corporate banking.

The bank recently reported strong first-quarter results, following a successful £12.5 billion rights issue earlier this year.

Article by Jane Bradley for The Scotsman

Research commissioned by premier Invoice and Asset Based Lender (ABL), Venture Finance, has revealed that the number of business clients being refused finance by traditional lenders this year has almost tripled.

The study of 1000 UK accountants has found the credit restrictions driving that escalation is in turn stimulating renewed interest in alternative forms of funding solutions such as ABL.

Venture’s previous research in 2008 showed less than a fifth of accountants’ clients had been refused credit from traditional sources such as banks. However, in just 12 months, spurred by current recessive conditions this figure has rocketed to nearly two thirds (58 per cent).

The study charts the continued growth of ABL since 2007 and supports the Asset Based Finance Association (ABFA) 2008 survey, which found that 64 per cent of the financial industry saw ABL as a ‘mature product, having proven its worth in the market’.  The service is now second only to Venture Capital investment as other forms of funding have dried up or fallen victim to their own recessive contraction (such as bank loans or family hand-outs).

Other key findings from the research include:

• Businesses in the North East are suffering the most with a reported 73 per cent of accountants’ clients having been refused credit this year, compared to 48 per cent in the South East
• Amongst the accountants surveyed, the recruitment industry (24 per cent) is seen to be suffering the most from financial difficulty, followed by construction/property (23 per cent). Retail services are perceived to be the most stable
• Seventy-one per cent of accountants have seen an increase in clients suffering with bad debt, with over two thirds (70 per cent), believing services such as Bad Debt Protection are more important for business today than a year ago

Peter Ewen, Managing Director, Venture Finance, comments: “Our research lifts the lid on the state of British business in these challenging times. The significant rise in companies suffering bad debt, combined with restricted access to finance, has encouraged others to take out Bad Debt Protection for peace of mind.

“But it’s not all doom and gloom – whilst the rise in credit refusal by traditional lenders may suggest the business world has come to a complete halt, of course it hasn’t – business owners are just getting smarter and proactively reviewing their options.  As the UK economic slowdown continues,  it’s reassuring to see that nearly two thirds of business owners are responding proactively by seeking robust and responsive alternative sources of funding like Invoice and Asset Based Lending – however it surprises me the Government isn’t doing more to highlight this option to businesses both big and small.”

Peter Ewen – Managing Director, Venture Finance

Venture Finance – A premier independent Invoice Finance and Asset Based Lender with 20 years’ experience helping thousands of businesses.

Richard Pepler, Chief Executive, Ultimate Finance believes that, before examining the different and quite distinct role played by the factor, there is an important distinction to be drawn between the respective responsibilities of banker and factor.

“Both the banker and the factor have first to produce a satisfactory return on their shareholders’ funds but, after this requirement, I believe the priorities part company. The banker has to meet his depositors’ withdrawals on demand because part of this function is to take deposits from the public – an overriding requirement which does not exist for the factor. As yet, factors do not seek or take deposits from the public and are not faced with this responsibility.

The factor is thus better placed to accept more risk and we are at least, to some extent, employed for that specific purpose. Secondly the banker is not equipped with the resources nor does he have the time to monitor the changing quality of the receivables he is called upon to fund. For this reason alone, having regard to his first duties, he should be relatively conservative.

It is through providing these services (as distinct from the mere provision of finance or working capital) that the factor earns himself fee income to sustain his business. He has established a team of specialists backed by a veritable library of credit information and the most sophisticated information technology. For example, his client three hundred miles away can already view his ledger via the Internet within the time it takes to make a telephone call, and the factoring industry is up with, if not in some cases actually ahead of, big brother in the information technology race.

THE NATURAL ROLE OF THE FACTOR

Before we examine the end products of benefits of the various services, let us look at the factor’s natural niche in the market place. Rapidly growing successful businesses often start from a low capital base and the entrepreneurial proprietor prefers to own the whole equity of his business rather than share the fruits of his labours with even the most benign of sleeping partners. He ploughs back all his profits into the business and calls on his friendly bank manager to obtain an overdraft to meet his working capital needs. The bank manager will appreciate a well presented case and the customer who presents his budget, cash flow and audited accounts will probably leave the meeting satisfied that he has made adequate arrangements.

Imagine now his business grows still faster and further. Not only must he carry greater stocks to meet increasing demand but he also has to extend a greater volume of credit – not necessarily in time but certainly in quantity, to a growing bank of satisfied customers. So his asset base expands quicker than his capital base and he needs a bigger overdraft or he embarks on the dangerous course of extending his trade creditors and delaying his tax settlements.

On returning to the bank he is perhaps told that he is overtrading and is advised to pull in his horns. The situation is becoming progressively overheated and the bank manager having regard to his other obligations may be obliged to decline increasing the overdraft facility to the extent requested.

FACTOR v BANKER: A QUESTION OF “CUSTOMER SATISFACTION”

This is precisely where we find the factor’s niche in the market place. The banker has the “customer satisfaction” problem of being unable prudently to meet his customer’s requirements while the customer cannot maintain his satisfactory progress because his own capital resources have not expanded at the same rate as his business. The factor solves both problems, to the comfort of both parties.

Having examined the book debts and satisfied himself that they are of reasonable quality, the factor prices his services and quotes a factoring charge of, say 1.5% of turnover – a sum significantly less than the trade settlement discount the client frequently offers his customers just to pay on time, and incidentally, a sum less than the stockbroker charges to deal in modest parcels of shares on the stock market. For this fee he will render statements to regularly overdue accounts, deal with queries and disputes, and collect in the money, usually about a week quicker than his client did.

But in addition to that, he also offers access to immediate cash up to perhaps 85% of the value of the debts purchased for which extra facility the charge is much the same as the cost of a bank overdraft.

Thus the very first impact of factoring is to reduce the debtors on the balance sheet at a stroke. The client uses, or should use, the money first to reduce trade creditors, seeking at the same time to obtain discounts from them for prompt settlement. This will pay for some, if not all, factoring costs.

Next he can reduce the overdraft if that is what the bank manager requires. At the very least, he will not have to go supplicating at the door of the man he used to call his friend. His continuity of supply of raw materials will be strengthened by his improved conduct of his bought ledger and his own credit standing will increase in the eyes of his creditors.

Of course these benefits will not accrue if he puts the factoring monies into a new factory or buying another business or buying himself a smart car because these expenditures are a gross misuse of factoring funds. It has to be admitted that some people do misuse funds and they run the risk of failure if they do.

ELIMIMATING THE RISK OF BUSINESS FAILURES

Pareto’s law seems to afflict most businesses where 20% of the customers take 80% of the sales and 80% take only 20% of the sales. In the small to medium size business, with limited or stretched capital resources, the unexpected failure of a major customer can spell termination to all the hard endeavour put into building a business and is thus a contributory cause to the unemployment problem.

The commercial view taken by factors of the credit risk eliminates this hazard, often underestimated by entrepreneurs flying on a wing and a prayer. The record number of business failures in the last year or so has, however, brought this hazard home to the market place and the value of bad debt protection being utilised alongside the factoring facility is increasingly appreciated. Indeed with the two facilities running in parallel the clients can now sleep at night.

The benefits do not end here. The factor produces from his system regular statistics on sales, debtor ageing, speed of debt turn incidence of credit notes, cash availability and almost any other information his client requires. Both parties obtain a much better overall perception of the state of the business. The client can see how well or badly the collection job is being done and the factor can see how his client’s business is changing from month to month. This acts as an effective discipline on both factor and client and if adverse trends are not rapidly corrected, then either party can set up a meeting with the other at very short notice. Serious disagreement may lead to mutual termination of the contract at the worst but, far more commonly, realism and reason prevail in the light of the accurate facts displayed and openly discussed.

Thus the factor has reduced and, in some instances, altogether eliminated some of the critical issues facing his client. He need not fail just because of a disproportionately large bad debt, he need not fail because his supply is interrupted by slow payments to his creditors, he need not fail because his overworked staff do a poor job on getting the money from slow paying customers and, more positively, he is enabled to continue his successful growth without sacrificing part of his equity.

Some businesses still fail after factoring because they have allowed overheads to get out of control, or they overstocked, or their quality declined and they lost market, but the factor lays no claim to being able to control these other hazards.

We do claim that the resultant benefits of factoring significantly reduce the totality of business hazards, making the factored business more soundly based, better disciplined more visible to management and finally an altogether better risk proposition.

A NEW RELATIONSHIP BETWEEN THE CLIENT AND HIS BANKER

The client who is factoring thus becomes a better business proposition in the eyes of our now more receptive again banker and relationships improve. Indeed overdraft lending is safer because the sources of its repayments and sales proceeds, are professionally managed and monitored on a day to day basis and in a spirit of enlightened co-operation.

And what about objections?

Most common from the client is “what will my customer think?” coupled with “will my customer be upset by the factor’s collection methods?” If factors were in the business of upsetting their client’s customers they would quickly have no business left themselves. The growth of factoring itself answers this question and it has grown through satisfying a real market need.

The bank manager’s principal objection is that the factor has “taken away” the debtors which he regarded as the principal security for the overdraft. Therefore he must reduce his lending and hence his income and profit. Factors may have been a little slow to grapple with this one, thinking that, since they have to obtain their funds from the bank anyway, the same resultant profit ends up with shareholders – so what?

With the decentralisation of profit centres in the banking system, the fact that one branch’s loss is another branch’s gain is not an altogether satisfactory answer, particularly from the point of view of the losing branch. The problem once clearly perceived, can be solved be recompensing the losing branch in whatever way is considered most appropriate. Thus the manager who has spent time on his customer’s problems can now offer a solution which no longer conflicts with his own interests.

Indeed there is no reason why we cannot create a tripartite agreement between customer, banker and factor whereby the total financial requirement is worked out and then apportioned so much on overdraft and the balance from the factor. The necessary controls and constantly updated information are readily available. Lastly, the availability of ready cash from the factor is geared, not to a finite sum which has to be renegotiated, but to the sales volume generated. Thus it can be used as a more flexible tool to meet the needs to the growing company.

REAL AND NECESSARY SYNERGY BETWEEN BANKERS AND FACTORS

Meanwhile the factors continue to study the ever changing patterns of customer requirements. As information technology becomes cheaper and faster and more widely deployed, so more companies will adapt its use to their requirements, thus assisting the factor in its initial appraisal of the business. It also creates yet further opportunities for the factoring industry through diversifying its products to meet the changing market needs.

The factor himself, like the business he serves, wishes to grow and no one who is aware of his existence beats a path to his door? How does the factor market his admirable wares? He is not seeking millions of customers and his advertising spend is, of economic necessity, small by comparison with many other important businesses.

Interestingly, factors receive many of their enquiries from the banks. It is generally of good quality and the conversion ratio is high. In return, it is very usual for many factors to refer clients back to the banks as new customers.

Thus we see the completion of the synergy circle. The factoring service benefits the customer, the banker has a stronger customer better enabled to grow and the factor has another client. By combining these attributes we reduce the risks inherent in all business transactions. We expect to see both more successes and fewer failures and this in turn will both mitigate the unemployment problem and increase the profits of each party to the partnership.

Contributed by Richard Pepler, Chief Executive at Ultimate Finance Group PLC

Tel: 0845 251 3030

Website:www.ultimatefinance.co.uk

The UK broker market, having developed in part to fill the void left by the decline of branch-based bank sales, relies for the most part on local connections and regional expertise to thrive.

To an expert in placing CCTV deals in Cornwall, for example, the thought of closing a vendor deal in the Tyrol with an Austrian funder, or placing a Bulgarian lease with a Greek bank, might seem patently insane.

But as the lights go out one by one at the broker desks of the blue chips, perhaps there is an opportunity for some British introducers to look across the sea to source and place business.

This does not necessarily mean entering into the potential nightmare world of cross border leasing – in the vendor world, for example, there are many suppliers operating across the continent with large revenues, but with small enough in-country volumes to have slipped under the radar of De Lage Landen, Raiffeisen, UniCredit and the like.

When properly approached and vetted by a broker, however, these suppliers are often snapped up by the big networks. Also, in addition to vendor programmes, the generally lower concentration of brokers to funders in Europe (particularly in newer markets), means less competition to place individual deals with lenders.

Oak Leasing, known for finding deals on the mainland (and indeed as far away as Tahiti), has found its highly-visited website to bring in a lot of Euro business from asset finance virgins looking for a solid funder.

Meanwhile, Netherlands broker veteran Frans Jansen of Leasing Services has found success in the past through working as a source of local knowledge, for English firms looking to split commission on placing a European deal.

By teaming up with a European broker in this way – especially one with a good spread of contacts among international network heads – a good deal of business can become available to any outfit that can bring in-depth asset knowledge to the table.

In Jansen’s experience, this sort of arrangement is only worthwhile on deals worth more than around €50,000, using fairly standard products, and involving relatively standard assets – not an option for brokers looking to find funding for highly specialised or unusual assets.

But although such deals can yield a commission rate of 5 percent split two ways, most such arrangements in reality will make a lower return, with one British broker saying 1.5 percent was an average figure.

In the eyes of Stephen Basset, head of the NACFB asset finance & leasing division, Euro business for UK business hunters is still “A lot of hard work for a relatively low return.” Aside from the commissions situation, he cites the unfamiliarity of some European lenders with standard British lease products and methods, as well as the very different level of IT system development in many European territories, as a major obstacle to many continental ambitions.

At the moment, it would seem that an eye for deals across the channel is something that only a handful of well connected and substantial brokers can afford to maintain, offering fairly meagre rewards despite the quality of business available.

But as the increasingly consolidatory legislative climate of the EU allows greater ease in cross-border business, and IT systems continue to develop (just look at Scandinavia for an example of a well developed processing culture), the legwork involved in looking abroad will continue to decrease.

When an easier borrowing climate allows more robust commissions into the equation on top of this, the work/reward balance may well shift to such an extent that UK brokers of all shapes and sizes look to extend their local business by several thousand miles…

Contributed by: Fred Crawley, Reporter – Leasing Life & Motor Finance