Since its formation through the merger of Base Commercial Mortgages and asset finance lender Ruffler bank by private equity house AnaCap in June 2009, Aldermore has certainly been busy.

September 2009 saw the addition of Absolute Invoice Finance to the bank’s balance sheet, while steadily increasing panels of brokers in both asset finance and commercial property divisions have ensured growth despite an extremely quiet winter for the industry as a whole.

Most recently, the purchase of Heritable Asset Finance’s portfolio at the start of March saw around £35 million added to the Aldermore pot, virtually doubling the bank’s lease book to make up a quarter of its total assets.

The next step

All very impressive, given that Aldermore’s IT infrastructure for asset finance is not yet finished. Division head George Ashworth oversaw the completion of its first phase last month, allowing back office support for the bank’s current sales model.

This model is aimed at financing “hard” assets with good resale potential in the event of a customer default, in sectors such as construction, materials handling, agriculture and manufacturing.

At the moment, deals with a value of £100,000 form the majority of Aldermore’s asset finance lending. “However” says Ashworth, “with the next phase of the IT build, we can start to bring down deal value, and support a smaller ticket business.”

This expansion into smaller-value, higher-volume business will support Aldermore’s development of broker-led business, a policy which Stephens says applies across the bank, in invoice discounting and property lending as well as in asset finance.

Casting the net

Currently, Aldermore uses a panel of 28 asset finance brokers, and is in a position to consider further introducers. In commercial property lending, for example, the bank is adding four or five companies to its intermediary roster each month.

Beyond broker business, the new IT system will provide Aldermore with the means to make significant moves into the vendor finance space. At the moment, Ashworth’s division manages a handful of sales aid programmes, but it will soon be capable of developing new ones and accepting schemes introduced by brokers.

While asset finance business has been centralised at Aldermore’s head office in Peterborough until now, a network of business development managers (BDMs) is being put in place in order to give more comprehensive regional coverage.

These BDMs will work from the same locations as Absolute Invoice Finance, which came into Aldermore’s possession with a fully fledged network of regional offices. This congruence, says Stephens, will not just be physical. Cross-selling is central to Aldermore’s strategy, as one would expect from a company formed from lenders in three different fields of finance provision.

First on the list

From here on, Aldermore’s strategy is unambiguous. “Our overall strategic objective is to be recognised as a bank providing first class service” says Stephens. “We want to be one of the first names on any SME’s list when it comes to acquiring equipment in an asset class we support, such as materials handling.”

The way to achieve this, in the opinions of both Stephens and Ashworth, is for Aldermore to identify further markets of interest and make rapid progress in building a name in them. For an example of this strategy, one need only look so far as the move into the Professions finance market through the purchase of HAF.

For now, Aldermore’s greatest strengths are the speed at which it can make decisions, and the liquidity – albeit not limitless – with which it can back them up. If it can keep such tight lines of communication as it takes on more staff and more business, its name will be heard more and more often in UK leasing.

Article contributed by Fred Crawley – Senior Reporter, Leasing Life & Motor Finance