In Focus Commercial Credit
Navigating the lending maze
Despite a continuation of restrictions in lending criteria, the options for SMEs to finance growth plans continues to expand
Mark Crook Chief executive, Henry Howard Finance
The finance market for SMEs is constantly changing. Elements of restrictive banking criteria introduced following the financial crash of 2008 are still evident in many areas of the market, which has contributed to an increase in so-called ‘alternative’ finance providers. Many of these newer lenders are prepared to look at increased funding opportunities and show willingness to support different types of funding initiatives.
Information overload However, as the market gets even more crowded, many business owners are facing an ‘information overload’ resulting in confusion over which products are likely to be the best solutions. There are also challenges around access and a lack of clarity around the steps that businesses need to take, in order to adequately prepare funding applications. Experienced businesses owners know that
they need to manage their credit facilities effectively to ensure that they remain as profitable and competitive as possible. However, many still do not consider
alternative methods of financing. Asset finance, for example, can fund the
purchase or an ‘upgrade’ of the all-important infrastructure that a business needs to remain profitable, and this can often be achieved on financially competitive terms and without any upfront capital outlay.
Increase in vendors There has also been an increase in the number of vendors and resellers selling lower-value, higher volume products – with terms that rely on faster decisions and turn-
July 2017
Whether a lender is dealing directly with a client or through a third- party vendor, the nature of the client relationship has never been so important
around times. These facilities are crucial for businesses that sell equipment to third-party clients and need to be able to offer automated finance agreements that are both competitive and straight-forward to manage. In addition to technology, these clients also want the
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backing of a finance provider that knows the finance market and understands their business objectives. Whether a lender is dealing directly with
a client or through a third-party vendor, the nature of the client relationship has never been so important. Having the ability to consider all the lending options available and match up the requirements of an individual business may be more time- consuming, but the expectations of business owners are such that this is rapidly becoming a must-have. Finance providers must not only offer the
right deal on the right terms, but they also need to deliver knowledgeable, tailored solutions if they want to be seen as a trusted and valued partner. CCR
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