Q. As we enter 2016 how do you see asset finance support for SMEs?
A. The asset finance industry is gearing itself up for 2016. We have seen an influx of new lenders and also private equity investment in existing funders. They are, with very little exception, looking to increase their lending to the right customers.
Asset finance is a great solution for an SME. Providing monthly installments are paid on time, apart from a possible asset inspection during the term of the finance, you will not receive any interference from the finance company and no additional charges. You are left to get on with running your business.
Q. Are SMEs fully aware of the services that companies such as EFT Finance can provide?
A. Not always! For example, it's not just Hire Purchase and Leasing for asset purchases that we can provide, but we can source Invoice Discounting or Factoring, Commercial Loans or even unsecured loans.
Refinance is a big mystery to many SMEs. Refinance means raising finance against existing assets to raise working capital, to raise cash to buy a more obscure asset that is difficult to finance or even to raise the deposit for a larger capex programme.
If an SME has a funding requirement we are here to explain the options they have.
Q. How do you allocate a customer or deal to a funder?
A. We are always speaking with our funders to establish their credit appetite and the sectors they favour. Both of these change throughout the year depending on where the funder is experiencing good or bad business.
We are always mindful of cost and aim to get the best deal for each customer.
Q. What is the best way to describe your job?
A. We are matchmakers! We find out what our customer wants and then we go and find them their match in a funder.
Sometimes the customer is not entirely clear about what he wants so we discuss the options until we develop the deal profile and then we go and find the best match. Hopefully they will love each other and it will be the start of a beautiful relationship!
Q. What changes have you noticed in SME attitude since the recession started in 2007/08?
A. In the early 2000’s a lot of SMEs were investing in assets in anticipation of future work that had not yet been secured. More recently SMEs are checking to see if finance is available for them in advance and then when they have won the contract or secured the workflow they are then acquiring the assets.
Also SMEs are reluctant to have ‘all their eggs in one basket’ any more. They are very nervous about the High Street Banks having too much control and cross collaterisation of their assets and facilities.
One of our customers talks about going back to the old days when the electricity was being supplied by the Electricity Board, his gas by the Gas Board and his phone by BT – he knew where he was and felt in control.
Q. Why is it that customers choose and stay loyal to EFT Finance?
A. We are straightforward people who speak in a straightforward manner.
Most of our long working life has been spent working for funders so we understand what they are looking for, their pressures and how they like to see deals structured.
We can talk directly to our funders and usually this helps get the right result for our customer. We understand customer service. We are very disappointed when for reasons out of our control it's not possible to build a long term relationship with our customers. Fortunately we usually can.
Q. Do you enjoy your job?
A. Love it!
Henry Hemsley is a founding director of EFT Finance. Henry has been in Banking and Asset Finance for 35 years. Seventeen of these years were spent in Senior Credit roles including Board representation as Director, Credit & Risk for EFT Finance Ltd and Group Credit & Risk Director for British Linen Asset Finance Group Ltd.
He was also Head of Credit at Hitachi Capital Business Finance and spent 3 years with Hitachi Capital managing their Broker division.