An introduction to alternative finance on a grand scale at NACFB’s Commercial Finance Expo

Many of the movers and shakers from the alternative finance world were in Birmingham this week, taking the chance to meet hundreds of introducers – all under one roof.

Pensionledfunding.com’s Mark Johnson was among them at the NACFB’s sixth Commercial Finance Expo, making new contacts and catching up with old friends and introducers he has known for many years.

[image type=”thumbnail” float=”left” src=”/wp-content/uploads/sites/2/2015/06/blog_mark_jonson.jpg” alt=”Mark Johnson – Associate Director at Clifton Asset Management” info=”none” info_place=”top” info_trigger=”hover”]

“Potentially we can meet up to 500 introducers in one place which would take us months to do if we made individual appointments,” said Mark, who was joined on the PLF stand by colleagues from sister company Clifton Wealth Ltd.

“The fact that we are able to talk to the introducers when they have had the opportunity to see many other offerings allows us to position PLF against the other providers and ensure they see the benefits of what we offer.”

The enormous potential of the Expo is not restricted to individual businesses such as pensionledfunding.com but extends to sector partnerships.

“We have the opportunity to present how PLF can work in collaboration with other providers to give the SME an efficient basis for funding.

“This message tends to hit home much more while the introducer is talking to everyone else and is fully focused, which isn’t always the case when they are in their own office with many other things on their mind,” Mark points out.

Mark, who has worked with the NACFB on their compliance and education committees, has been attending the event in its different formats for around 15 years.

“Initially, they started off as half day events where providers had their own table with a few leaflets and since then has morphed into a very successful and well respected expo format. The numbers have consistently grown over the past five years.”

Now Mark has live links to the pension-led funding portal to give practical demonstrations of what PLF has to offer to introducers and potential clients.

“The Expo allows us to remind people of our brand and offering. We put faces to names and introducers and customers have time to ask questions about the complex nature of what we do.”

There is the opportunity to look at the bigger with guests including the British Business Bank and the chance to catch up with the board of the NACFB.

Mark said: “The Expo gives us the ability to discuss how we can work together, discuss market conditions, see what new innovations are working, and recommend introducers to each other’s stand when we identify an alternative need.”

Not the end of the road

Last month saw the publication of the Business Finance Guide jointly produced by the British Business Bank and the Institute of Chartered Accountants in England and Wales (ICAEW).

The guide, while being thought provoking and useful, can’t be considered comprehensive as it fails to acknowledge pension-led funding! However, that aside, it represents yet another good move from the government and specifically the work that Business Secretary, Vince Cable has been doing, in promoting access to finance for UK small and medium-sized businesses.

Launching this guide for small and medium-sized businesses, Dr Cable said: “The business finance market is going through a period of rapid change with challenger banks, peer-to-peer lenders and invoice financing gaining traction. But over two-thirds of small and medium-sized firms only go to one finance provider, so it’s important businesses know about the huge variety of options open to them.

[blockquote]“This newly-published free guide should be essential reading for all entrepreneurs and directors, and will play a key role in raising awareness of the different types of finance available to start or grow their business.”[/blockquote]

While the Business Bank doesn’t lend directly to businesses, it has significant firepower, and, according to the department’s figures, introduced over £800m into the marketplace over the course of 2013. With a potential £3 billion on offer over the next five years, the government anticipates leveraging this number to closer to £10 billion, an amount not to be sneezed at.

And yet the evidence shows us that the vast majority of businesses still rely on their bank to provide finance, and many of those, once rejected, seem to disappear off the radar. Missed opportunities possibly.

I believe that the most effective thing that Vince Cable and the coalition government can do for UK business is to make sure that the rejection letter is not the end of the road.

New Thinking For The New Year

Looking back on 2012 we can clearly see that one of the most pressing problems facing the UK economy is the general lack of a coherent policy to boost growth. Politicians and their policy advisers appear bereft of any creative thinking surrounding this area, instead we are being offered an ever more desperate sounding series of initiatives designed to encourage lending to SME businesses.

With growth likely to be 1% or less in the coming year it is surely time to look for some really radical and game changing efforts from the coalition if they are to get the economy back on a sound footing and save themselves at the ballot box at the next election.

Such anaemic growth as forecast will need little to blow it off course and this offers us the spectre of a third recession since the financial crisis began.

At the same time on the political front we now see a dramatic rise in anti-European sentiment (look at the recent UKIP polling numbers), which can only cause further instability and concern both at home and abroad.

In this febrile environment of policy drift and political uncertainty businesses cannot be blamed for being defensive in their investment outlook and this negative feedback loop will simply reinforce the current situation.

So what can the Government do to support British business? Maybe it is time for some challenging thinking from our leaders. I have some suggestions or Vince Cable and his team.

  • An accommodating tax regime with built in “time-to-pay” mechanisms allowing business to stagger VAT and PAYE just as in a distress situation. This could be based on company profitability allowing businesses that are moving out of profit to relieve their cash flow.
  • Aggressive encouragement toward employment policy including strong financial incentives for apprenticeships
  • Extensive Tax credits for exporters
  • Government support for alternative forms of corporate finance including crowd-sourcing and pension-led funding
  • Push ahead with much expanded plans for the British Business Bank

I agree that in the short term these are potentially revenue negative for the Government, however it is now becoming clear across the globe that austerity without investment in growth is a damaging policy and I would urge the current Government to act boldly.

British business has proven resilient over the years and given creative and progressive tools, I believe they will not disappoint.

Adam Tavener
Chairman, Clifton Asset Management Plc