Positive signs in the Asset Finance sector

Keith Sangwin, Head of Sales – Asset Finance

2019 has got off to a flying start for the Asset Finance division continuing a run of excellent business months which started back in May 2018.

Positive results have stemmed from the momentum that was created last year by activities such as our two ‘Owl Points’ promotions and our price match offer attracting a lot of interest. This coupled with our outstanding service and willingness to discuss deals with our introducers resulted in increasing numbers of brokers using us, many of them new to the Bank and doing their first transactions with UTB. The higher volumes of business are keeping the underwriters and our recently expanded administration team on their toes. We’ve always said that we wouldn’t let increasing volumes have a detrimental effect on our quick decisions and speedy pay outs and I’m confident we’re living up to that promise. There are now four people in the underwriting team talking to brokers throughout the day; Peter Price, Lee Chandler, Charlotte Fenton and Hayley Macfarlane, plus divisional head Martin Nixon. We’ve also had three new staff join the admin team in the last few months. Daniel Idowu joined us in November becoming UTB’s official 200th staff member and Lotty Teague and Tony Blake have also joined us this year.

The FLA’s March figures show a 9% increase in new asset finance business compared to January 2018 with lots of activity in our key markets including plant and machinery and commercial vehicles. It’s good to see we’re not the only busy funder at the moment! The first quarter of the year is generally a busy one in those sectors anyway but the growth in new business comparing January 2019 to January 2018 is encouraging. With 26% growth in plant and machinery business and 21% growth in commercial vehicles it would suggest that many UK SMEs are brushing aside any Brexit uncertainty and continuing to invest in new vehicles and machinery. We’re certainly seeing a lot of transactions for new vehicles so that companies can keep up with Euro 6 emissions standards. It’s great to see the FLA reporting that the Broker channel is still growing at the fastest rate too (13%) despite increasing competition from direct and vendor funders.

Bigger deals can be the icing on the cake of a great month and one recent case made a significant contribution to a record-breaking February. You may know that as well as funding high end performance cars and luxury marques we occasionally fund some very expensive classic and vintage cars. We recently funded a very rare classic car with a loan of well over £1m. This type and size of deal certainly isn’t ‘meat and drink’ for us, but for the right customers we’re happy to consider larger transactions on more unusual assets. We encourage Brokers to call and talk directly to an underwriter about any deal they’re looking to place. We’ll usually give them an indicative decision over the phone and a formal decision within 4 hours.

Persistence eventually pays off

Asset Finance BDM Klara Hanrahan was determined to show a successful East Anglian brokerage what a great service the Bank could offer them and their clients. Since taking over the patch at the start of 2018 Klara had made a point of making several trips up the A11 to Norwich to meet the team at Credo Asset Finance and in October last year managed to persuade them to submit a suitable proposal which was to refinance some yellow plant. The deal was accepted but at the last minute the customer decided to capital raise via a remortgage instead. Frustrating for all of us but it happens!

Then, in mid-December, Credo presented another proposal, this time to assist a customer with the purchase of a new FMX Volvo 8×4 Tipper costing £148,000 plus VAT financed over 5 years. The deal received swift approval and was paid out in the first week of January. As a bonus for Credo the deal also qualified them for a ‘Golden Owl’ in UTB’s Winter promotion which they exchanged for a classy Fortnum and Mason hamper to share amongst the team.

Lewis Buckley of Credo Asset Finance said: “I was really pleased to complete this deal with UTB, especially as we’d been really close to getting one over the line in October. The Bank agreed it quickly, the supplier was paid on time, our customer was very happy and on top of that we received a superb Fortnum’s hamper for the team. We’re looking forward to working with UTB again in the future.” Klara Hanrahan commented: “Credo are a great company and I knew they’d be an excellent fit for UTB. But I know what it’s like, brokers have lots of choice and when they’ve been happy using other funders for years it’s a leap of faith to try something new. I’m grateful to Lewis for giving us that opportunity and now with this deal completed, and another one agreed and going through admin, I’m confident that we’ll build a strong, long term relationship to benefit Credo, their customers and United Trust Bank.”