David Postings: asset based funders best placed to support SMEs through Brexit
Head of independent funder says opportunities for SMEs in aftermath of Referendum
The boss of the UK’s largest independent invoice finance company, Bibby Financial Services (BFS), says asset based finance sector is best placed to support SMEs through the months and years ahead.
Mr Postings’ comments come in the wake of wide-spread reports of declining SME confidence and a potential funding gap, following the UK’s vote to leave the EU on 23 June 2016.
Global Chief Executive of BFS, Mr Postings said: “There’s a lot of talk about a potential funding gap in the UK following the Referendum and there are reports of some high-street lenders already retreating from the market. This, however, provides a fantastic opportunity for asset based funders to step-in to plug this gap.”
According to the Asset Based Finance Association (ABFA), its members advanced more than £19bn to UK businesses at the end of Q2. Mr Postings believes that the industry can now steal a march on other forms of finance, due to the way it provides funding against a business’s assets.
Mr Postings said: “Forms of funding such as invoice finance grow in line with a business’s sales ledger and this means that SMEs don’t have to take-on additional debt. This provides an opportunity for asset based funders to step in, at a time where many SMEs will be reluctant to take on debt and during a time when many high-street lenders will be looking to reduce their exposure to the SME market.
“A huge advantage asset based funding has over other forms of finance is the visibility of debt being funded. This enables us to get under the bonnet of SME businesses, which allows us to tailor funding to their individual needs, often providing greater levels of funding than an overdraft or loan, for instance.
“Asset based funding isn’t a ‘one size fits all’ approach like other forms of finance. We take a relationship approach to financing our clients and this means that we work alongside a business as opposed to simply providing transactional lending. Another advantage in the current climate is that our funding capability isn’t based on individual private investor confidence. Therefore, while some online lenders will be hit by falling investor confidence, we’re highly capitalised, open for business and ready to continue to support SMEs.”
Part of the 208-year-old family business, the Bibby Line Group, BFS supports 9,500 SMEs globally through its range of funding options. Its financing solutions include Invoice Discounting, Factoring, Trade, Export Finance and Foreign Exchange.
The business had its best month since August 2012 in June, when it advanced more than £432m in funding to businesses.