Asset finance is playing an increasingly important part in many businesses, providing the funding needed to purchase the equipment, machinery or capital that helps to facilitate growth. Last year, the sector saw significant growth, which looks set to continue over the coming 12 months despite the uncertainty surrounding Brexit and rise of new technologies and alternative finance platforms. Here, Rory Dunn, managing director of Portman Asset Finance, looks at the key influences for the industry this year.
The economic landscape
No industry is immune from the uncertainty of Brexit, and most businesses will have contingency plans in place for whatever outcome. In some cases, this means investing in the business to stay ahead of their competitors, weather a downturn, or make the most of new opportunities in the market.
From our experience, we have found that there will always be strong demand in the asset finance sector, regardless of market conditions, as many businesses require investment for consolidation or growth.
The implications of Brexit are not yet known, but we are confident that out of the confusion will come opportunities. In the case of a ‘soft’ Brexit, we will most likely see business as usual, with companies seeking out investment for equipment at a rate that has been experienced for the last 12 months. If the uncertainty continues or the UK leaves without an agreement, finance companies may still see a rise in demand, especially from firms that export and import goods in need of a financial injection to see them through the temporary uncertainty.
A forward-thinking asset finance provider will always look for the most dynamic candidates to support its continued growth, in every area of the company. Whether this is in a sales position or a service support role, firms should be on the look out for the best talent or experienced experts to focus on improvements to their offering. While companies outside of major cities may believe they’re at a disadvantage, this is not always the case. Recently, we have noticed a shift among skilled brokers moving away from London as they search for more desirable living costs and standards.
No matter what the year brings, one of the most common barriers to business growth is access to affordable and flexible finance options. The level of demand reflects this – over the last year Portman Asset Finance has seen an increase of 320 per cent in finance enquiries and a 35 per cent rise in the amount of finance arranged for businesses.
In 2019, I believe that the most successful asset finance firms will be able to understand the complexities of a lender’s demands and supply investment to sectors that are stagnant or in a current state of decline. With ongoing economic confusion, the number of sectors facing difficulties could rise, which may mean a higher demand for asset finance in the future.
The last few years have brought about significant developments in financial technology and with this, lenders have started to change their attitude towards disruptive fintech businesses entering the market. While these businesses can cater to a larger number of proposals, conversion rates for more traditional lenders appear to be much higher.
With the challenge of fintech businesses, established firms now have the opportunity to refocus their efforts, and bring a personal touch when dealing with customers. Directors should concentrate on understanding the client’s requirements and how they can fulfill them by delegating to dedicated and knowledgeable account managers. Firms should now be adapting technology into their processes so they can integrate and automate their financial and security data. With this, they can improve efficiencies and reduce the risk of fraud from their lenders
Artificial intelligence (AI) and predicative analytics will continue to drive change to influence the invoice finance sector. With this technology, firms can now monitor a client’s financial position – after gaining their approval – and take a proactive approach to support cashflow.
This means lenders will be able to contact clients before they run into cashflow issues. Whereas previously, companies would search for invoice finance when there was an issue and they needed immediate support. In a state of emergency, owners and managers were more likely to make rushed decisions, and accept deals with higher interest rates.
This new technology, now being utilised by Portman Asset Finance, can intervene before the additional finance is needed, ensuring the client finds the best investment for them at the right time. In 2018, a survey of 1,000 UK SMEs – commissioned by The Prompt Payment Directory – discovered that 50 per cent of SME owners had been on the edge of bankruptcy due to late or outstanding invoice payments. 63 per cent admitted that late payment issues resulted in not being able to pay themselves at the correct time, and 20 per cent had delayed payment of staff.
Problems with cashflow cause a great deal of anxiety for business owners, but using technology that tracks any late payments can reduce this stress and free up directors to focus on running their business.
In our business, we have worked hard to integrate technology while also focusing on the personal side of the service so that we can protect our core business values. Digitalisation will not replace face-to-face relationships, knowledge and skills, so it is important for finance firms to retain human interaction.
For more information on Portman Asset Finance, visit www.portmanassetfinance.co.uk.
STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19
By Alex Balcombe, Partner at Harris Balcombe
The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.
While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike. For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.
In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.
The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.
How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.
Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.
That said – don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it – though those with this cover are unlikely to realise it.
How Could I Be Covered?
Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.
To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.
Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.
However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.
Denial of Access Extension (non-damage)
Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.
If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.
It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.
People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.
These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.
HERE’S HOW YOU CAN LEARN TO TRADE RISK-FREE DURING THE COVID-19 MARKET CRASH
Trading app BullBear has launched new features to support budding investors looking to hone their skills against the backdrop of the COVID-19 stock market plunge. The risk-free financial game aims to empower the next generation of investors to learn how to trade stocks and shares by playing with dummy chips as opposed to real money. The app updates come as investors pull back from a volatile stock market rocked by the coronavirus outbreak.
At a time when some fresher investors are experiencing their first-ever stock market crash and seasoned investors are reluctant to invest new capital in the market, BullBear is empowering a whole new cohort of traders by teaching them how to trade effectively at no risk.
App users can engage in both short-term and long-term trading games using real-time market data from popular stocks enabling them to build investing confidence, making the app both engaging and educative.
With over 35,000 downloads, the app provides a free, fun way for thousands to learn how trading works by offering a practice arena in which trades take place and where no real money can be lost. Users can also enter into duals and competitions with other players. Whilst the app incorporates dummy chips to invest with, players can still redeem prizes by winning ‘bulls’ when they rank high in games. These bulls can be used to redeem rewards, such as gift cards from retailers like Amazon, Apple, Google Play and Netflix, at the in-app store.
Co-founder of the BullBear app, Anurag Saboo, stated
“I realised just how lacking the support for young investors was when my cofounder and I wanted to invest some money in stocks whilst at university. We had no idea where to start and so spent a couple of months trying to find a platform through which we could learn the basics before we risked any cash. But it simply didn’t exist. The resources that did were dull and theoretical. Paper trading can be very boring, and no-commission trading helps only if you make money out of your portfolio. Social methods of learning can help, for example, Etoro’s copy trades, but they still don’t let investors explore the markets themselves before putting money down. Combine this with the fact that only a small percentage of young investors make money through the market, and others end up staying away or are pushed away through losses, we decided to launch BullBear to offer a free, fun alternative.”
During a time of crisis accompanied by a turbulent stock market, the BullBear app provides a fail-proof way for budding investors to develop their trading knowledge, helping them to make more informed investments.
The BullBear app is available to download now on Google Play and the App Store.
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