Funding futures


Bibby Financial Services was formed in 1982 and for the first two years, the business was operated from the accounts department of our parent company, the Bibby Line Group, before becoming a separate entity in 1984.

Fast-forward 33 years later and we’re Britain’s largest independently owned invoice finance provider, handling annual client turnover of £5bn in the UK and supporting over 9,500 businesses worldwide.

Over the past thirty-plus-years, we’ve consistently grown our position in the SME funding market.

To continue this growth, we have to stay ahead of the competition and to us, this means ensuring that we can support our clients’ businesses at all times, whatever their need.

So, whether our clients require cashflow support, help with sales ledger management and credit control or structured corporate finance for larger transactions, we want to be there to help.

Our commitment to SMEs

Representing our commitment to the SME market, this week we announced a refinancing deal that will see us pledge £770m in funding for UK businesses. The news, which featured in the Financial Times on Tuesday 10 November, will help us to support even more SMEs, creating jobs and growth opportunities for businesses across the country.

This refinancing was secured through a process of securitisation, whereby ratings agencies DBRS and Moody’s awarded AA and Aa2 ratings to our debtor-book, and with increased funding in place, I believe we can compete with banks and other funders on an even greater scale.

Having funded businesses for over 30 years, we have a sound understanding of the complex and often unique challenges faced by small businesses. It’s our personal touch and commitment to delivering excellent service for our customers that sets us apart from other funders. Now, clients of all shapes and sizes will not only be able to benefit from our tailored, bespoke approach, but they will also be able to unlock greater levels of working capital to fund future business growth.

You can read the full announcement on the BFS website here.

Attitudes Towards Enterprise


The Government published its Enterprise Bill on 17th September, which aims to cement the UK’s position as the best place in Europe to start and grow a business. Measures in the bill include reforming the Business Rates Appeals system so that it is more transparent and easier to understand, shifting and reducing the regulatory burden on businesses and extending the Business Impact Target to include regulators. It will also change the way that the term ‘apprenticeship’ is applied.

But the measure that caught everybody’s eye – mine included – was the commitment to create a Small Business Commissioner.

The imbalance in bargaining powers between the smallest of businesses and large firms can be damaging. I’ve written before about the implications that late payments and killer clauses can have on SMEs, so it’s good to see the Government taking measures to combat these imbalances directly. It seems to have recognised and acted on the fact that small businesses often lack the money, expertise and confidence to challenge practices they believe may be against the spirit, let alone the letter, of the law.

The Small Business Commissioner should act as a friend to smaller businesses, helping them to resolve disputes quickly and easily whilst simultaneously providing advice about preventing future issues involving dispute resolution, late payments and contract principles.

The Commissioner is yet to be appointed but they will work closely with Small Business Minister, Anna Soubry. Ms Soubry has been very vocal about the Commissioner’s role and has emphasised her desire for them to pick up the phone and speak directly to CEOs of large firms. Ms Soubry has also asserted that the Commissioner will have the power to name and shame larger businesses who aren’t playing ball. Although this is a last resort, it demonstrates the seriousness of the Government’s commitment to crack down on unfair treatment of small businesses.

Looking abroad for inspiration

Elsewhere, the US has a government agency dedicated to maintaining the wellbeing of small businesses. The US Small Business Administration offers a wide breadth of advice on starting and managing a business, contracting, combatting fraud and also offers extensive loan programmes. The agency summarises its activities with three Cs – capital, contracts and counselling. Having boldly championed smaller businesses for over fifty years, the dividends of this approach are surely self-evident in the world’s most entrepreneurial country.

A country still in the teething stages of dispute resolution development is Germany, which proposed a draft bill early last year with the intention of implementing the EU 2011 Late Payments Directive into national law. Germany is famous for its powerful ‘Mittelstand’, which is hugely productive and has fuelled the country’s growth. By actively acting against late payments in consumer transactions, they are turbo-boosting their position as one of, if not the best countries for SMEs in the world.

The UK may be slightly late to the party when it comes to championing SMEs but for my part, the movement to bolster their voice is laudable and one which I think will be valuable. With the efforts of the USA and Germany for guidance, the UK Small Business Commissioner will be able to learn from its international counterparts and rely on the support of British businesses that want to see this new position wield the power it needs to get SMEs the fair deal they deserve.

For my part, anything that seeks to challenge the culture of big businesses mistreating their smaller partners is to be welcomed.

Dark clouds on the economic horizon according to UK SMEs


The findings of our SME Confidence Tracker, reported in the Daily Telegraph, highlight subdued business confidence in Q3. Our research among 1,000 UK SMEs, shows declining business performance and significantly lower sales expectations for the final quarter, when compared with the same period in 2014.

Investment is also on shaky ground. Less businesses are recruiting, and – overall – investment in people is down 6%, year-on-year.

Though there are small pockets of optimism in both geography and industry, research points to a more cautious and pragmatic approach to the future. Those businesses that are investing are prioritising IT and equipment over people.

The results of the Confidence Tracker align with the Bank of England’s summary of business conditions for August and September, which shows slowing growth throughout the UK and across key sectors.

Ripples from overseas
Many observers believe that concerns over the stability of the global economy – as a result of declining growth rates in China – have caused anxieties in the UK economy and UK PMI reported  the weakest growth since April 2013 in September.

These concerns are compounded  by further questions over interest rates in the UK and US, the ongoing debate over EU reform and referendum and low – or negative – inflation we have witnessed in recent months. One can’t forget Russia either.

I believe that there is underlying inflation which is being masked by weak oil prices. If this is the case, when oil prices stabilise, inflation should reappear quickly. It’s likely to be for this reason that the Bank of England continues to discuss the possibility of a rate rise. There is also a reasonable possibility, however, that  some of these global concerns will dampen down demand, keeping inflation low. Only time will tell.

Problems at home
For SMEs, issues closer to home persist. Bad debt is on the rise, and over a quarter of the businesses we spoke with told us that they have been forced to write-off moneys owed to them in the past year.

Furthermore, late payment continues to act as a barrier to growth with almost half of businesses waiting more than 31 days for payment from customers.

In relation SME lending, things are also wavering. In my 37 years’ experience of lending, I have never witnessed so much money chasing so few business customers. One result of this is lower prices and – while this may be positive for SMEs in the short term – the accompanying rise in risk taken by many lenders is unlikely to end positively. In my experience, the longer a correction takes to arrive, the harder the landing will be.

Whatever the outcome of these domestic and global issues, it seems – for the time being at least – the hopeful optimism of last year has been replaced with anxious uncertainty as we move towards 2016.

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