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.

Reflections on the changing funding world


Some onlookers thought that 2015 would be the year when we might be able to move on from the fallout of the financial crisis, with UK banks finally forgiven for their past misdemeanours. There were positive murmurs from the Government and a clear desire to get on with the vital work of restoring trust and confidence in the financial services sector.

Indeed, in his June Mansion House speech, Chancellor George Osborne spoke about the UK financial services industry’s capacity to be the best in the world, with “more competition, more innovation and more players in retail markets.”

The industry expected an end to the loathed bank levy as a result, but surprisingly Mr Osborne levied a new surcharge of 8%, applicable to all banks and building societies, including ‘challenger’ banks, which he previously appeared to embrace.

Defending this seeming U-turn, the Chancellor said “the banking sector has to put something back into the economy, so there will be no changes to the tax surcharge this fiscal year.”

It seemed that all was neither forgiven nor forgotten.

This ongoing stasis in relations with the banks is regrettable mostly because of the unintended consequences of legislation and regulation. The sad truth is that the weight of a tightened regulatory burden falls on the shoulders of UK businesses – the very organisations the Chancellor is hoping will power us on to continued economic growth.

With European and global regulation forcing banks to meet ever-higher capital and liquidity requirements, banks are increasingly unable to lend to businesses. This is even more severe in the case of SMEs and start-ups, who are considered high-risk. As the banks move to shrink their balance sheets, they are also largely exiting many forms of business lending.

It simply doesn’t make financial sense anymore for the banks to lend to businesses.

An even hand

As the head of a large independently owned financier, many may think that this is welcome news to me. But the reality is that – in a business’s funding tool-kit – there is a place for traditional forms of lending, in addition to non-bank forms of funding.

From overdrafts to invoice finance, leasing to bank loans, the market needs a full range of offerings to meet small businesses’ needs.

At present, however, the current media landscape portrays SMEs as having an ‘either or’ option. Either secure funding from a bank or peer-to-peer (P2P) lenders. But there are other avenues for businesses.

You would expect me to highlight invoice finance, but leasing and asset based lending are two other viable forms of business funding.

If SMEs rush to P2P lenders, in place of more established forms of funding, they are putting their faith in – as yet – unproven and untested players that only offer funding pure and simple, without value added services, such as sales ledger management, credit control or payment collection.

A recent Evening Standard article discussed rumours of a looming P2P lending failure and it is my belief that the Chancellor must be even-handed in highlighting risk within the financial system. This includes extending appropriate warnings about newer forms of finance to both SMEs searching for funding and investors looking for returns.

The Chancellor should also remember that the UK has a significant tradition of independent asset based financiers. At any one time such funders provide £19.3 billion in to businesses and this significant contribution to employment, growth and output must not be taken for granted.