Two major moves in the UK leasing market suggest there
is still plenty of money to lend, particularly to small and
medium-sized enterprises. Fred Crawley reports
Taken as a whole, 2009 has ushered in far more business closures
than fresh starts. In recent weeks, however, two high-profile moves
have put well-respected business builders in the enviable – if
daunting – position of putting together a brand new asset finance
business.
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The first is Richard Briscoe, formerly of
Arkle Finance, who at the time of writing had just walked into his
new office, situated in the grounds of Castle Ashby,
Northampton.
He is there to build a business under the
banner of Close Asset Finance, which he will take to the market as
Close Business Finance, a unit of the group’s wider asset finance
business.
The objective, says Briscoe, is to create
something very much along the lines of Arkle precursor Weatherbys
Finance, which he created from scratch in 2002. Essentially, this
will mean a broker-led operation with a focus on ‘soft’ assets such
as catering equipment and shop and office fittings, concentrating
on ticket sizes between £5,000 (€5,500) and £50,000.
The strategic resources that the new business
can draw on will be more extensive than those that were available
to Briscoe when building Weatherbys – the Close Asset Finance group
already runs a number of finance companies with gross receivables
in excess of £900 million, and has been in the leasing business for
22 years.
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By GlobalDataWeatherbys was not his first experience with
growing a business. In 1994, he began his career with independent
lender Broadcastle, as assistant to the company’s chief
executive.
According to Briscoe, this period of his
career acted as a kind of apprenticeship in how to run and develop
an asset finance company. He became head of underwriting during his
eight-year tenure, and saw the business grow considerably.
In fact, three years after his departure for
Weatherbys, Broadcastle was bought by German lessor Siemens
Financial Services for £41.5 million.
Briscoe will bring more than experience to the
new venture: some of the brokers that Close Business Finance will
inherit as introducers have been trusted sources for business since
his earliest days at Broadcastle.
Although he stresses that he will have his eye
very much more on quality then on quantity of business, Briscoe
anticipates lending £15 million to £18 million in CBF’s first year.
In two years, he hopes to have doubled the amount being lent and
have around 12 staff in his office – but for now, he will have to
make do with setting up the phone system.
Elsewhere in UK banking, George Ashworth has
an awful lot of work on his plate – but he sounds more than happy
with the prospect.
No small wonder – he has just moved from a
senior international vendor services role within the troubled
Belgo-Dutch operation Fortis Lease to the position of head of asset
finance at brand new bank Aldermore.
Aldermore, owned by private equity house
AnaCap, plans to grow a flourishing asset finance and leasing
business from the portfolio of pre-buyout incarnation Ruffler Bank,
which specialised in financing coin-operated machines.
AnaCap bought Ruffler Bank earlier this year,
and combined it with other acquisition Base Commercial Mortgages to
create the new lender.
According to Ashworth, the direction that
Aldermore will take is not set in stone: “Keeping our options open
is important as there are plenty of opportunities”.
“The main objective for the asset finance
business,” he stresses, “is to support the bank’s overall ambition
to be the UK’s number one SME lender of choice”. Ashworth advises
that there will be a focus on funding ‘hard’, tangible assets of
easily determinable value, with potential for longevity. He also
hinted the funding model behind the successful Ruffler coin-op
business might well be applied to other sectors.
Much like Briscoe’s new business, Aldermore
will also be making good use of broker introductions as it gets
running – it is already benefitting from AnaCap sibling Syscap, in
which it has a sizeable equity stake, as a source of good quality
IT business.
Beyond that, the bank’s distribution strategy,
much like its asset focus, is undecided. Ashworth is weighing up
the options, but feels that, for now at least, his immediate past
experience of the vendor sector will be given a rest.
More immediately useful might be his
experience as operations director for Lombard, a role he took on in
2000 before going on to head up the lessor’s sales and then
business development functions.
Ashworth is not suggesting that Aldermore has
growth ambitions on the scale of the RBS-owned colossus – like
Briscoe, he underlines the importance of writing good rather than
plentiful business – but he doesn’t deny that his past
responsibilities have given him a good eye for putting together a
robust model for volume lending.
First on the agenda is a new IT
infrastructure. Phase I is due to be completed at the end of
October, laying the foundations for Phase II to be prepared for the
second quarter next year.
“Aldermore will then be well placed to handle
a number of product offerings on a scalable basis,” says
Ashworth.
People also feature prominently. Aldermore is
looking to recruit a number of staff, with a new business
development position in the North West and a credit risk function
position currently under offer.
Ashworth is keen to recruit personnel with
experience of every stage of the transactional process, since
Aldermore’s business model is still evolving.
“We are looking to recruit people
incrementally who can add value both in our initial setting up
phase and thereafter,” he says.
By Christmas the new asset finance unit will
have a small team in place, capable of writing business with the IT
and business process infrastructure that has been completed by that
point. Come Spring 2010, it looks as if Ashworth will be ready to
begin lending in earnest.
