A major new hire at Close
helps to fill void in materials handling, as DLL and BPLG tighten
lending in the sector. Fred Crawley reports.
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Close Asset Finance (CAF) has launched a
dedicated materials handling (MH) division, hiring Jeremy Spooner,
formerly a specialist at De Lage Landen (DLL), as national sales
manager for the Chester-based unit.
It is understood that CAF intends to move
quickly into the segment of the market left looking for finance
since the withdrawal of Bank of Ireland and CIT, and since the
retreat of Lombard from business with non-RBS customers.
Although CAF has done plenty of individual MH
deals in the past, the new division will give it the ability to
provide contract hire, maintenance-inclusive agreements, and deals
including an element of RV risk, as well as start up a vendor
finance business.
While volume players still remain in the
market in the form of DLL and BNP Paribas Lease Group (trading as
Albury Asset Rentals), they will not be direct competitors of CAF.
Both have tightened up their lending considerably, and have left a
lot of potential lessees unable to acquire finance due to risk
profiles that fall outside the acceptance range of their scoring
systems.
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By GlobalDataCAF, however, is well known for targeting less
conventional deals, employing higher risk pricing and highly
personal underwriting to fund clients beyond the reach of the
largest lessors.
“This is business that can be written, but
needs the Close approach,” said Spooner.
In addition, Albury, after the retirement of
highly-respected driving force Kevin Lofting, appears to be pulling
back into the more general vendor business of BPLG, while DLL is
concentrating heavily on sectors such as agriculture – in short,
neither seems to have a particular mandate to support MH
growth.
Commenting on his division’s approach to the
market, Spooner added that CAF’s “flat management structure and
lack of bureaucracy” would be a boon in expanding quickly into
relatively empty space
He explained that underwriting decisions can
be made at face to face meetings or over the phone, rather than
being referred to a committee.
As part of this, Spooner himself has
underwriting authority, with access to higher ticket authorisation
through his line manager in Chester.
In terms of channels, CAF’s new unit will be
taking a strong sales-aid stance, working largely with
manufacturers and dealers. After the recruitment of a larger team,
however, it is understood that the division will begin to develop a
direct sales operation.
A wealth of experience
Of Spooner’s 15 years of experience in
materials handling finance, six and a half were spent working with
vendor accounts at DLL where he was instrumental in developing a
programme with Briggs Equipment – the sole distributor for
Caterpillar MH equipment in the UK – in late 2007.
After joining DLL in 2003, Spooner took
responsibility for the Jungheinrich vendor programme. When the
Dutch-owned lessor rearranged its UK vendor business to delineate
responsibility by region rather than by account, however, Spooner
became responsible for the Northern sales territory, where he
arranged the Briggs deal.
During 2008, international financial carnage
prompted DLL to rethink its business model once again, deciding to
concentrate on core sectors such as agriculture and food.
Despite the opening up of the MH market
through the withdrawal of Bank of Ireland, CIT and Lombard, DLL did
little to expand in the sector, with the notable exception of
taking on the sizeable Linde contract from CIT in early 2009.
Itching to spearhead growth again, Spooner
took the opportunity to make the move to Close Asset Finance, where
he began helping the bank put together a plan to tackle the MH
sector.
The big question now is how much ground CAF’s
recession-friendly business model can gain before the economic
climate shifts again and favours more conservative funders.
