Richard Waldman anticipates a ‘good year for the industry’

By Richard Waldman, group sales director at Ultimate Finance

We had a record 2017 at Ultimate Finance, and I believe the outlook is similarly good for alternative lenders to the SME market.

In 2017 we saw a 47% increase in cash lent to UK businesses, with growth especially strong across our invoice finance (up 42%), asset finance (72%) and trade finance (44%) divisions.

We have invested significantly in both our digital offering and also on the ground with the opening of multiple new offices, ensuring that we are close to our current and future customers. Indeed, 2017 saw us open a new office in Maidstone to support businesses in the South East and we relocated in both Leeds and Bristol to larger, bespoke offices to accommodate an increase in headcount.

We’re proud of this growth, but I don’t believe this is just confined to us. Alternative lenders generally are seeing a strong market with real appetite from businesses for fast, flexible financing. In fact, I think we have seen a change in the market over the last few years as clients realise that there genuinely are far more options than simply going to a high street bank. Obtaining funding through a bank can still be a tortuous process with a number of hoops to jump through, and stats from the British Business Bank show that rejection rates for businesses looking to scale up remain high.

For a good business that needs funding to grow or bridge a short-term cash flow challenge, the alternative finance market offers many different options and the signs are that companies are increasingly happy to explore them. There is no ‘stigma’ in going elsewhere now.

Despite Brexit uncertainty bringing new challenges to businesses in the UK, confidence in borrowing to grow appears high, as evidenced by the fact that we have had our best year yet. This uncertainty may continue through 2018 but the number of active businesses in the UK remains on an upward trajectory, and with it the need for flexible funding will grow too.

Savvy customers are looking for more than just the cheapest deal on the market; after all, a smart business person knows that you get what you pay for. Speed, flexibility of service and access to someone who understands their challenges and can proactively offer solutions are important factors for them to consider when choosing a funding partner. The important thing is that the funder they pick is someone who is on their side.

I am confident that 2018 will see our strong performance continue. Last year, we launched two new products which have been very well received and are expected to remain popular: the Cash Advance – the fastest loan on the market – and purchase finance, a unique product which enables businesses to fund the purchase of goods, including perishables and raw materials.

It is through innovation like this and filling gaps in the market that lenders can drive better performance. It’s about showing support for our business community and bringing them new ways to finance their growth.

So, I am anticipating a good year for the industry, which bodes well for commercial finance advisors, who can play an active part in supporting small businesses to access the funding they need.

Working closely with lenders that understand the market and are committed to finding a tailored solution for every customer is just one way they can benefit from a growing need for flexible cash in the SME market.