We caught up with commercial finance broker, Guy Bridge from Finpoint, to discuss what it means to be working in the commercial finance space in 2022. We go through the challenges that business owners face today, as well as the developments and predictions for commercial finance in 2022.
I have been involved in the finance services for many years, undertaking a variety of roles - largely client facing but also covering credit risk and operations. In this time, I have seen significant changes in the industry; from the effects of the “Big Bang”, the tech boom, the fallout from the financial crash (one of the largest broker dealers was a client) to the rise in Fintech. I therefore understand the many challenges that small businesses face.
At the same time, I have always been interested in how technology can assist businesses so when I left mainstream banking in 2014, I helped found Finpoint. Finpoint is a new breed of commercial finance intermediary, a Finance Platform which uses technology to enable businesses to access finance. Our platform is used by many business support groups throughout the UK to assist their members or clients when they do not have the expertise to help, one good example is we provide it to The Federation of Small Businesses who use us exclusively.
Having personal contact with clients is the aspect of the role that I enjoy the most. Whilst technology can do some of the heavy lifting, it is the personal approach that counts and often makes the difference to clients. As well as using our platform, our clients want to speak to someone who understands their needs and to talk through their options. We deal with a variety of businesses in all sectors of the economy, established companies or in their early stages, sole traders, limited companies, partnerships and charities. This makes the challenge very interesting.
Having a role in this process is extremely rewarding when providing businesses with choice and allowing them control in the process enabling them to access the most appropriate funding and satisfying.
An open, honest and reliable approach is what drives me and the company. We do not over promise and we value long term collaborative relationships and partnerships.
Covid has changed the finance landscape forever. In the later stages of 2021 things started to open up a little and we saw a return of many lenders to the market. 2022 has started positively, albeit slower than expected. There is plenty of capital to be deployed but many lenders are still cautious. However, whilst risk appetite does remain tight there are new lenders with different approaches and specialisms who are providing additional energy and competition. In addition, some traditional players are now catching up with the new FinTechs and becoming much more agile. I believe these will continue to up their game this year.
In the immediate future we will continue to see greater use of technology, including more APIs being used, but we may also see a return to automated approvals again for some products later in the year.
One legacy of Covid is that most businesses are now more digital savvy and are much more confident in using a digital solution, particularly if they have the option of speaking to someone as well.
Many businesses are just not finance ready who come to Finpoint and we give an honest assessment as we don’t wish to take up lenders time with inappropriate referrals. This is also why lenders like our platform as it is a virtual data room and makes their job that much easier.
The good news is we see many new established or early-stage businesses who are keen to adopt fintech solutions. They are drawn to us because we provide that combination of technology and hands on advice they want and it is key that we speak to all our clients and provide the reassurance and guidance they need.
I believe that business leaders will seek to increase investment in the expectation of strong consumer demand in the UK economy. However, with the challenges following Brexit, labour shortages, the pandemic, climate change and higher inflation as the top risks facing their businesses it will be hard for a lot of small businesses.
That said with the threat of coronavirus waning, I believe that 2022 will be transformational for many SMEs and the business finance market will continue to open up. Ever the optimist.
The variety of businesses we see emphasises the importance of having a flexible product offer, from whole debtor book to single debtor but also from a funder who is able to look at multiple sectors.
In addition, the ability to assess the debtor book in isolation is helpful, particularly given the past 2 years of economic conditions that have had an impact on trading. Finally, from the feedback we get there a need for a clear and concise price structure.
I feel invoice is still underused as it is ideally suited for business growth and expansion, where T/O is increasing, and funds are tied up in the debt ledger. Often there is need to overcome a client’s reluctance to consider the product at all but with less and less overdrafts available it should be used more. If the pricing is competitive it makes this discussion easier and I am convinced with the growing number of providers Invoice Finance will become more popular.
I used to like running a lot but less so these days; my marathon days are alas over. I admire those who can keep up the training. I do like to keep healthy, so the dog gets a lot of exercise!! I also spend time in the garden, play golf badly and ski even worse but enjoy them all.
Seeing my children develop their careers is a great tonic, one's a teacher, another a consultant and have one who is now an A&E Doctor, all roles I think much more demanding than brokering.
I am also a Trustee for a residential care home for adults with learning disabilities which really keeps me grounded and though it has not been easy in the last two years both for the residents or staff it is extremely rewarding to be involved.
More spontaneity! Some trips abroad …….