Venture Finance Industry Think Tank

    HAYWARDS HEATH, ENGLAND, October 15, 2009 /24-7PressRelease/ -- Premier factoring, Invoice finance and Asset Based Lender Venture Finance has hosted a high-level industry think tank to examine the opportunities for the Invoice and Asset Based Lending industry given the radically changed lending landscape. A white paper outlining conclusions and recommendations for the industry will be released later this month.

Chaired by Professor Nigel Waite, head of the Financial Services Research Forum, the 'Evolution of Alternative Finance' think tank drew together industry representatives including the Asset Based Finance Association (ABFA), KPMG, the Federation of Small Businesses (FSA), the South East Economic Development Association (SEEDA), a successful retail business as well as relevant media and research bodies.

The impetus for the discussion stemmed from the widespread industry consensus that the Invoice and Asset Based Lending industry is at a watershed moment in its history. The closure of conventional forms of funding bought about by the banking crisis has injected a previously 'niche' form of finance with a greater degree of urgency and relevance to the UK business community - Venture's own recent research found that 60 per cent of accountants reported clients are being more proactive in investigating alternative forms of funding. The starting point for the think tank was to ask what actions the industry must now take if it hopes to capitalise on that opportunity. As Professor Waite commented in his opening remarks, "...what kind of a future can asset based lending look forward to; how should it present and position itself and, perhaps, what should be its strategic imperatives?"

The subsequent wide-ranging and lively discussion examined the ABL industry's claims to hold a centre ground position in business finance on the basis of its robust, reliable and pragmatic offering, and what barriers to entry need to be deconstructed to broaden its appeal further. For too long, ABL has been perceived as an alternative form of funding. If the lessons of the last decade are to be learnt and those preconceptions overcome, the attendees identified a need to educate government, introducers and end users to the benefits of a more 'common sense' approach to lending, giving particular emphasis to the higher level of service that is at the heart of the ABL approach.

The group agreed that in order for the ABL industry to capitalise on the opportunities brought about by the lack of available credit during and beyond the recession and consolidate the newly acquired mainstream positioning, there were some key areas for action.

1. Emphasise service as a key advantage
The service levels that the best Asset Based Lenders provide their clients was highlighted as a key selling point and competitive advantage for the whole industry and should be prominently promoted. It was agreed that businesses are emerging from the recession with a greater awareness of the need for prudent, personalised service from finance providers, breaking away from the 'fragmentation of profit centres' paradigm that has characterised business banking in recent years.

2. Investment in education and promotion
The industry must increase its investment in education, working with other business networks and via its own initiatives, starting at school level and rising all the way to the Government. As Kate Sharp, Chief Executive of ABFA commented, "When the people that run the banks truly understand what asset based financiers can do, we will get there. At the moment, I don't think that's true but I do think that if there's a silver lining on the cloud of this particular recession, it's that it's forcing people to recognise it."

3. Simplify the terminology
Widespread use of industry jargon was perceived as a barrier to further development.

Peter Ewen, Managing Director, Venture Finance comments: "At this important time for our industry, and in Venture's 20th year of operation, we wanted to ignite a debate with key opinion formers. The conclusions reached should be of interest to key industry players and the wider advisory community alike.

"UK businesses are relying more heavily than ever before on strong relationships with their financiers - crucial to achieving stability and emerging from the recession in a position of strength. Greater numbers are also moving away from traditional sources to more robust and responsive funding methods. Invoice and Asset Based Lending offers both the quantum and certainty of funding to facilitate restructuring, growth and even acquisition."

Those interested in receiving a copy of the white paper, entitled The Evolution of Invoice and Asset Based Lending, can register their interest by emailing [email protected]

Website: http://www.venture-finance.co.uk/

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