Supporting SMEs is vital in post-Brexit future

Derek Money, head of Glasgow sales at SME finance provider White Oak UK, discusses why client support has never been more important in the broker market.

This article originally featured in The Scotsman.

We can’t fail to miss recent headlines on the outlook for the UK economy and associated uncertainties around Brexit. It is clear that there are a number of factors that could cause some disruption to small and medium-sized enterprises (SMEs) across the UK, and with an estimated 1.2 million jobs created by SMEs in Scotland alone, the ability to gain access to finance is more crucial than ever.

We are seeing a change within industry and, undoubtedly, additional provisions for impairments. While we fully expect a significant change to happen, we cannot truly plan for it, but it’s sensible to feel that a correction in the market is imminent.

Yet, in the face of uncertainty, data from You Expert Group shows that the Scottish specialist lending market is predicted to double in size over the course of 2019, which, for brokers, represents a significant commercial opportunity.

This shift is interesting when comparing the size of the markets in Scotland and England. The Scottish market is considerably smaller and with significantly less direct competition. The more precise the market, however, the greater the customer emphasis on pricing.

Commercial finance brokers will work between the customer and the lender to ensure the best solution is achieved and, with an increasing level of “choice” across the market, new and emerging brokers are an ever-present factor. Whether we are referring to smaller so-called “bedroom brokers” or larger corporates, it’s all about adding value, giving the customer access to more sources of finance and the ability to stand out from the crowd – differentiation has never been more key.

It’s essential for brokers to be competitive in order to attract business interest and even more so to build loyalties with the client. The goal is to foster close relationships over several years, and this can only be achieved by doing right by clients and their businesses.

While White Oak UK maintains a large and effective telephone-based business across the UK via a diverse range of clients and brokers, the firm has historically maintained a strong field presence. With a concentration in Scotland, we have been able to build a strong and trusted face-to-face business over many years.

Furthermore, the areas of specialism play a large role. For example, our clients in Scotland typically fall into key sectors such as haulage, construction, energy and agriculture. By their very nature, these industries tend to be rural, which poses its own set of challenges in respect of accessibility, something that is perhaps much less of an issue to many of our English counterparts.

Our recent move to Glasgow from Stewarton was a key growth consideration, as it allows us to be closer to our growing client base and focus on developing new secured and unsecured products to serve the evolving needs of our customers and brokers under the broader White Oak UK banner.

This ability to better support our clients and brokers has never been more important as we battle against the uncertainty of the current geopolitical environment. We may not have a crystal ball, but it is clear to see that there are a number of factors that could cause some disruption to business supply chains, and indeed our customers, as we head closer to Brexit.

Encouragingly, we have seen no visible signs of a behavioural shift to date. This is clearly something that we will continue to monitor, both through our customers and our broker network, as keeping our lines of communication open will be essential in ensuring we are able to provide the best possible solutions to a changing set of requirements.

The post-Brexit landscape is currently unknown, and we anticipate that the industry as a whole will likely see some unsettled activity through 2019 and beyond, as we become more accustomed to the changes taking place. There is, however, a notable resilience among businesses, a “we’ve been here before” mentality. Businesses are still buying and they’re still investing. This won’t stop, but we will need to employ a more agile approach as an industry, if we are to deal with these evolving requirements.

We know from experience that asset-backed deals complement our business loans as a way to manage a client’s cashflow requirements. We are confident that our core product offering caters for a broad range of broker requirements. The hard asset market, for example, is mature and well established, but a change in mindset is required across the industry to increase the level of unsecured options offered.

This is a balance we know we are able to achieve, which will ultimately lead to the gain of our brokers. Essentially, we are positioned to provide a single solution to brokers, backed by our rapid turnaround, flexibility and ease of use – and with uncertainty ahead, these factors will become increasingly important.

This article originally featured in The Scotsman.

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