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Lombard
lending
I believe the leasing market is
definitely back. Last year there was little competition due to lack
of liquidity in the market, and those that were actively lending to
the right covenant had bumper years.
In my part of Lombard – major
corporate asset finance – we continue to lend significant sums and
are going to market for any type of deal. Brokers, intermediaries
and arrangers are welcome selectively when they work in the sectors
we desire to be associated with – but engagement with the end user
is key. “All depends” is the bottom line – with the right deal,
anything is possible.
Mass market broker deals where no
one ever meets or engages with the client is definitely not
Lombard’s strategy, nor that of any other major funder.
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By GlobalDataMost lenders have exited the small
ticket broker-led markets due to increased bad debt provisions and
clearly we can see frustration from the broker community on this,
but lets all take some collective responsibility.
Robert Taylor, director, Major
Corporate Asset Finance at RBS Global Banking &
Markets
Keep it simple
Known and trusted intermediaries –
successful broker led business is no more complicated than that. A
colleague I met in the 1980s, who I’m fairly confident in saying
has controlled over £1bn (€1.2bn) in broker-introduced business
over 30 years, experienced just one £10,000 fraud in all that time,
as well as some of the lowest bad debt provisions and delinquency
rates in the business.
He did this by giving a consistent
message as to what business he wanted, being honest with brokers
when a deal wasn’t right, and keeping short, direct lines of
communication. My colleague and now close friend has left the
market. As far as he can see, no funder is currently likely to
adopt what was a very simple but highly-effective model.
Trevor Pirie, owner at Finance
South/Ventas
Baby/bathwater
scenario
No matter whether it’s big, medium
or small ticket, work with the intermediaries you feel comfortable
with and trust. The moment you shift to target-driven business,
that’s when the whole thing collapses again.
Say you activated £1m (€1.2m) of
quality business in a particular period. You may have done this by
being cautious, choosing the right partners, putting in the
controls etc.
Unfortunately, you’ve made it look
easy, so it’s decided that in the next period you can do £2m. Now,
you’re under pressure to achieve not quality but volume.
And the whole sorry story kicks off
again – shoddy business from unknown sources. Up goes the default
and everyone says, “It’s not us, it’s the brokers. We’ll have to
stop dealing with them.” And once more it’s the baby/bathwater
scenario.
Paul Hartley, owner, Creative
Leasing Ltd
Email letters to the editor to liz.bury@vrlfinancialnews.com
