Bob Diamond could not have given
cultural commentators a better gift than he did in January 2011,
when he famously declared: “There was a period of remorse and
apology for banks. I think that period needs to be over.”
To note the retrospective irony here isn’t in
any way original – virtually every writer of finance or current
affairs editorial managed to bust it out on the day of his
resignation – but it certainly bears a second look from here, down
where leasing resides, in the quiet underbelly of the financial
sector.
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Yes, the social obsession with the Bad Banker
may have been given a potent new shot of longevity, and that’s
going to be an irritation to anyone who works in the sector. On the
other hand, with that condemnation comes the equal and
opposite public opinion – the longing for a kind of banking
that isn’t callous or greedy or reckless, and which fulfils a
social purpose.
Enter the good guy – the down-to-earth,
risk-averse lender who eschews trading in”derivatives” and
“incomprehensible” financial products, who lives in the real real
world of buses and photocopiers and printing presses, and who is
devoted to helping that most downtrodden of political caricatures,
the SME, to stay on its feet and prosper.
Sounds appealing?
At a time when provision of credit is central
to every political party’s policy, supporting SMEs through a
sensible product like leasing should be the equivalent of kissing
babies and shaking hands with veterans when it comes to garnering
positive public opinion.
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By GlobalDataThere is huge political expediency in the act
of stimulating lending, especially lending to the more personal end
of business (the family-run, small-town SME), and it comes from the
banker-bashing backlash which has been with us since Lehman
Brothers and Northern Rock.
Of course, the fact that this presents an
opportunity for leasing has clearly not escaped the notice of
lessors, both bank-owned as well as captive and independent. Since
2008, leasing companies of all kinds have been keen to emphasise in
their marketing collateral a marked difference from the banking
sector in the way they deliver lending to businesses.
The problem is, we are now four years down the
line and many potential business customers still don’t think of
asset finance as their first port of call (or even as any port of
call, for that matter) for capex funding. Furthermore, as our fleet
feature this month shows, targeting SMEs with a leasing product
still requires a very proactive and incentive-driven approach.
The second problem is that, despite the
political keeness to keep the SME backbone intact through
policy-making, governments still don’t seem to be doing so well in
creating schemes and programmes of which asset finance providers
can realistically take advantage.
In this issue Peter Collins of MAN Finance
steps up to say what many in the captive finance industry have
thought about the UK government’s National Loan Guarantee Scheme
(NLGS), labelling it a gimmick which fails to encourage lending
through asset finance.
Furthermore, going by comments made by lenders
at the National Association of Commercial Finance Brokers’ recent
expo, it seems there is industry-wide frustration over the
difficulty in meeting criteria for government incentives and then
working with the government to deliver the benefits.
While putting together the article on the NLGS,
news broke of a separate credit-easing scheme announced by the UK
government called Funding for Lending. At the time of writing it is
unclear whether the leasing and asset finance industry will be able
to benefit from the scheme, but it is indicative of the pace at
which political necessity can affect the lending landscape.
Few could have predicted the furore around
banking would remain as strong in 2012 as it was in dark winter of
2008 but for lessors, bank-owned or not, it is worth remembering
that it is an opportunity of a kind.
If governments will help lessors to make the
most of these opportunities, they stand to emerge, phoenix-like,
from banking’s bonfire of the vanities. I did promise clichés in
the headline…
Fred Crawley
fred.crawley@vrlfinancialnews.com
