Gavin Wraith-Carter breaks the mould with new payment plan

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The UK equipment finance industry has frequently been accused of lacking flexibility in the range of products it offers its customers. Hire purchase and finance leasing often fall short of allowing corporates the ability to seize opportunities to scale up as and when they occur – and permitting repayment capabilities to fit marketplace fluctuations.

Hitachi Capital Business Finance (Hitachi Capital) is seeking to redress this with the launch of its Smart Funding flexible payment plan. The aim is to allow small businesses to create their own bespoke repayment schedule for finance that reflects their cash flow forecasting and the seasonality of their business.

Gavin Wraith-Carter, Hitachi Capital Business Finance’s managing director explained that currently, when two-thirds (63%) of small businesses report late payment issues from their customers, and when 50% are experiencing significant seasonal fluctuations in their growth forecasts, the company recognises that many small businesses are struggling to achieve growth in the face of unprecedented market uncertainty.

Under the Smart Funding plan small businesses are able to apply to Hitachi Capital for loans of up to £500,000 online and get an instant decision in minutes on their application. They can then repay the loan back at their own rate by being able to use a feature which allows them to choose whether they intend to pay back slightly more, or slightly less, each month.

Wraith-Carter told Asset Finance International: “it is a way for SMEs to balance their asset purchase a little better against their cash-flows. The customer can fully tailor their payments and they are in control. Simplicity and transparency is our aim. It’s a sign of a lender listening to what customers want rather than dumping the product on a customer and saying ‘alright now pay for it’ ”.

Market uncertainty

The timing of the launch is significant. With Brexit only weeks away, Hitachi Capital’s latest Business Barometer research found that UK small businesses were striving to secure growth despite the challenging context of unprecedented market uncertainty.

Whilst the proportion of SME’s predicting growth during the autumn months was unchanged on previous months at 35%, a greater number of enterprises were considering new initiatives to achieve growth. Defensive measures such as controlling fixed costs 54% and cash-flow 34% were balanced by proactive growth measures – such as; expanding into new markets 22%, investing in new equipment 15% and reassessing finance commitments 12%. Wraith-Carter firmly believes that Hitachi Capital’s new flexible payments plan can tangibly help small businesses tackle all of these issues as they plan future growth.

Hitachi Capital’s UK total operation covers the widest possible range of asset lending while its Business Finance division, currently with an asset portfolio of over £1 billion, specialises in the transport, agriculture, construction, manufacturing, and materials handling sectors.

Hitachi Capital European Vendor Solutions is a key partner for Wraith-Carter’s Business Finance team. This division was launched originally in 2013 to fund specialist assets for Hitachi and Mitsubishi companies. Since formation, and under the auspices of managing director Dilek Mackenzie, it has grown from a team comprising three people, writing £10 million of business across three countries, to more than 20 people, transacting £242 million in 17 countries. This April it extended its reach by opening a branch office in Dublin to complement its operation in Holland.

On-going training and assistance

Wraith-Carter joined Hitachi Capital in 2013 as Head of Risk, promoting to his current position the following year. His background was in Risk & Compliance at ING Lease UK. So the importance of heeding the raft of regulation that the asset lending industry is currently facing is paramount amongst his thinking.

He added: “Some two-thirds of our business is sourced by a panel of around 250 intermediaries – a sector that is currently under great pressure on regulation and compliance. By way of support we provide on-going training and assistance. Most recently a tie-up with Compliancy Services Ltd has produced a series of webinars to ensure our brokers are properly equipped for the Senior Management and Certification Regime that will commence on 9 December this year.”

In addition Hitachi Capital is offering its brokers the opportunity to attend its Staines-Upon-Thames office to “get to grips with the operational side of the business”. Wraith-Carter confirmed that a Credit Clinic, a Digitisation/Automation Workshop and Vulnerable Customer training will be on offer to attendees as well as the chance to connect with several different teams and discuss a range of topics that may require clarification.

At the same time the company has offered some new entrants (Gen Z) to the broker community the opportunity to complete their work experience with Hitachi Capital where they are able to engage with a range of different aspects of the equipment finance business.

Aim for top 50 dealers

Hitachi Capital’s stocking facility proved to be a resounding success in the last 12 months with volumes increasing by 600% with some £210 million paid out and a year-end closing portfolio of £82 million. Wraith-Carter confirmed that the facility, which is not necessarily mandatory to include retail return, is available across most asset classes “although we do prefer to deal with the top 50 dealers in any given sector”.

All stocking products used by Hitachi Capital’s retail auto dealers are backed by Apak Group whilst its agricultural, ground-care and construction dealers also use IBCOS which forms a link between their system and Hitachi Capital’s.

One large user of Hitachi Capital’s stocking plan is Willerby, the UK’s largest manufacturer of holiday homes and lodges where stocking is used throughout the company’s 75-member dealer network.

Over the years Hitachi Capital has built on its core values of harmony, sincerity and pioneering spirit, to establish itself as one of the UK’s most trusted financial service providers. It currently holds a net promoter score (the management tool that can be used to gauge the loyalty of a firm’s customer relationships) of 75 – an exceptional figure rising way above the majority of high street banks and other lenders.

A positive force

Wraith-Carter, who also chairs the UK Finance & Leasing Association’s Intermediary Committee, stressed that over the last 12 months Hitachi Capital UK has placed emphasis on its role as a positive force on society, recording record levels of philanthropic and community involvement. This includes more than 700 hours of employee volunteering and, as a business, donating at least 0.21% of profit before tax to charity in the last year.

Over the years Hitachi Capital UK’s corporate success has relied on its divisional diversification – with no over reliance on any particular asset sector. With exceptional divisional heads such as Gavin Wraith-Carter in situ, its culture of prudence mixed with responsibility is an ongoing recipe for success.