Hitachi Capital Business Finance plans to double in size after landmark year

Gavin Wraith-Carter, managing director of Hitachi Capital Business Finance, said: “We have achieved double-digit growth in the past year. We achieved a £1 billion book last year and the next challenge is £2 billion, doubling the size of the business in three to four years.”

To achieve its aims, business relationships will be key, both with its network of hundreds of brokers and through close direct relationships with end-user business customers.

According to Wraith-Carter, the key is understanding their needs and working in partnership to support business growth.

This requires strong one-to-one relationships, something that will be a critical element of business success as the UK undergoes historic change in the coming years as the Brexit negotiations reach their conclusion.

Wraith-Carter said: “Our research shows that SMEs are still expecting growth and they are getting more confident.

“To enable our growth, loyalty is a significant driver. We work with our partners for the long-term, finding out how we can help them and understanding what is keeping them awake at night.

“It is great to see when a big investment takes them into the next league in business terms.”

This strong understanding of business needs has also driven innovation at Hitachi Capital Business Finance, with Wraith-Carter last year introducing a new simplified hire purchase document that offers straightforward terms and conditions, removing swathes of clauses to make it easier for customers to understand what they are agreeing to.

The initiative follows small business research by the company which found that only 3% of decision-makers had used hire purchase in the past 12 months.

Wraith-Carter said: “When SMEs look at documents now, they are not so scary. There is still a fear factor about external debt, but the message is getting across.”

When Hitachi Capital Business Finance asked more than 1,100 small business decision-makers about how they planned to grow their business in the next 12 months, 43% said they were relying on finance as the foundation of their plans.

Among those predicting significant growth, 65% said they will have to put various growth plans on hold if they are unable to secure appropriate funding.

A lack of access to funding will also directly hold back any plans to open up new markets (16%) and diversify product offers (23%).

While there is an increasing focus on digital solutions in the industry to efficiently meet this demand, face-to-face meetings will continue to play a critical role in developing an understanding of an SME’s business and the potential impact of an investment, which may not be understood on paper.

He said: “Software is excellent in some areas, but some elements do not come through on paper. If you visit the factory you may see a different story.

“You can use software to ‘top and tail’ the straightforward decisions, but in many cases, it is important to engage with customers so you understand what is happening in the market.

“SMEs like to deal with people. That is very much the SME mindset because their own success is often built on relationships.”

In addition, future developments in regulation must recognise the need for businesses to be able to finance without feeling too constrained by legislation.

“If an SME has been in business for 20 years and has a high appetite for risk, then I am not sure they will want the regulator to be involved that much,” he said.

Wraith-Carter, who is chairman of the broker committee of the Finance and Leasing Association and a board member of the Leasing Foundation, leads one of four divisions that are part of Hitachi Capital UK, including Hitachi Capital Consumer Finance, Hitachi Capital Invoice Finance and Hitachi Capital Vehicle Solutions.

He says growth will be driven by utilising internal networks with other Hitachi divisions and ongoing partnerships with its broker network, which has more than 600 advisors that play a critical role in building knowledge and trust in the SME market.

This support network will be essential as UK businesses negotiate the uncertain path towards Brexit, while planned developments to encourage growth will include expansion of the stocking and wholesale finance offering from Hitachi Capital Business Finance.

Wraith-Carter said: “We want to make the road to growth clearer for British businesses.”