Industry Profile: Gavin Wraith-Carter, Hitachi Capital Business Finance – We are working to make finance more accessible

Hitachi Capital Business Finance is focusing on education and customer service as it aims to increase its share of the SME finance market.

Small businesses tend to shy away from asset finance and there are three key reasons why they don’t consider it as an option, according to Gavin Wraith-Carter, managing director of Hitachi Capital Business Finance.

He summarises the three factors as ‘access, awareness and fear’, with each playing its part in low take-up of business finance alternatives to traditional options, such as overdrafts, in the small business market.

Access relates to restricted finance options that face many small businesses that are establishing themselves and trying to fund growth.

They may struggle to persuade major banks to fund their expansion using traditional methods such as overdrafts and loans, while asset finance may not even be offered as a choice.

This links to the second issue of awareness, as many small businesses simply aren’t aware of the range of finance options available.

Wraith-Carter says: “It does come as something of a surprise that so few SMEs are actively shopping around for different funding options.

“SMEs should be more aware of the alternatives open to them. For example, around seven in 10 small businesses are not aware of asset finance as a tailored and competitive finance option, which is clearly reflected by the very small number of businesses looking specifically to secure finance for a vital business asset.”

The final factor influencing small business choices is a broad fear of new funding options, based on a lack of understanding and a lack of trust in financial institutions, particularly when it comes to the commitments being made when agreeing to a finance deal.

This has played a fundamental role in Wraith-Carter’s bid to provide more simplicity and clarity around funding documentation available to customers.

Among initiatives introduced at Hitachi Capital Business Finance is a new hire purchase agreement, with straightforward terms and conditions on the front page making it easier for customers to understand, which is designed to build customer confidence in their finance choice.

The agreement currently covers all unregulated deals below £50,000 alongside a simple and easy-to-understand application process.

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

Wraith-Carter says the move is designed to help small business owners dispel the ‘fear factor’ around new finance options.

He adds: “Sometimes it’s the little things that make a big difference for small businesses. Making hire purchase easier, quicker and giving reassurance that there are no complex terms will help business decision-makers consider this as an option when they are looking for the right funding to grow their businesses.

“Hitachi Capital Business Finance wants to make the road ahead clearer for British businesses and we are doing our bit to remove the fear and mystery behind hire purchase.”

Wraith-Carter, who joined the business in 2013, 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.

The business finance division currently has an asset book of more than £1 billion and around 40,000 customers, which Wraith-Carter expects to expand as the company grows awareness in the SME market that accounts for more than 99% of all businesses in the UK.

Growth will be driven by utilising internal networks with other Hitachi divisions and ongoing partnerships with its 250-strong national broker network, which has more than 600 advisors.

Wraith-Carter says brokers play a critical role in building knowledge and trust in the SME market.

He adds: “Most of our business comes from brokers. We see the broker market growing because of the advice and support they give and particularly their geographical spread, allowing a regional focus on business needs.

“It is important to get the message across that asset finance can be a good way to support business growth.”

He also argues that this personal touch will play an essential part in expansion, despite the development of online applications for finance that can see a business secure funding at the touch of a button

Wraith-Carter adds: “We need people to know who we are and what we can do for them. Although you hear of executing a £100,000 deal on an asset with a click, most businesses won’t do it. They need to have personal reassurance that they are making the right choice.”

This commitment to customer support includes a focus on training to educate the future generation of business finance advisors.

He says: “Some of the best ideas we have had come from the people who deal with customers. It is really open, we like to listen to our staff and also we like to develop them. Everyone wants to be listened to and everyone can be listened to.”

In addition to supporting a successful internal apprenticeship scheme, Wraith-Carter is chairman of the broker committee of the Finance and Leasing Association.

He was also recently appointed to the board of the Leasing Foundation, which aims to champion asset finance as a profession that attracts the highest calibre of individuals and develops talent.

Hitachi Capital Business Finance is a delivery partner under the UK British Business Bank’s ENABLE Funding programme that is building access to alternative finance options among SMEs and driving awareness.

Wraith-Carter adds: “There are a lot of customers who just want to be successful in their business and they are looking for one new asset which is a big investment for them.

“Talking through it, helping them with it, making it easy for them to fund it, that’s a great feeling.

“The most exciting thing is I haven’t a clue what the future holds, as the financial services market keeps changing. I am looking forward to continuing to build the business in future.”