Keynote interview with Jim Higginbotham, CEO of NACFB, set for AFC Summer Conference

At the Asset Finance Connect Summer Conference on 3rd June at County Hall in London, attendees will be debating how to increase asset finance lending to SMEs. To inform the debate, AFC will release key research conducted with 15 of the UK’s leading asset finance lenders — who are also AFC corporate members — attended an AFC workshop at Shoosmiths offices in London in April.

The results will be considered in three conference sessions each focussed on important elements of the debate: how to increase lenders appetite to lend; pain points in the SME lending customer journey; and opportunities to increase lending to market segments which are currently underserved (including lending to start-ups, women, and ethnic minority businesses).

Jim will be interviewed by Christian Roelofs, CEO of Finativ and AFC’s asset finance community lead moderator.

“Although 90% of SMEs approach their main bank first when seeking finance, over half of these potential borrowers in 2023 were unsuccessful. To make things worse most SMEs do not retry, and those who use the UK government’s bank referral scheme, designed to assist SMEs rejected by major banks by connecting them with alternative lenders succeed in only 5% of cases,” said Edward Peck, founder of Asset Finance Connect.

“The FLA have campaigned for a first-stop-shop to replace the Government referral scheme, but this has not been successful. The US Small Business Administration Scheme, a well-publicised Government support scheme which has been in place since the 1950s was recently criticised for taking too long and for the extensive paperwork which the Administration requires.

“Christian Roelofs will explore with Jim Higginbotham whether the broking industry can more effectively guide SMEs to the right lenders from the start — leveraging brokers’ inherent skills to match an SME’s specific needs with lenders who are ready to support them — and whether empowering brokers in this role might be a more effective strategy overall. SMEs overwhelmingly need support in accessing the right financial products from the right lenders; need support in assessing the lending proposals and when things go wrong they need an advisor who will help them to work with the lender to achieve the best outcome.

“There are of course some challenges. Many brokers are focused on specific products (very few asset finance brokers also broke invoice finance for example), the asset finance market drives brokers to success-focused commission schemes rather than remunerating them for providing support services to their SME customers and depressingly the effect of the Appeal Court which asserted that brokers have a fiduciary duty to their customers, has led advisory services of the sort that SMEs would seem to need to be increasingly viewed as high risk.”

The Asset Finance Connect Summer Conference will ask lenders and intermediaries from auto finance, equipment finance and asset finance to consider whether the industry needs to rethink its go-to-market approach to achieve better outcomes both for the industry and for its customers.

The asset finance stream will focus on how to increase SME lending; the auto finance stream will consider the results of an additional workshop scheduled for the end of April which focuses on what auto finance lenders need to do now to be ready for the Supreme Court decision expected in July, and the various options for redress which may follow; and the equipment finance stream will consider changes in alternative channels to market including embedded finance, emerging partnership arrangements between lenders, and other service providers to an ecosystem and manufacturers.

The conference will also extensively consider the emerging opportunities to leverage AI in the auto, equipment and asset finance industries through a series of workshops designed to focus on the tech, operational and strategic implications of this fast-moving part of the tech world on our industry.

Other participants in the SME stream include Richard Davies, CEO of Allica Bank; Richard Bearman, co-chief banking officer at the British Business Bank; and Anna Roughley, deputy CEO at the Lending Standards Board.

To find out more and book your place at the AFC UK Summer Conference on 3rd June at County Hall, London, visit the conference website.