Slides from Conrad Ford's speech at the Real Business Funding event on March 15th 2013 at the British Library

1. 13/03/2013
Business
finance update

2. Agenda
•What‟s really happening?
•What might actually help?

3. Finance falling fast, only question is why
Quarterly change in lending to SMEs
(6%)
(4%)
(2%)
0%
2%
Mid 2011 to Mid 2012
“Not
sustainable”
“Confidence
issue”
“Banks not
lending”
“Poor
business
skills”
?

4. It‟s the „big 5‟ banks fault, right?
A new and objective measure...
„Big 5‟
Banks
(53%)
Others
(47%)
Share of
secured
lending
activity
2011
...be wary of claims you read in the papers
„Big 5‟
Banks
(53%)
Others
(47%)
2012

5. What about the other lenders?
Retrenching
quickly overseas
Currently small but
growing quickly
In 2013, all about
the exit of ING
Much-
hyped, spike in
defaults
=
=
=
=

6. More funding choice than you might think
Around 30
commercial
mortgage
providers
More than 30
asset finance
providers
More than 50
invoice finance
providers

7. Agenda
•What‟s really happening?
•What might actually help?

8. Banks talk about their information
challenges: SMEs need to listen more
“Not even clear about
how much they want to
borrow & what it is for”
“Lack of evidence
of a customer’s
ability to repay loans”
Anecdotal Data
From recent press statements and the BRDC SME Finance Monitor
• Less than 40%
have management
accounts.
• Less than 30%
have a written
business plan.

9. The dominant banks need to get
behind trusted advice for SMEs
“Helping high growth
businesses raise
investment and obtain
business finance”
“Accredited
accountants familiar
with business finance
options, will offer advice”

10. A need for policy focus: most viable
firms simply don‟t have a problem
“Focus on micro-
business
financing, longer-term
& higher risk
applications”
“More beneficial to
SMEs if it was
focused only on
business lending”
On the „BIS-ness Bank‟ On „Funding for Lending‟
Sources: March 2013 FSB press release and comments by Steve Pateman to The Times

11. Tragically, working capital-hungry
growth firms are most poorly served
Financing Working Capital
Personal(!)
Credit Cards
& Overdrafts
Factoring &
Invoice
Discounting
Disguised Recent Example
• Growing business with
turnover ~£200k
• Landed a significant new
partnership
• Needed £50k to purchase
specialist equipment
• Invoices the main asset of
the business
• Minimum fees alone ~15%
of finance facility
One million
firms

12. Rapid technology changes mean
far more hope for the near future
New online financial world…
(global users)
Example 2012
2011
…of connected data
“Connected services
support business functions
...financial, ops, sales”
“Connected services...
builds on the company’s
position in cloud”2010

13. Thank you
“Makes multiple financing
options easier”
“Quick, automated
application & selection”
“Access to the right finance
products & providers”
“Supporting small firms..
a wide range of finance”