Andrew Curry of Aldermore Invoice Finance (26.11.12)
Aldermore Invoice Finance.
Introduction• Introduction to Aldermore Bank and its offerings• Mechanisms and benefits of Invoice Finance• How we believe we can work together with you• How the security works• Our Approach• Lender of last resort??
Aldermore Bank• A new name in British Banking and one of the most strongly capitalised banks in the UK• Borne out of the merger of Ruffler Bank, Cattles Invoice Finance and Base Commercial Mortgages in 2010.• Owned by AnaCap Financial Partners LLP (Private Equity) and backed by Morgan Stanley Alternative Investment• Lending activity focused on SME‟s• Very successful at growing customer deposits; now have over £2 Billion in deposit, the majority of our lending to SME‟s• UK Wide - 500 Staff / 1,100 Invoice Finance Clients / 60,000+ depositors / 4,000 Asset Finance / Mortgage Customers
Products.Invoice Finance• Invoice Finance (Fully Managed)• Combined Invoice Finance• Invoice Discounting - Disclosed and Confidential facilities• Credit ProtectionAsset Finance - Hire Purchase, Sale & Lease Back, Short – term professional loans, Materials Handling and Agricultural Plant, Construction and Engineering Equipment etcResidential Mortgages – Buy to Let, Repayment or Interest – only mortgages, up to 100% if secured on another buildingCommercial Mortgages – from £25k to £2m, 5 to 20 yr terms. 70% loan to valueSavings – Private and SME savings. Excellent commercial rates and has shown great uptake and success – effectively the fuel for our own business
How Invoice Finance works• Lending to the SME Sector; turnover £100k to £30m• Using the asset which is the sales ledger to lend against; effectively using un-tapped resources to raise cash.• As soon as client has “B2B” invoice, we have something to lend against and raise value. Flow of cash increases as sales increase• Often provide sales ledger management/credit control in the background• Often improve “debt turn”, performance of sales ledger, reduce bad debts
Benefits of Invoice Finance• Excellent funding to assist growth – where client would otherwise not be granted Overdraft or Loan funding. Existing businesses or new start.• Cash flow is King! Particularly in the current climate – we bridge the “cash flow gap”• Client can concentrate on their business knowing that they have cash backing in line with their success; and taking the pressure off the customer management and credit control• Means client can sell their own product/service with confidence
How we can work with other lenders• Aldermore happy to sit alongside other lenders.• Can give (each other) confidence in a business by showing lending support.• Funding these days is often more structured; more parties involved and clients prefer a funding mix.
Security• We take an assignation of the book debt backed by a Bond and Floating Charge• However, where one lender is in place, the other will give waiver (via letter or ranking agreement) to allow security for the other lender over the assets of the company (excluding the book debts).• Directors PG ( uncapped or capped)• Indemnity
Market Opportunities and Hurdles• We fund businesses in the following stages:• Start-Ups• Existing trading companies• Expansion• Acquisition• Management Buy Out/Management Buy In• Re-FinanceSome hurdles for us:-• Market awareness of the name• Assumption that “no-one is lending” and there are few sources of funds available
Suitable Sectors• Engineering• Manufacturing• Road Haulage• Printing• Temporary Recruitment• Manned Security• WholesalersWe look at any sector and if the invoice paperwork is complete and strong then we would look to offer a facility.
Our approach.• Packaged facilities to suit SME‟s funding requirements• Local network of offices to work alongside introducers and clients• FSA Regulated - for deposit taking / mortgage contracts• From £25k to £12.5m funds out• Quick turnaround for deals• Easy to do business with• Personal and tailored service• Traditional values• „Can do‟ approach for SMEs• First Class, local service
Lenders of last resort??• Historical stigma – “factoring” a dirty word• 45,000 SMEs now use invoice finance in preference to OD• Used increasingly by larger more established businesses• We “chase” all household name type debtors. Reputational concerns are unfounded• Lenders of ONLY resort rather than lenders of last resort
SUMMARY• Overall, we are a “positive lenders” in a market that has great potential• Keen to work together and to see if we could assist your clients• Commercial approach and “can do” attitude• Using inherent value within a business to raise funds; or assist growth•Q uestions?