This year’s National Association of Commercial Finance Brokers (NACFB) Expo was a hugely successful event. Staged at the NEC Birmingham in late June, the Expo attracted brokers from across the UK, all of them keen to connect with finance providers, network with their peers and participate in discussions about developments in the industry.
Of course, the event also provided an opportunity for lenders to set out their stalls and talk directly to the hundreds of brokers who were in attendance. Industry gatherings have a way of breaking down barriers and most providers also took time to connect with each other, perhaps to talk informally about the industry or to discuss any opportunities for partnership in the future.
From the perspective of The Route – Finance, it was heartening to see so many alternative finance providers taking stands. It was evidence that AltFi is now firmly established as an important part of the commercial finance ecosystem.
Over the years, the term alternative finance has been something of a moveable feast. A decade or so ago it was applied most often to specialist invoice and asset-based lending specialists who were providing SMEs – and also larger business – with access to debt secured against receivables, equipment or property. Today that side of the industry has entered the mainstream, and the term ‘alternative’ tends to be reserved for platform-based providers, including peer to peer lending and crowdfunding.
The rapid development of the AltFi marketplace over the past few years has undoubtedly been good news for brokers and their clients. That’s not simply because more sources of funding are now available, meaning that businesses have a wider range of funding options. It is now more possible than ever to secure funding from a lender (or in the case of crowdfunding, an equity platform) that aligns with the requirements of the business at any given time.
The Challenge of a Changing Market
The development of the industry, however, has also posed a challenge for brokers. The ever-widening range of AltFi platforms – each with their own business models and lending criteria – has created a bigger task for intermediaries, in terms of becoming fully conversant with the market. Arguably, AltFi providers face a parallel challenge. Not only must each company be aware of what peers are doing, it is also important to stay in touch with the requirements of the business community.
In that respect, the annual NACFB Expo plays an important role in facilitating a cross-current flow of ideas and understanding between providers and brokers.
In addition to the all-important networking, one key ingredient of this year’s Expo was the opportunity to attend talks and subsequent discussions around key industry issues.
Of particular interest to The Route, was a panel discussion on specialist lending. The Route – Finance’s model – structured around High Net Worth Investors committing pre-mandated funds, channelled to SMEs through a Private Debt Platform – lends itself particularly well to special situations lending, so the debate provided a chance to hear a diverse range of views.
Traditional and alternative finance were both represented on a panel that featured: Andy Bishop (Lloyds Bank); Wesley Harfield (Investec); David Furnival (NatWest); Tom Shave (Funding Circle); John Jenkins (Amicus); and Chirag Shah (Nucleus).
Perhaps unsurprisingly, the panel members didn’t agree on everything – a factor that made the debate more interesting – but what did emerge was a general consensus that the term ‘specialist lending’ is no longer particularly useful. Arguably, in the current marketplace, every loan is specialist. It was also interesting to hear differing – often highly divergent – views on the likely evolution of the corporate finance industry and the role of technology.
Over the course of the event, thousands of conversations took place. Representatives of The Route spoke to about 80 people, in all – most of them brokers but also a great many finance providers.
What came across most strongly is that most providers working in the industry see real opportunities to forge partnerships between companies offering complementary services. For instance, the majority of businesses that secure equity finance will also need access to debt funding. This opens a door for debt and equity providers to work together to provide a seamless service for SMEs.
The Alternative Finance Guide, 2017 Edition
A developing marketplace means that it is more important than ever for brokers to understand alternative finance options on offer. So it was appropriate that The Route – Finance chose the NACFB Expo to launch The Alternative Finance Guide – For Financial Intermediaries. Aimed at brokers and introducers, it provides an overview of the market, followed by profiles of the providers across market lending, crowdfunding, trade finance, asset-based lending and other sub-sectors.
On a day when the industry came together to connect, the Guide offered an important resource for delegates to take away and use to continue building relationships within the space.
Download the guide: https://www.theroute-finance.com/alternative-finance-guide-2017/