Martin Nixon, Head of United Trust Bank Asset Finance ("UTB") writes: Speculation about rising interest rates seems to have once again died down as UK inflation remains stubbornly low, and concerns remain about the stability of some of the world’s major economies. Probably a bigger consideration for many UK SMEs will be the likely outcome of an EU referendum. If the majority of voters decide that we will be better off outside of the EU, the implications of a withdrawal for British businesses, particularly those which export to Europe, could be far reaching. Businesses which have over borrowed on the back of lower rates and relaxed credit may come under further pressure if the spectre of rising interest rates returns, and those funders who have been stretching their criteria on marginal transactions may find some unwelcome surprises on their doorstep.
Rather than chasing volume in a race to the bottom, UTB’s approach has been to invite a number of our brokers to bring us the types of proposals they may have otherwise ruled us out for, perhaps because of preconceptions about rates and commissions. For stronger credits on appropriate deals we agreed to offer enhanced rates to compete with the terms offered by the funder with whom they’d usually have placed the business. We had been aware for some time that brokers frequently had customers who would really benefit from our service but were also extremely price sensitive. By giving us the opportunity to look at the deal and the customer’s circumstances, in many cases we have been able to take a view on rates which has surprised the broker and pleased the customer. We intend to continue this initiative in 2016 and will be widening the group of brokers who can benefit from this additional flexibility.
Something else we’ll be increasing this year is the time we spend with our existing broker partners and on building new relationships with brokers with whom we've yet to transact. Our horse racing days proved to be popular breaks from the office and this year we're planning further events in locations across the country. 2016 will almost certainly see our first hospitality day in Scotland with several events on the shortlist for a broker day north of the border in the first half of this year. Keith Sangwin, our Head of Sales, will be clocking up even more miles getting out to meet up with our BDMs and brokers both in their offices and at the various trade shows and Expos we plan to attend during the year.
By building closer ties with growing associations such as the NACFB we will be aiming to increase awareness of our products and services to broker members who may be new to us. It’s easy to fall into the trap of believing that every broker knows all there is to know about your business, but the truth is that beyond the relatively few brokers with whom we deal regularly, there are many who don’t know much about UTB at all. One differentiator, of which many of our newer broker partners were unaware, is that we don't have a restricted age policy for assets. Many were also surprised to learn that, unlike many of our competitors, we also have a strong appetite for re-finance and sub-hire business. Also, although UTB are perhaps better known for funding bus and coach, HGVs and plant, we also have a lot of experience at the opposite end of the vehicle spectrum funding high performance and classic cars. In fact one of our biggest ever loans was for the purchase of a classic Aston Martin.
Yet again we've set ourselves a challenging growth target for the year. We’ve posted 25 to 30 percent growth per annum in the last four years and we've no intention of taking our foot off the gas. By deepening relationships with our existing partner brokers, building relationships with new contacts and remaining committed to providing the best broker service and competitive pricing, I'm confident we can pull off five in a row.