Banks’ small business lending to be monitored

Business Secretary Peter Mandelson has announced the creation of a new panel to monitor how banks are lending to small businesses.

The five major high street banks reached an agreement with the government to provide data on the availability, risk and overall cost of lending to small and medium sized businesses at the first meeting of the Small Business Finance Forum.

Detailed talks will now be held with each of the banks to reach individual agreements on the provision of data to the panel.

The monitoring panel will be made up of senior Department for Business and Treasury officials and representatives from the Bank of England. It will monitor and enter into a constructive dialogue with individual lenders on the availability, risk and overall cost of SME lending.

The Forum also secured an agreement from the British Bankers’ Association to work with Small Business organisations to fundamentally revise the Statement of Principles which set out how banks and businesses work together.

Business secretary Peter Mandelson said: “It is critical we understand what finance is available for small businesses and this monitoring panel will give us greater insight into the situation at ground level.

“The panel, together with the revised Statement of Principles, shows a commitment to making progress on resolving the credit issues faced by small businesses.

“I want this Forum to make a difference. We have opened up a dialogue between SMEs and banks, and we will continue to work together to make sure we have the resources in place to see UK plc through this difficult economic climate.”

Banks, businesses and government also discussed the need to increase awareness of the support and information available to help companies to manage cashflow.

Consultations with business and finance organisations revealed a number of companies feel they do not have access to the right advice they need on financial management.

The Government, in partnership with the Institute of Credit Management, has produced a series of basic guides designed to provide this support direct to businesses. Forum members will now promote the guides over the next few months.

The Forum’s Terms of Reference and membership were also agreed at the meeting.

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ICE Commercial unveils funding line

ICE Commercial has launched its own funding line to provide SMEs with short to medium term business loans.

The commercial mortgage packager and debt management consultant says the move offers a “real alternative” to the current propositions in the marketplace.

ICE Commercial CEO’s Gary Starr said: “ICE has secured funds to assist our intermediaries and their clients. Our funds allow business owners to refinance and raise capital where they may have been turned down by conventional lenders due to a number of reasons; i.e. missed mortgage payments, adverse credit, LTV, no proof of income etc.

“The fund also allows those borrowers to secure the purchase of the many potential bargains out there in the market.”

Starr added: “Over the last few months, through packaging deals for our intermediaries, we have seen that lenders have flocked to the opposite polar of the spectrum and are turning away many good cases, leaving borrowers to fend for themselves. Whilst the market will remain tough well into 2010, we at ICE are very excited to get the product to market whilst trading conditions ease and liquidity returns to the market.”

InterBay acquired by 5D

InterBay Commercial has been bought by the 5D Group. It will be merged with commercial mortgage lender 5D and re-launched under the InterBay Commercial name.

Colin Bell, CEO of InterBay Commercial, said: “It is with great delight that I am able to announce an exciting new chapter for InterBay Commercial in the UK. Since our launch in 2006 we have experienced an amazing growth trajectory. We have created a great team, a strong brand and originated a portfolio of loans which are outperforming the market. It is testament to these achievements that we have been able to attract a new UK parent and provide a secure future.

“We now have a great opportunity to merge with 5D and re-launch our company – all with the strong financial backing of our new parent. We are entering the merger and planning phase, so I have taken the decision to temporarily cease new business. We have every intention to re-launch our lending products in the future. We have spoken with our intermediary Key Partners and are working through our pipeline to ensure all brokers and potential borrowers are treated fairly during this period of change. I cannot reveal our future plans at this juncture but I will say that this initiative is good news for the business.”

Re-brand for Davenham

Asset-based lender Davenham Group plc has completed a major new branding exercise, which took six months to develop and followed consultations with existing and potential customers and staff.

The font for the Davenham logo has been updated and now includes three boxes to represent thought bubbles, together with a new strap line “positive thinking in business finance”.

Printed matter and advertisements will carry images of young professionals using a variety of quotes. For example, “The bank thought my project was a risk. Davenham said it was an interesting opportunity.”

In addition, the colours used to differentiate the Property, Trade and Asset divisions have been dropped.

Davenham’s marketing manager, Ed Jones, said: “The focus groups reinforced our views that we do not think or behave like a bank,” he said. “It was therefore essential for us to communicate this and other key messages to our target audiences.

“We believe the new logo, together with the strap line, sum up the fact that we do not look for problems when companies approach us for finance, but instead look for solutions.”

David Coates, CEO of Davenham, believes the new brand represents an excellent investment for the Group.

“Although the banking sector may be going through a tough time at present we are still keen to provide finance against the full range of assets enabling businesses to grow and build on their success,” he said.

“While many lenders may be tightening their belts and becoming ultra-cautious, we still have £80 million to lend and the new brand reflects the positive approach we take when assessing funding opportunities.

“It certainly communicates a strong message and the powerful imagery and quotations will strike a chord with many businesses. I believe our new brand sets us apart from the competition and will definitely help to strengthen our position in the marketplace.”

NACFB welcomes Base’s pipeline commitment

Chief executive of the NACFB, Adam Tyler, has reacted to the announcement from Base Commercial Finance that it will be temporarily withdrawing from the market.

He said: “It’s a real shame to hear that Base is having problems, but it’s also good to hear that they have decided to take early action which allows them to honour their existing pipeline of business. This means that any broker, who has managed to secure an offer for their client, won’t have the rug pulled from under them.

“Base had recently restricted their distribution to selected brokers and NACFB members which means that hopefully any impact on application business will be minimal. As ever, if any NACFB member needs a pointer as to where to place any cases they can contact the Exeter office who can help. I would like to wish Base every success with their plans and look forward to welcoming them back to the market very soon.”

Business Lending sees benefit in NACFB days

Business Lending Ltd, the specialist commercial lender, has reported increased interest and response to its proposition at the recent National Association of Commercial Finance Brokers (NACFB) ‘Meet the Patrons’ event held in Solihull.

Business Lending was one of 37 NACFB patrons who were exhibiting at the event, which was attended by over 200 NACFB members.

Kevin Cooke, sales and marketing director of Business Lending, said: “The NACFB meetings like this always attract a high calibre of intermediary and this occasion was no exception. Unlike a large Expo, these ‘Meet the Patrons’ events are more intimate and allow us to really talk to new brokers and spend time with advisers with whom we already do business. For us it was also a timely opportunity to remind the intermediary that specialist commercial lending is alive and kicking.”

Adam Tyler, chief executive of the NACB, said: “This has been the most successful event of its kind we have ever run and the numbers who attended put paid to the rumours that the market has collapsed. Although times are tough at the moment, we had representatives from fourteen commercial lenders, including specialist lenders like Business Lending, who are still active in the market.”

Base Commercial suspends lending

Base Commercial Mortgages has temporarily suspended all new business activities.

In an email to brokers, Mark Stephens, Base’s chief executive, said the move was as a result of difficulties that the lender had encountered renewing its ongoing credit facilities due to the continuing deterioration in the state of the capital markets.

He added that Base does have “committed funds” in place until 5 September so it would be able to honour pipeline offers which complete before that date.

He said: “This is not a decision we have made lightly and I do hope you understand why we have had to take this course of action. The team at Base give you their commitment to work closely with you to ensure offers are completed as quickly as possible.

“I can confirm that Base continues to receive unwavering support from our investor, AnaCap, and over the coming weeks we will continue to pursue new funding lines so that we can resume lending as soon as possible.

“Thank you for all the support you have given us to date and please accept my apologies for any disruption this may cause your business. If you have any queries about pipeline business, please phone us on 01733 404518.”