UK businesses will prioritise reliable service ahead of best price when choosing a funding provider during the recovery, according to an industry think tank hosted by premier Invoice and Asset Based Lender Venture Finance. Recent experiences ranging from a lack of available credit to the withdrawal of facilities with little or no warning will cause firms to consider other, more relationship-based, funding avenues.

This conclusion is detailed in the white paper, “The Evolution of Invoice and Asset Based Lending”, based on the corresponding industry think tank. Attendees included representatives from the Asset Based Finance Association, KPMG, the Federation of Small Businesses and the South East England Development Agency. Professor Nigel Waite, head of the Financial Services Research Forum, chaired the debate.

The white paper reports the consensus that Invoice and Asset Based Lenders’ ability to build a robust and long-term business relationship is based upon a deep understanding of a client’s operations, and provides the industry with a defining USP, one of particular relevance to businesses in the current financial landscape.

Peter Ewen, Managing Director of Venture Finance, comments: “Our industry’s relationship-based approach has remained consistent. Battle-weary businesses are entering this new financial era with a changed perspective on their lending requirements, seeking to make the relationship they have with their financier a top priority. Many businesses are finding traditional methods of funding, like overdrafts, are not appropriate anymore.

“Regular, two-way communication is essential to the development of a productive and longer-lasting business association. Impersonal, automated decisions from a computer are simply not acceptable in this climate. A funding partner that knows a business intimately and can often pre-empt any potential issues or opportunities arising can also act quickly and appropriately on the client’s behalf.”

Professor Nigel Waite, head of the Financial Services Research Forum, comments: “As well as proving its worth as a reliable source of working capital, ABL has also demonstrated that service features rank highly as core components of its proposition to business. Indeed, ABL adds considerable value to a business through the ways in which it validates the robustness of a client’s business model and operational performance. In this way, it should be viewed as being an endorsement of the business and be sought after as such. Trustworthy, value-added services mark ABL out from the more distant and remote sources of finance that are on offer from the banks.”