Green Commercial Finance: Opportunity or Opportunistic?

As soon as anything commercial adopts a ‘Green’ label it may raise suspicion that something opportunistic is going on.

So, because I am publishing a blog on Green Commercial Finance at the start of the week when the UN Climate Change Conference, COP26, starts in Glasgow, let me deal with that issue first:

My hope is that how topical the subject is this week may highlight the blog and gain a little more attention for the conclusion that I have drawn.

So like an activist I will shake up the order of things here and reach my conclusion for you at the outset: Green Commercial Finance is an opportunity to play your part, as a business, in the far larger collective effort that is required for us all to act on climate change together. As surely that is the only way that we will succeed.

I have heard many eminent scientists and experts detail the individual things that we can all do to help stop continued damage to the environment. And a common objection to taking these actions has been “but what difference can I make by doing that..”. But it feels like we are at a tipping point where millions of people are prepared to increase the actions they take, and action on that scale will have a positive impact.

The last generation has grown up in an age where doing the right thing for the environment has been cost prohibitive – from the cost of vegetarian alternatives in the supermarket, to the technology that you could use at home to reduce carbon fuel usage, like solar panels. While not fully there yet, the scale of demand for greener solutions to everything helps relatively quickly drive the cost of the choice down. Heat source boilers probably the next example of this?

And so we turn to Green Commercial Finance, and why you can and should look to access it.

First let’s cover the commercial issue – ‘what is it going to cost you?’ – at a time where even with the largest will in the world to play your part, it’s been a hard couple of years during the pandemic, and you are already seeing costs increasing from every angle.

The answer is nothing, and in fact the opposite. In any situation where your business is going to enter into the expenditure regardless, then Green Commercial Finance incentivises your expenditure to have a positive impact environmentally.

In a nutshell, your funding is discounted to incentivise you to do the right thing, and play your part.

Areas where incentives are available include, but are not limited to:

•       Property development – Tools to help to enhance the energy performance of new build, converted or refurbished property
•       Property investment – Enhanced rates applied to higher rated properties on energy performance, which are better for your tenants as well as the environment
•       Vehicles and transport – Funding for investment in low carbon and all electric, including supporting charging infrastructure
•       Reduction in waste and/or improvement in recycling ratios
•       Investment in infrastructure, machinery, plant, property and processes to lower carbon and greenhouse gas emissions
•       Investment to improve water and energy efficiency
•       Support for companies who deliver positive environmental impacts for regional areas and communities
•       Eco-efficient or circular economy activities
•       Waste management and recycling sector
•       Renewable energy – multiple subsectors including Solar, Wind, Hydro, Waste, Heat Pumps

A bit like the scale of the problem, there is a very long list of activities and types of investment that are covered under Green Commercial Finance – but I take great encouragement from the fact that there are so many ways for you to be rewarded for playing your part.

Far from an opportunistic blog to piggy back onto this week’s headline news about the COP26 conference, this is just the start of us playing our part by helping UK businesses source greener funding. And to be clear – we don’t earn anything more by pointing you in this direction, and in some cases it may be the opposite – but that is not what drives our work for you.

We are told that we are at the point where ‘putting change off’ will make that change too late.

Don’t put off playing your part – ask us how to use Green Commercial Finance in your business TODAY.

Mark Grant, November 2021.

mark@fiduciagroup.co.uk

What Is An Appointed Representative in Commercial Finance?

 

I guess that I should be clear what I mean when I say ‘Appointed Representative’ or ‘AR’ as it will be easier to retype many times here!

An Appointed Representative in financial services is a person or company that is authorised to carry out specific types of activity under the regulatory umbrella of another firm that is directly authorised by the FCA.

Why might you do that rather than be directly authorised yourself? Headline reasons are cost, together with monitoring, administration and reporting activities that comes with direct authorisation, and for which you are wholly responsible as an FCA directly authorised firm.

So as an AR of a company that is themselves directly authorised, your costs are lower and most if not all of the administration of your authorsation falls to your network provider – BUT that is not to say that you don’t have obligations to uphold.

As an AR network provider we are vouching for the person and firm that is an AR of our network – that you are solvent, reputable and trustworthy, and that you will uphold the regulations relating to the area in which you operate and carry out your business in a compliant manner.

In short, it’s our neck on the block!

Our own authorisation and reputation are affected by your conduct as an AR – so therefore we put the time in to ensure that:

·       you are trained in both our approach to clients and the areas in which you will operate

·       each case is conducted in a compliant manner

·       you access the necessary CPD and compliance training annually

The most common examples in the UK of AR networks are in residential mortgage broking. There are multiple network providers in residential mortgages – underlining how well the process works, and we see examples of one man bands up to 40 or 50 advisers where the model is beneficial to the business.

We have the good fortune to work with one of the largest, and in our (slightly biased?) opinion best, residential mortgage networks in The OpenWork Partnership. We are one of only a couple of partners that their residential mortgage brokers can introduce Commercial Finance cases to.

Which in turn brings me to our own AR network – the Fiducia Commercial Finance AR Network.

Being a Commercial AR on our network could be a full time self employed role or a part time role alongside your existing business – in other words it could be a totally new venture, or it could compliment your existing business and network.

To us it means a partnership and collaboration – we have a vested interest in ensuring that:

·       you are trained fully in all aspects of your role

·       you are aware of your compliance obligations, and you have the tools and systems to carry them out

·       you keep current in updates and changes in the commercial finance market and products

The partnership and collaboration goes beyond the set up, induction and kick off of your AR activities; we have a USP as an AR network provider that positions us head and shoulders above most of the market - we do the same job that you do!

The Fiducia CommercialAR Network offers you a cost effective route to authorisation and a lot MORE beyond.

·       MORE lenders and products on a whole of market panel where some funders only accept authorised brokers

·       MORE protection for your business with PI Insurance coverage

·       MORE access to your sector, lender and product information and personal development tools via NACFB membership

·       MORE choice and suitable solutions for your clients

·       MORE compliance, finance, system and admin support

·       MORE business support from the Fiducia broking team

·       MORE regular commercial finance news and views from industry experts

·       MORE lender and products updates + regular network BDM webinars

We are not a commercial finance brokerage that has just set up an AR network as a sideline without putting in the ongoing and long-term support.

We are not a franchise that takes a large up front payment in return for a couple of webinars and a manual that points you towards your promised six-figure salary – because believe me if it was that easy then that’s where I would be and not blog writing this weekend!

We are not ‘working the numbers’ and just getting as many people through the door because then dissatisfied leavers don’t affect us too much.

We are commercial finance brokerage that works with our ARs to provide them with the tools and support to enable them to help their clients – and not just at the outset, but on an ongoing basis.

Especially in the current period of recovery, and what we hope will be the worst of the pandemic behind us, support from a team experienced with getting deals over the line that aren’t always straightforward could be the difference to being a successful AR.

 

That’s what being part of the Fiducia AR Network could mean for you – being part of something bigger that you can lean back on for support in multiple ways whenever you need to.

Take the first step towards being a successful commercial finance broker by talking to us about the Fiducia Commercial AR Network.

Mark Grant, October 2021.

mark@fiduciagroup.co.uk / 07854 382700

‘Just-In-Time’, or Just Late? - We Can Fund Your Supply Chain

 

A supply chain blog hardly needs any introduction or context at the moment – you cannot turn on your TV, head to the supermarket or go to get petrol without having the issues front and centre in front of you.

Of course the majority of UK businesses aren’t in the petrol forecourt business or the supermarket game – BUT the issues around delays and inflated costs in supply chain are affecting virtually every UK company.

The UK supply chain landscape is suffering some chronic issues:

·       Costs increases in energy, raw materials, parts and stock can’t always get immediately passed on to customers

·       Staff shortages widespread in food processing, retailers, agriculture and hospitality to name just a few sectors

·       Wages for new hires and temporary staff spiralling, poaching and hiring bonuses prevalent

·       A shortage of drivers in logistics, and the cost of haulage and freight transport at record levels

·       Covid case levels stubbornly stuck in the mid to high 30,000’s daily for the third month

If major firms (with presumably deeper pockets than the average business) are restricting trading operations, imagine the effect these issues are having on SMEs broadly in the UK and the drain on their cash flow from long delays and far higher costs.

Your company needs suitable funding that fits in to the cycle of business and trade that you are doing.

·       Using cash for supply chain in this environment is not sustainable.

·       Taking a business loan to finance your supply chain just puts fixed payments immediately into the calendar – and you are probably starting to repay before you have been able to receive payment from end customers.

We help UK businesses fund their supply chain from within the UK and overseas with Supply Chain Finance and Trade Finance, and wanted to lay out how broadly it can help business in a variety of sectors in the UK economy – especially at the moment.

How can Supply Chain Finance and Trade Finance help you?

Let’s lose the common misconception first – Supply Chain and Trade Finance can be for stock, materials or goods sourced within the UK, as much as it can be used the purchase of raw materials and finished goods or parts internationally.

Trading with suppliers or manufacturers can begin with either an order from a client that you have to fulfil, or having to ‘stock up’ on the goods that you sell because your customers will expect a quick delivery after they make a purchase.

Depending on the nature of their business, companies either buy raw materials that they manufacture or assemble to create finished and saleable goods, or they will purchase ‘finished goods’ from a manufacturer or supplier – packaged and ready for delivery to their customers.

How can the finance be used?

Supply Chain and Trade Finance can be used to fit a wide range of business types:

·       Purchase raw materials or finished goods

·       Trade can be with UK based companies as well as overseas

·       Commonly finance companies are also experts in FX

·       Goods can be pre-sold, or to provide a stock for sale

Your business can improve prices and terms from having the backing of a trade facility and being able to pay earlier; Supply Chain or Trade Finance facilities can be flexible to accommodate deposits if required on order, and other costs including import VAT and freight / haulage if these are applicable to you.

Is the cost of taking finance justified for your business?

In the current environment companies need to conserve cash within the business as working capital can become strained without much notice.

Funding the purchase of goods or materials that are either pre-sold or to provide you with stock leaves crucial cash in the business to cover overheads and unexpected cash calls on the company.

This is especially true when supplementary costs like transport or freight may now be a multiple of what you had first budgeted for when pricing the project or order.

A common objection to arranging finance is the cost of the facility and funding these transactions; beyond the fact that lenders that we work with offer extremely competitive rates on their facilities, I would suggest that these are a great example of the ends justifying the costs of the means. 

The cost of funding will slightly reduce your margin on the transaction – but with very little effect on working capital, and consequently you are still able to meet other demands that you face – as well as to fulfil any opportunities that are presented to you.

If you buy materials or goods in the UK or from overseas, don’t let that be the reason you cannot accept new business or orders, or take up any new opportunities.

Why not get in touch and discuss how we can support you with suitable Supply Chain or Trade Finance options?

How do you want to be supplied?

Mark Grant, October 2021.

info@fiduciacommercialsolutions.co.uk  / 01636 614 014