Specialist asset-based lender Ultimate Finance provided funding of more than £500m to UK SMEs in the first quarter of 2023, with new business volumes up 12% on last year and 320 new facilities to help keep business moving.
Portfolio highlights from Q1 include:
- Working Capital new business up 25% on Q1 22 as the demand for Invoice Financing solutions grows alongside a steady upward trend in existing facility utilisation rates
- New records being set in Asset Finance with total loan book size up 20% and new business volumes up 27%, including the highest ever month in March
- Bridging Finance loan book grown 28% in the last six months with strong demand for Refurbishment and Development Finish & Exit products
- Continued strong customer service metrics, maintaining a Trustpilot score of 4.9 and passing 700 reviews from both clients and introducers
Josh Levy, CEO of Ultimate Finance, said, “Reflecting on a first quarter that went by in a flash, we’re pleased with the rate at which we’ve been able to provide a growing level of funding to UK SMEs, with over £500m of total funding advanced and new business levels 12% higher than the equivalent period in 2022. The variety of the solutions we provide alongside our introducer partners is demonstrated by the wide range of facilities covered by the 320 new clients we welcomed during Q1, financing receivables in sectors from construction to hospitality and haulage; asset types such as cold milling machines, trucks, trailers and mobile cranes; and property transactions including auction purchases, refurbishment projects and development exit bridges.
I wrote previously about the impact of game changing events, specifically the rapid transition to a higher interest rate environment and material geopolitical shifts. Whilst the recent failures of banks such as Credit Suisse and Silicon Valley Bank brought back memories of the financial crisis in 2008, we don’t see significant systemic pressures and are not viewing this as a game changing event in the same way. That said, whilst the immediate banking crisis risk appears to be over, there will likely be a lingering impact in terms of a tightening of credit conditions with meaningful fund flows out of bank deposits into money market funds putting pressure on banks to hold back on some lending to households and businesses. These incidents have once again shown the hidden vulnerabilities that can exist in the stability of financial institutions and a reminder of the significant value that should be placed on a lender’s funding strength and liquidity profile.
Whilst the backdrop generally remains challenging, SMEs have – as ever – remained resilient and focused on growth opportunities, and the specialist lending market remains buoyant and liquid, with lots of capacity to lend as demonstrated by our volumes and those reported by others in the sector. Our loan book continues to perform well and whilst there are increasing examples of external factors putting pressure on clients, the ability to remain flexible and adapt requirements to individual borrower needs will keep enabling specialist lenders like ourselves to fill any funding gaps that emerge. Indeed, has shown that challenger banks and specialist lenders now make up 55% of total SME lending, the highest on record and the second year in a row in which market share has been greatest away from the big five banks.
A concern coming into this year is how SME demand for finance would hold up in the face of overall uncertainty and a higher cost of borrowing, but the adviser and broker community has played a key role in supporting borrower demand and giving businesses confidence to pursue available opportunities with the assurance that funding availability remains plentiful. We expect the rest of this year to remain focused on a greater use of strategic funding options to support working capital and investment needs, and we are confident in the value of our solutions such as Working Capital, Asset and Bridging Finance, as well as our asset-based lending Structured Finance option.
Speed, flexibility, personal relationships, quality service and funding certainty will remain our focus and we look forward to playing our part in keeping business moving for the remainder of this year and beyond.”