Welcome to the fourteenth
edition of Leasing Life’s digital briefing magazine.
In the northern hemisphere, August is typically a time for taking a break from the office to recharge one's batteries before returning to the office to fine-tune, and then execute, the business plan going into the new year.
But, in a year dominated by Covid-19 many of the chief assumptions in achieving the business plan have gone out the window.
For legions of office workers in financial services across the UK, everyday things such as commuting to work, sitting in an open-plan office, meeting colleagues face-to-face, shaking hands and gathering by the water cooler are now but a distant, if quaint, memory.
Equally, abstract notions such as ‘the health of the nation’ have taken on new meaning.
Meanwhile, in a relatively short space of time, we’ve seen a global health pandemic threaten the industrialised nations with a full-blown financial crisis, which has, in turn, precipitated a crisis of the wider economy, which may yet trigger a larger political crisis the longer this goes on.
The Covid-19 rollercoaster has left few lessors untouched and many have intriguing stories to tell about adversity and overcoming odds, challenges and setbacks, cutting losses and moving on, and taking one’s chances and seizing the moment.
Our first article looks at Latitude Leasing, an independent lessor based in Manchester, England, with a staff of five. We explore its journey from its pre-Covid birth in June 2019 to the present, offering an insight into its family leasing roots and its struggle to hold on to its earlier trademark (Libra Leasing) against the wishes of the Libra Association, a Facebook offshoot with plans for a cryptocurrency of global proportions. (See, ‘How Facebook’s cryptocurrency threw independent lessor temporarily off balance’)
At the core of finding solutions to the many Covid-19 issues faced by UK lessors, big and small, is the sector trade body, the Finance & Leasing Association, and key to its strategy is its recently unveiled ‘Shaping the UK’s prosperity: recognising the opportunities for recovery’.
For the FLA’s plan to succeed, the government will need to adopt an ambitious programme of legislative reform, alterations to existing funding schemes and changes to business taxation. (See, ‘FLA’s recovery blueprint adds missing pieces to Chancellor’s budget offering’).
Changes by the EU to State Aid Law should spell good news for UK emergency funding schemes, such as the British Business Bank’s Coronavirus Business Interruption Loan Scheme (CBILS) which offers small businesses a gateway to asset financing through what for many struggling SMEs has been a term loan offering to date. (See, ‘Small business access to CBILS expected to grow following EU change to state aid rules’)
For many observers, the longer the current business environment persists, the more likely that overleveraged or underfunded businesses will be forced to make tough choices about survival and under what terms they are prepared to do so, leading to a wave of anticipated consolidation once loan subsidies and grants are scaled back and staff furloughing is tapered off. (See, ‘Invigors EMEA and GrowCap to offer M&A advice to asset finance providers)
Meanwhile, making funding available for developing areas of the economy will be key for leasing stalwarts, such as Bibby Financial Services which has signalled the way forward with a funding line for an up-and-coming hygiene products producer. (See, ‘Hygiene firms look to clean up with £4m Bibby funding line’)
Finally, let’s not forget the often neglected foot soldier, the asset finance broker. The National Association of Commercial Finance Brokers (NACFB) has recently reported a rise in membership numbers in the midst of the coronavirus outbreak. (See, ‘NACFB surpasses 2,000 individual broker milestone’).
Enjoy the summer break!
Alejandro Gonzalez, Editor