Verdict Q&A with Anup Sangha

Anup Sangha, head of credit management for Asset Finance at Paragon

Jochen Jehmlich, CEO of SGEF discusses European asset finance trends.

1. What are your main priorities in your new role?

A key priority for me is ensuring that Paragon fully supports the entire SME credit spectrum, acting as a ‘one stop shop’ for these businesses. That will involve helping to develop a technology strategy to support a consistent experience for those that we support.

We are an SME lender, so my priorities are based around helping us support the growth aspirations of small and independent firms in the UK. My career has involved financing a whole range of assets from ships to lorries, so I’m looking forward to delivering consistent and timely credit decisions at Paragon for industries including construction, commercial transportation, aviation, business finance and technology.

2. What does you see as 2019’s major planning objectives for credit management?

We have quite a few objectives for credit and these include technology solutions and using the entire breadth of our risk appetite. We are continuing to build upon a robust data analytics capability to support decision making, so that is part of our planning objectives too.

3. How risky is the UK market now?

I would say that the current situation in the UK is uncertain rather than risky.

We have good data analytics and significant experience held by our underwriting team, who’ve operated through previous cycles and provide considerable insight and mitigation.

Extra time is also taken to understand the businesses we are dealing with, where required, and that allows us to have the best chance of supporting these companies’ ambitions. Ultimately, this way of doing things also helps businesses to thrive, which is what it’s all about.

4. Is leasing the best answer for the smallest businesses or are loans more appropriate?

The most important thing is access to diversified sources of finance. Businesses have got smarter since 2008 and are much better at aligning funding products to various elements of their balance sheet. That can range from invoice finance for working capital to hire purchase, finance leasing or operating leasing for fixed assets.

However, the Finance and Leasing industry still only accounts for funding 33% of such investment so there is clearly room for more diversification, which provides strength through times of uncertainty. Preserving banking facilities and accessing alternative finance, which is simple to obtain, for assets is a good business strategy.

5. What sectors are on the up?

We have been significantly increasing our support for SMEs over the past two years. In Asset Finance, the combination of organic growth and new acquisitions led to a 61% increase in new lending to £355m this year, up from £220m the previous year.

We’re evidencing uplifts across most of the sectors we’re involved with, be that construction, plant hire, transport and distribution, manufacturing or business services, including professions. At an industry level, the greatest increase in investment seems to be in the IT sector.