Positive shift towards growth but money and time still an issue when it comes to training

The latest research by the Forum of Private Business reveals that small businesses are shifting their training priorities from replacing lost skills and are concentrating on areas essential for future business growth.

The report highlights an increase in the amount of growth-related training businesses are undertaking, particularly in areas such as strategic management and business development. In comparison to the previous year 2013 saw a 5% increase in training to build capacity and a significant increase in strategic skills development, rising from 16% in 2012 to 28% in 2013. Alongside these growth skills, the report revealed that the number of businesses engaged in efficiency training and skill replacement fell by 9% and 13% respectively, indicating fewer redundancies and a more stable workforce.

As business confidence has grown over the past year, satisfaction with training has also improved. Small business owners highlighted to the national business group that 75% of businesses were happy with the focus of their training in 2013 up from 58% a year ago.

Despite these positive signs Forum members did report a number of barriers to training and skills development indicating that not all businesses were able to take advantage of the improving economic conditions. Nearly a quarter highlighted time as a major barrier to skills development and about 20% noted cost.

Time management skills topped the list of skills negatively impacted by the recession. 12% of businesses reported these skills had grown worse over the last five years with owner managers forced to take on additional responsibilities as redundancies were made. 39% of businesses also reported senior management skills had been neglected with time and cost being the major reasons why.

With lack of time to dedicate to skills development and difficulties funding courses, the Forum’s research reveals that a fifth of small businesses do not know how to overcome the barriers they face to training.

This concerning statistic is timely given the government’s Growth Voucher scheme launching today. The scheme, that will part fund up to £2,000 worth of business support for small firms, will provide every eligible business with a diagnostic to identify what strategic support would assist their business develop and grow. Whilst not all businesses will receive a voucher, the Forum hopes to see the diagnostic provide small businesses with a clear understanding of the types of training they need to maximise their growth potential.

Commenting on the report chief executive of the Forum, Phil Orford said:

“Getting the right skills for your businesses is imperative for any firm to grow. Small businesses have faced tough conditions over the past five years but this report suggests they are beginning to lay the foundations for renewed growth.”

On Growth Vouchers:

“It is important now that we support our small businesses to use the tools available to develop and grow. Growth Vouchers will go part of the way to providing financial support for some businesses but it is essential we build awareness of the wide range of business support and advice currently available.”

The vouchers will be available in five key areas including employing staff, leadership and management and utilising digital technology.

Support the valuers to save the market

Lenders should help maintain the competitiveness of the valuation sector by instructing their solicitors to withdraw confetti letters to valuers, where no further action has been taken. This should help to make PI insurance premiums more affordable. Panel managers should also be bound to a code of practice to ensure market transparency, according to the independently chaired Commission into the future of the valuation profession.

The independent report, commissioned by RICS in response to acute concerns throughout the property industry, has announced a series of recommendations to help ensure that the future of the valuation profession is sustainable. The Commission chair, Dr Oonagh McDonald CBE, studied written and oral evidence submitted by representatives from across the insurance sector, banking community and property industry to address the balance of risk and reward, and how best to maintain high standards in valuation. These elements, at their core, are vital for underpinning economic stability and consumer confidence in the UK and overseas.

Further recommendations include:

• Valuers should be able to purchase PI insurance for individual valuations to help boost valuer numbers and better manage their risk

• Mortgage lenders should bear the cost of valuing a property during the purchase process

• Panel managers should be subject to an RICS-managed code of practice

Dr Oonagh McDonald, chair of the independent report, said:

“The commission was put together to make sure the property valuation market in the UK is fit for purpose and able to properly meet the needs of the general public. Having consulted extensively with people from right across the property, insurance and finance industries, I have come up with some recommendations to make sure this happens. I would like to see a change to the way that lenders charge for valuations and to ensure that those who actually assess a property’s worth are in a position to operate properly and are treated fairly. If valuation as a profession is going to be viable for years to come, lenders need to instruct their legal representatives to withdraw negligence claim letters if no action is being taken against those who value the property. Furtherm

An authoritative business banking report – huge choice and costs less than 20 years ago

An authoritative business banking report – huge choice and costs less than 20 years ago

In its 21st annual review of business banking, Business Money the industry journal in commercial finance and banking, has highlighted the wide, and ever growing, range of facilities available to the business owner/manager.

A highlight of the review, sponsored in 2014 by the Forum of Private Business, was that business bank charges have actually reduced over the last two decades at a time when all other overheads have risen, in the case of a first class postage stamp, by 140%.

Interviews with senior executives, Steve Matthews from an established provider, RBS/NatWest, and Jason Oakley, from a feisty newcomer, Metro Bank, offer a sharp contrast, but emphasise the choices in a fiercely competitive market.

Business Money editor, Robert Lefroy, commented: “The business banking arena in the UK is being reshaped by crowd lending, a continual stream of new challengers like TSB, Williams & Glyn’s, Aldermore, Shawbrook and more are arriving all of the time along with a host of hi-tech card-only account providers, trade financiers and invoice finance houses. The technology that has driven down business bank charges is now making far more flexible and accommodating lending facilities available to companies. As it is, 70% of all bank loan requests are being met with an approval and nobody wants to see the reckless lending that would create another raft of toxic loans.”

For a copy of the report please contact Sophie Grove on 01458 253536 or sophie@www.business-money.com.

Broker battle for help to buy mortgages heats up

Prospective property owners across the UK have been given a significant boost this week as a number of new and attractive help to buy mortgages have been placed on the market for them to choose from. The new deals are part of a price war that is emerging between some of the country’s largest mortgage providers as the final phase of the Help to Buy initiative comes into play.

Barclays is currently top the list of new offerings with its 0% fee and three year, 5.35% fixed rate offering representing great value for all young prospective homeowners out there. For those who wish to fix in for longer, Barclays also have a 5.49%, five year deal that is set to be released this week, and will enable borrowers to attain up to 95% of their property’s value due to the bank being registered on the government’s Help to Buy initiative.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The second stage has had a slow start, but as more lenders come on board, competition is driving a price war and pushing rates down. Lenders are offering more choice and improving the rates on offer, although they remain slightly higher than those for buyers with a bigger deposit.”

The second phase of the government’s flagship housing scheme was enacted back in October and has sought to revitalise a property landscape that has been stagnant since the start of the economic downturn back in 2008.

The scheme entails the government guaranteeing 15% of high loan to value mortgages given out to borrowers in return for banks lowering deposit requirements to 5% and distributing mortgages out of up to 95% of a houses worth. And its popularity and scale has increased dramatically in the past 3 months, with the initial 42 products being offered by banks expanding to 145 across a multitude of different financial organisations.

Another great Help to Buy deal is offered by Virgin Money, who at 5.39% for a three year fixed rate deal represent great value as well for anyone who wants to shield themselves from potential interest rate rises in the future. Similarly to Barclays offering there is no fee charged for acquiring the mortgage whilst a number of cash back incentives make it potentially more desirable that Barclays latest deal.

There a number of attractive offerings on the market currently that like Help to Buy have low deposit requirements. West Brom building society currently has a 90% loan to value offering that allows borrowers to fix in for two years at 3.64%, representing excellent value. Similarly Yorkshire building society offers a multitude of 95% loan to value mortgages with one particular 4.99%, zero fee, and three year deal particularly catching the eye.

The question however is whether you actually need a 95% loan to value mortgage, because whilst it might seem financially beneficial and viable right now, it might be far more difficult to uphold payments on time moving forward in the future. You should strenuously analyse your finances and see if you can contribute more from your savings when looking for a mortgage so you borrow less and end up paying less interest.

IGF unveils financial glossary for SMEs

IGF Invoice Finance has published a glossary of terms designed to cut through the jargon of the invoice finance industry. The glossary is a practical guide for small and medium sized business owners to help them make sense of the industry specific and widely varied terminology used by commercial finance providers.

IGF, an independent commercial finance company, is working with a range of SMEs across various industries, from manufacturing to construction to printing, to help them achieve reliable long term cashflow solutions based on agreements that all parties understand. The glossary has been developed from IGF’s years of experience as an antidote to the, sometimes jargon heavy, corporate financing sector.

Tracy Ewen, managing director at IGF, said: “Even within the invoice finance industry, the terminology can vary widely from each provider for what is essentially the same product or service. For finance to drive growth within SMEs, it needs to be based on an open dialogue between the business and the financial provider and a clear understanding of the agreement reached. When it comes to financing a business, eliminating ambiguity is a must, and in this case, it’s not difficult to achieve.”

To obtain a free copy of the glossary, please email: callmeback@igfgroup.com

Number of 18-24 year olds starting a small business doubles in the past 12 months

– Once bitten, twice shy: More than two thirds of business owners said they were unlikely or would never want to work for someone else again

– With great responsibility comes happiness: Two thirds of micro-businesses owners are happy or very happy being their own boss

The number of people between 18 and 24 either starting a small business or freelancing almost doubled in the past 12 months, according to a survey of micro and small business owners conducted by online freelance marketplace PeoplePerHour.

The figures revealed that the 18-24 year old demographic was the fastest growing age group on the PeoplePerHour website, with a 97% rise in new micro and small business owners registering on the website in the past year. The range of businesses they were running was wide and varied, but the top three sectors in terms of numbers were internet-based businesses, apps and retail.

As part of the survey, PeoplePerHour asked small business owners across all age demographics how they felt about running a business, especially in the current climate. More than two thirds (70%) said it was not easy and that the next six months would be make or break. When asked what they would do if the business failed, almost half had the ‘if at first you don’t succeed’ attitude, and said they would start another business.

It seems that being your own boss really does lift the spirit, however hard it gets or stressful it can be. Because, when business owners were asked how they felt about being their own boss, almost nine out of ten (87%), said they were happy or very happy with being in control of their own destiny. And more than half (54%) of those surveyed said they were never or unlikely to consider working for someone else again.

Asked why they started a business in the first place, a third (33%) of those business owners questioned said they started working for themselves for a better work life balance, more than a quarter (26%) wanted to pursue a hobby or passion, while 14% said it was because they were unable to find full-time employment.

On growing the business, when business owners were asked if they were looking to grow or consolidate over the next 12 months, the majority (78%) said they were keen to grow despite the adverse economic conditions.

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, said: “The barriers to starting a business have never been lower, and this could be one of the main reasons we’re seeing such a big rise in the younger generation choosing to take the self employment route earlier on in their careers.

“The key to this growing trend of new small business owners, not just amongst 18-24 year olds, but across generations, is how easy and cheap it is now to set up a business and build a client base from scratch. The emergence of online platforms like PeoplePerHour that provide access to a global pool of potential customers, just a mouse click away, as well as providing easy access to experts, means starting your own business is not as daunting as it once was.

“Our research shows that despite the stresses and money worries that are often associated with starting and growing a business, the rewards and overall satisfaction that people get from being their own boss, clearly helps overcome many of the obstacles standing in their way. The dream of being an entrepreneur is no longer just that.”

Value of the construction industry rockets by 67% in 12 months

· The value of new construction contracts awarded in December 2013 is valued at £6bn, a 67.1% increase on December 2012

· Infrastructure projects were accountable for 36% of the total contract value and data suggests this sector will continue to grow throughout 2014

· These figures are a reflection of an exciting year for the construction industry marking a significant period of sustained growth in activity in the UK, according to economists.

The value of construction projects in the UK has rocketed by 67.1% in the last year, according to a report published today. New project contracts awarded in December 2013 totalled £6bn, compared to £3.6bn in the same month in 2012.

The infrastructure sector proved to be an area of significant growth last month, with the total value of projects awarded reaching £2.2bn, a 10.6% increase from November 2013 and a huge 101.6% year-on-year growth.

These latest figures, taken from Barbour ABI’s Economic and Construction Market Review, also highlight sustained growth in the residential construction sector, which continues to be boosted by initiatives such as the Government’s Help to Buy scheme. The total contract value for December in this sector grew by 88.2% year-on-year.

On the findings of the report, Michael Dall, lead economist at Barbour ABI, said: “Residential construction remained strong throughout the latter half of 2013 and has truly spurred on the growth of the industry. In the most part, the increase in residential activity can be attributed to the Government’s Help to Buy scheme, but there are concerns that demand created by such schemes will surpass the rate of house building. This is a topic that will be the source of major debate over the next 12 months in the lead up to the 2015 elections.

“The performance of infrastructure as a sub-sector is also incredibly encouraging. The figures are a reflection of an exciting year of renewed optimism for the construction industry and, as a major contributor to figures for the industry as a whole, the sustained period of strong project values in this sector is good news and a key indicator for future growth.

“The National Infrastructure Plan, as published by the Government on December 4th 2013, updated the top 40 infrastructure projects in the pipeline for the UK, outlining a pathway for potential growth. An increase in new orders data recorded by Barbour ABI encourages me to suggest that the sector does have strong growth potential this year.”

As well as highlighting key sub-sector trends within the construction industry, data in the report also identifies regional variations in overall construction performance. Last month, Wales took the lead as the most prominent area, accounting for 19% of the UK total. This is largely attributable to an £800m waste treatment project announced in Clwyd, providing a huge boost to the figures. London accounted for 18% of all contracts awarded, while Yorkshire and the Humber and the South East were not too far behind, each accounting for 13% and 12% of the total respectively.

The Economic and Construction Market Review is a monthly report designed to give valuable, current insight into UK construction industry performance. The Review is compiled from Barbour ABI’s records of construction data for every UK planning application, and key indicators, such as the Office for National Statistics’ Construction New Orders data.

The Economic and Construction Market Review will be published monthly and is available to download at http://bit.ly/1eUKB9P

World’s largest P2P loan completed

· £4.1m loan to develop 110 flats in South London is biggest ever

· Over 300 investors to get 12% rate of return over 12 months

The world’s biggest peer-to-peer loan has been completed for £4.12m, it was announced today.

LendInvest, a peer-to-peer mortgage lending platform that lends to businesses secured against property, has provided the loan to a property developer to fund the acquisition of two adjoining commercial buildings in Croydon, South London.

The buildings have permitted development to turn the buildings into a 110 new residential units.

LendInvest, which was spun out of Montello Bridging Finance last year, has completed over £25m worth of loans since being established in May 2013.

Lenders will get a 12% rate of return – far higher than that offered by other well-known p2p companies – and will receive their money back within 12 months. The loan was provided by over 300 investors who provided sums from £10,000.

LendInvest now has almost a thousand investors that are participating in loans with amounts ranging from £10,000 to their largest investor who has put in £1.6m, with the average amount invested being £80,000.

The Croydon deal will help increase the supply of affordable housing in London and the regeneration of the Croydon area as the flats, due to be sold off-plan, will be priced between £200,000 and £250,000.

The developer in this transaction turned to LendInvest after they couldn’t secure finance in time from traditional lenders, illustrating the scale and flexibility of LendInvest when SMEs require funding.

Since being established LendInvest has paid lenders an average rate of return of 10.4%. Lenders are vastly diversified – from small institutions to professional investors to mums and dads

Ben Gilbert, an ex-City trader from London, has been an active investor on the LendInvest platform. He said: “Having had difficult experiences with banks, I know that it can be difficult to borrow money. Even when the chance of the lender losing money is low, borrowers sometimes just don’t fit one of the lenders’ tick boxes. LendInvest is making it more possible for more people to borrow.

“At first, I was quite sceptical. Given my financial background, my assumption is prices reflect risk – so, if a deal offers a high interest rate, the risks are too high. But I’ve become confident there are some good opportunities in the space with LendInvest.”

Christian Faes, co-founder of LendInvest, said: “This is big moment for the bourgeoning p2p industry, which is increasingly becoming a credible mainstream asset class for investors, as well as a source of funding for SMEs.

“Investors will secure a great rate of return and London will also benefit from an increasing amount of affordable housing. This deal is a real shot in the arm for the British alternative finance sector, which is fast emerging as a world leader.”

LendInvest has access to substantial deal-flow through its existing lending business, and has a proven track record of lending without losing investor’s money.

It is also the only specialist peer-to-peer platform specifically focussed on residential and commercial mortgage lending.

According to a report into the alternative finance sector, p2p finance has experienced huge growth in the last few years. £480m was raised through peer-to-peer lending in the UK last year, with a substantial portion of this funding going to SME businesses.

Metro Bank reports record growth

Metro Bank, the first new high street bank in more than 100 years, today announces its quarter four financial statement to 31 December 2013.

Craig Donaldson, chief executive officer, Metro Bank commented: “The revolution continues with substantial growth across deposits and lending, and most importantly customers, who continue to show their support by coming to us for their personal, business and private banking needs. Our focus continues to be on offering customers a community bank that provides the very best in service and convenience. As our store network expands across London and the South East, were offering more and more people a real choice on the high street, and were looking forward to welcoming ever increasing numbers of customers in 2014”.

Highlights for the fourth quarter ended 31 December 2013:

Total assets were £1,892m, up from £771m at the start of the year; an increase of 145%.

Total deposits were £1,315m, up from £576m at the start of the year; an increase of 128%.

Total loans were £755m, up from £168m at the start of the year; an increase of 348%.

Customer accounts across business and personal customers grew by 102% since the start of 2013, to 275,000 (285,000 to date).

The bank successfully raised £387.5m from existing and new investors. This fourth capital raise brings the total equity capital raised by the bank to £641m. The funds will be used to support the rapid expansion of Metro Bank, including its retail, commercial, and private banking businesses.

Following the completion of the capital raise in January 2014, Metro Bank has a leverage ratio of 25% and Tier 1 capital ratio of 63%.

Store expansion and growth remains strong, with 25 stores currently open to customers across London and the South East. In Q4 new stores opened in Kingston, Cheapside, Windsor and Edgware, and most recently the bank opened in Milton Keynes (17 January 2014). Up to 12 new stores are planned for this year including communities in Epsom, Brighton and a second store in Milton Keynes.

To date Metro Bank has created more than 1000 jobs in the South East, with an additional 500 jobs to be created in 2014.

As a result of its growth initiatives and substantial investment in people, culture, facilities and premises, Metro Bank incurred a planned operating loss in the fourth quarter after tax of £10.8m. The banks losses will continue to decline quarter on quarter until it reaches profitability.

China – UK trade reaches record high

China – UK trade reaches record high

Commenting on remarks by the Chinese ambassador, Liu Xiaoming, that UK-China trade had surpassed £43bn last year, TheCityUK’s chief executive, Chris Cummings, said: “This is great news and I have no doubt that it will be confirmed by the UK Office of National Statistics later this year. Our bilateral trade with China has been growing steadily, including in my own sector, financial services.

“TheCityUK is committed to working with its member companies to build ever stronger links with the world’s second largest economy. We want the UK to be at the centre of the developing Renminbi trade and are keen to help the Shanghai free trade zone become a success.”