All commercial finance Expo stands sold out

All exhibitor stands are now sold out for the 5th NACFB’s annual Commercial Finance Expo, being held for the fifth year running. With less than four months to go before doors open at the Pavilion at Birmingham’s renowned NEC, the NACFB is having to investigate options to expand the size of this year’s show, and is aiming to make a number of new stands available to those who would like to exhibit but have been caught out by the rapid and enthusiastic take-up.

There are now more than 100 lenders registered with the NACFB for the first time in the Association’s history, and last year more than 1200 visitors turned up on the day. This goes some way to explain why the NACFB is having to knock down walls to build an event big enough to match the appetite and expectations of lenders, brokers and small business owners across the country.

Doors for this biggest industry event of the year open at 9:30am on Wednesday 25th June. As every year, it’s free to attend, and as well as being an event where deals get done and genuinely useful contacts get made, it’s also a lot of fun.

Interested exhibitors and delegates should register online at www.commercialfinanceexpo.co.uk

£2k a month savings on fuel with a prepaid card

Lutterworth Logisitcs Ltd (3L) is a rapidly growing courier-haulier based in Leicestershire operating approximately 40 vehicles. 3L had been using traditional fuel cards to pay for fuel. In December 2013, they signed up for the Bread4Business prepaid fuel card and have since seen significant savings on fuel of up to £2k a month.

Bread4Business prepaid fuel card’s aim is to ensure businesses are kept moving without restrictions with the added benefit of using the card to pay for on the road expenses.

Saul Butler, managing director, Lutterworth Logistics, said: “Bread4Business Prepaid MasterCard provided us with a cost saving solution to the traditional fuel cards we were using. With no restrictions on where our drivers purchase fuel meant that we are able to advise on which fuelling stations to use with the cheapest rates of the day. Purchasing anything up to £45k a month on fuel we are seeing significant savings between £1.5- £2k a month and would highly recommend this product to other companies that have fleets.”

CBI responds to Deputy Prime Minister’s speech on opportunities for young people

The CBI responded to a speech from the Deputy Prime Minister, Nick Clegg, which proposed a UCAS-style system for young people who don’t want to go to university and other measures that will boost opportunities for school leavers.

Neil Carberry, CBI director for employment and skills policy, said: “The CBI has long called for a UCAS-style system for vocational qualifications. This is a major step forward in making vocational routes more visible and will help put it on a level footing with more traditional academic routes.

“Supporting 16 and 17 year olds through Jobcentre Plus to break into the world of work is overdue. With too many young people still unemployed Jobcentres will need to hit the ground running and tailor help to meet the needs of the local economy.

“The Government is right to focus on improving careers advice as it remains on life support. Schools cannot do it alone and employers have a key role to play in inspiring young people and preparing them for the workplace.”

February sees consumer confidence stay at the same level

GfK’s UK consumer confidence index has stayed the same this month at -7. Of the five measures used to calculate the index score, two measures have decreased this month, two measures have seen increases and one measure has stayed at the same level.

Nick Moon, managing director of social research at GfK, commented: “After the substantial six point rise in the Index last month, holding steady, rather than any form of correction, is good news. Just a year ago the Index stood at -26, so the current level is massively better. Taking the whole history of the Index from 1974, the current level is slightly ahead of the lifetime average of -9.”

UK consumer confidence measures – February 2014

The overall index score has stayed at -7 this month. Of the five measures used to calculate the index score, two measures have decreased this month, two measures have seen increases and one measure has stayed at the same level.

Financial situation

The index measuring changes in personal finances during the last 12 months has decreased one point this month to -13; this is seven points higher than February 2013. The forecast for personal finances over the next 12 months has increased one point this month to four; this is nine points higher than this time last year.

General economic situation

The measure for the general economic situation of the country during the last 12 months has increased three points this month to -17; this is 35 points higher than February 2013. Expectations for the general economic situation over the next 12 months have stayed the same this month at two; this is 27 points higher than this time last year.

Major purchase index

The climate for major purchases index has decreased one point this month to -11; this is 15 points higher than this time last year.

Savings index

The now is a good time to save index has decreased three points this month to -12, which is eight points higher than February 2013.

How UK retailers are harnessing trends in bricks and clicks to increase footfall

Almost 90% of UK retail purchases still take place in physical stores today – and contrary to what many had predicted, online commerce has not signed the death warrant of shops and stores. However, retail brands are increasingly learning how to leverage digital tools to drive in-store sales, from providing information (store locators, product locators), to preparing a sale by allowing customers to book a product or an appointment online, to paying for their purchase ahead of time with click & collect.

To shed light on this changing landscape, Solocal, a European provider of local digital marketing services with over £800m in revenue in 2013, today held a morning conference at Centre Point Tower in London. The event gathered eight different speakers from within the Solocal group as well as from the Local Data Company, IMRG and Local Social Labs.

During this conference, experts revealed the top five current trends in bricks and clicks, giving retailers important insights into how they can seize online opportunities to draw customers into their actual shops.

Mobile is a key focus

Mobile is quickly becoming the dominant way to reach customers – nearly one-third of web-based page views in the UK now come from smart phones and tablets. However, too many brands still need to improve the mobile offerings they make to users. Revamps need to include multichannel and transactional functionalities, as store locators are merely a starting point. The rise of mobile is clearly opening the door to targeting, promotion push, m-commerce, mobile payment, loyalty and more. These opportunities will only become more crucial as wearable tech becomes more popular in 2014.

Leverage online content and social media

More than ever, consumers are going online as part of their decision making process. Retailers have done a good job understanding this and more often than not, have jumped on the social media bandwagon and created their own content.

Visuals are fast becoming a must-have asset in a brand’s digital arsenal, as proven by Pinterest’s success and higher conversion rate. Brands know they can enhance their image and boost their products’ attractiveness in an unrivalled way through the use of quality visuals.

Store locators are moving from being considered a mere commodity to an essential in-store traffic generator that can help maximize conversion by providing customers with useful content such as product inventory, promotions and other calls-to-action.

Finally, brands need to scrutinise their e-reputation, both to be aware of customers’ feedback and to ensure they make a good impression on potential new customers. Be it ratings and reviews left on social media or transactional websites, it is crucial for retailers to listen to what their customers say about them, and use any complaints as an opportunity to demonstrate great customer service.

Moving from targeting to hypertargeting via big data and social

Retailers will be able to leverage increasing quantity of behavioural and attitudinal data on digital users to better target their advertising campaigns. Mobile innovations such as geofencing, NFC, in-store wifi, augmented reality and bluetooth low energy beacons will allow brands to push the right message (promotion, product, ad, event, etc.) to the right customer, at the right time and the right place. Brands could also customise how their websites are displayed to fit customer’s specific tastes and interests.

Enhancing the in-store experience with technology

Facing competition from many pure e-tailers like Amazon, click-and-mortar retailers will need to boost their user experience from good to great.

Multichannel solutions can help in many ways: click-and-collect for products, online appointment booking for services and in-store tablet interfaces that take the hassle of searching and queuing out of the shopping experience. For the same reasons, retailers will increasingly look into accepting in-store mobile payments and creating automatic loyalty programs that can add points from the simple swipe of a mobile device.

Omnichannel and multichannel – must dos

In 2014, more retailers will make an effort to give customers the choice to complete transactions on their own terms. In other words, if a customer views an item online, wants to buy it from his smartphone, have it delivered to a locker near his work and return it by dropping it in the store, it must be not only be possible but an easy, smooth and seamless experience.

Click and collect, which today accounts for nearly a fifth of multichannel sales, will continue to grow, prompting retailers to add product locator functionalities to their online stores and store locators. Appointment booking services are expanding beyond hotels and restaurants and extending to all types of services.

A recent study found that 34% of UK consumers were found to look at a product online before making a purchase in-store, a trend called reverse showrooming. Retail players are set to turn this threat into an opportunity by adapting their online and in-store pricing strategies to bridge the gap with e-commerce pure players.

Bruno Berthezene, Solocal Group UK managing director, said: “The way retailers are using technology, and the web in particular, is evolving rapidly and profoundly changing their business. Retailers have a unique opportunity to provide a superior service by taking advantage of the influence digital has on the purchasing decision – therefore getting ahead of their online and offline competitors.”

New direct GNER rail services proposed from London King’s Cross

Great North Eastern Railway, has today announced its application to introduce a new direct express train service on the East Coast Main Line (ECML) between London King’s Cross, and stations in West Yorkshire and Lincolnshire to commence in December 2017.

The key features of this GNER proposal are:

– A two-hourly service to Leeds calling at a new East Leeds Parkway station

– Six trains a day continuing to Bradford and one to Ilkley, all calling at Kirkstall Forge,

– An important new commercial and residential development

– Up to four trains a day to Cleethorpes via Doncaster, Scunthorpe and Grimsby, restoring – direct links between Humberside towns and London

– Investment in a fleet of new Hitachi Super Express 140mph capable trains, a total investment of at least £130m

– More than 160 new jobs created for this operation, plus significant wider economic benefits across the towns and cities served.

An Yeowart, managing director of Alliance Rail, GNER’s parent company, said: “This – proposal is an important opportunity to further strengthen and grow the UK’s rail network. It will bring significant private investment to the industry; improve transport for passengers by delivering direct inter-city rail services to many new areas, and support government aims to generate wider economic benefits and future opportunities in the North of England.”

Sentencing guidelines for environmental crimes published

The Sentencing Council has published new guidelines for judges and magistrates to deal with environmental offences.

Covering a range of offences related to the disposal of waste mostly covered by the Environmental Protection Act 1990 and the Environmental Permitting (England and Wales) Regulations 2010, the rules will be used in courts from 1 July 2014.

The introduction of the new guidelines is designed to ensure courts in England and Wales take a more consistent approach when dealing with environmental offences.

It is the first time that the Sentencing Council has provided guidelines for offences including fly-tipping, waste handling and pollution in relation to noise, smoke and dust.

The Sentencing Council believes that the guidelines will encourage magistrates to make greater use of the highest levels of fines. It states that financial penalties for lower level offences will remain largely unaffected but adds that fines for businesses will also be determined by their size.

The guidelines follow a public consultation in 2013 which took into account views from judges and magistrates, lawyers, environmental professionals and local authorities.

Following feedback during the consultation process, separate guidelines for offences committed by organisations and those committed by individuals have been provided.

Cairo Nickolls, an environment law specialist at Irwin Mitchell, said: “This is the first release of sentencing guidelines in relation to environmental offences by the Sentencing Council and it is very likely to lead to higher fines as a result.

“Businesses need to ensure that they understand the new sentencing framework and be aware that courts which are sentencing after 1 July 2014 will utilise the guidelines irrespective of when the offence took place.

“Although this is intended to create a consistent method of sentencing, it may actually result in a method of sentencing which is overly prescriptive.

“Businesses will be categorised by size, particularly turnover, and I expect there will be some level of ambiguity in relation to how the turnover of organisations will be established. In particular, I am concerned about the potential difficulty arising from sentencing a company which is part of a group of companies. The sentencing court will retain some discretion when sentencing. As well as turnover, the Court can also take into account the organisation’s wider financial circumstances and whether any operational savings were made by committing the breach.

“The new guidelines are significant and highlight the need for organisations affected to seek expert legal advice as early as possible.”

Business Money editor, Robert Lefroy, commented: “Existing for two months in the middle of one of the great environmental crimes perpetrated on a community by unelected commissioners in Brussels and their hapless, servile and incompetent henchmen in the upper echelons of the Environment Agency one can only wonder as to how we make those buffoons accountable and punish them too. The slaughter by drowning of wildlife, the devastation wrought upon my neighbours whose homes have been flooded, the massive impact upon local businesses and farms demands redress. Had this been visited upon the USA by BP the resulting courtroom bonanza would have set new records. Any chance we can set a few in the UK too?”

A third of online sales now made via mobile devices

One in three of all UK online sales are now made on a mobile device, according to the latest results from the IMRG Capgemini quarterly benchmarking (Q4 2013/4).

In the period November 2013 to January 2014, m-retail accounted for 32% of online sales – 6% were via smartphones, while tablet devices were used for 26% of e-retail sales during the quarter. This compares with 27% overall m-retail penetration in the previous quarter and represents 18% growth between Q3 and Q4. Visits to e-retail websites via mobile devices also increased and now account for 45% of traffic.

Significantly, online clothing and fashion retailers have a higher mobile commerce penetration rate, with 36% of sales completed via smartphones and tablets during the fourth quarter. Mobile visits to apparel website also reached a tipping point with over half of traffic now coming via mobile devices.

Tina Spooner, chief information officer at IMRG, said: “With an estimated 12 million tablet devices sold in the UK alone last year, and 70% of UK consumers now owning a smartphone, it is not surprising that the penetration of mobile commerce has reached a third of the UK online retail market. In fact, the latest quarterly benchmarking results reveal the penetration of m-retail has surged 2,000% in just three years.

“Consumer confidence in mobile continues to increase and improvements in mobile optimisation and the user experience are certainly factors in this. We expect this trend to continue throughout 2014, with visits set to surpass desktop usage over the coming months”.

Chris Webster, head of retail at Capgemini, said: “As these results clearly demonstrate, retailers have been hugely successful in encouraging consumers to adopt mobile devices as a shopping platform. This is thanks, in no small part, to the significant investments that have been made to m-commerce sites which are now more intuitive and user friendly than ever before. This has helped ensure customers not only use the sites to browse but make purchases from them too, thereby reducing visitor bounce rates.

“However, there are some challenges that remain. As our shopping behaviours shift from a traditional e-retail model to mobile, retailers will need to overcome the consistently high basket abandonment rates, as well as the significant number of items that are returned. So while enormous strides have been made, opportunities to materially improve performance remain.”

Other key highlights include:

Following the record high percentage of click and collect sales recorded in Q3 when the average reached 19%, this fell to 16% in Q4.

In line with previous trends, the average bounce rate fell between Q3 and Q4 – this reached 25% in Q4 which is the lowest average recorded in two years. The average bounce rate is defined as single page visitors, irrespective of which page on the retailer’s website.

Percentage of orders returned remained unchanged from the previous quarter at 17% during Q4. This also remained unchanged from Q4 last year.

Industry View:

Neil Sansom, eCommerce director at Moss Bros, said: “It was definitely a mobile and click and collect Christmas and sale period for Moss Bros. We saw our first suit sold online on Christmas day at 10am on a tablet, probably a present opened that day. Mobile now is as important as the full website version and we are now optimising the customer journey on both tablet and other mobile devices. Click and collect also played an important part as customers look for more flexibility and convenience in delivery offers and order closer to big occasions like Christmas”.

Eight out of 10 SMEs have not sought, or wanted to seek, external finance

Demand remains muted despite improving economic picture

BDRC Continental today publishes the eleventh wave of its quarterly SME Finance Monitor investigating the availability of external finance for the UK’s SMEs. The largest and most frequent study of its kind in the UK, research findings date back to the start of 2010 and are now based on more than 55,000 interviews with SMEs. The full report can be found online at http://www.sme-finance-monitor.co.uk/

Shiona Davies, director at BDRC Continental, said: “SMEs ended 2013 feeling more positive about the economy. However, there are few signs of this leading to an increased demand for external finance. There is little in the way of frustrated demand, as eight out of ten of them are happy non-seekers of finance. Where applications have been made, there is a clear divide in success rates between on the one hand the larger established businesses or those renewing existing facilities, and on the other the smaller or younger applicants, especially those applying for the first time who are less likely to be successful.”

The latest research includes interviews up to the end of Q4 2013. Key findings include:

– The proportion of SMEs that see the current economic climate as a major obstacle for their business has almost halved from its peak at the start of 2012, and there are a number of other positive signals from SMEs

– 21% of SMEs rated the current economic climate as a major obstacle to their business in Q4 2013, down from a peak of 37% in Q1 2012. Whilst it is still the top rated factor of those tested, amongst larger SMEs it is now no more of a barrier than legislation and regulation.

– The proportion of SMEs receiving injections of personal funds declined in Q3 and Q4 2013 (currently 33%). This was due to fewer SMEs feeling that they‘had to inject funds (15% in Q4 2013 compared to 24% in Q4 2012).

– Larger SMEs are more likely to be anticipating growth in the year ahead. Analysis by size showed an increasing proportion of larger SMEs with 10-249 employees predicting growth and in Q4 around two-thirds of these SMEs expected to grow in the following 12 months. Overall, 48% of all SMEs planned to grow in the 12 months after Q4 2013, and this has been stable during 2013.

Applications for new/renewed finance were stable but limited and at lower levels in 2013 than 2012. Meanwhile, the proportion of happy non-seekers of finance increased again to the highest level seen to date with little sign of any frustrated demand for finance

– SMEs were most likely to meet the definition of a happy non-seeker of finance (these are SMEs who reported that they had not applied for finance in the previous 12 months and nothing had stopped them). This was the case for 79% of SMEs in Q4 2013, the highest proportion to date (up from 73% in Q4 2012).

– 8% of SMEs had applied for a new or renewed loan or overdraft facility in the 12 months prior to Q4 2013. Levels of application were stable during 2013, but at a lower level than in 2012.

– There is little sign of a frustrated demand for finance, with a declining proportion of SMEs wanting to apply for finance but feeling that something had stopped them. 4% of SMEs met this definition of a would-be seeker of finance for the 12 months to Q4 2013 and looking forward, 1% of SMEs had an identified need for finance in the next three months that they did not think they would apply for.

Most applications were successful. Renewals were twice as likely to be successful as applications for new money and over time first time applicants have become less likely to be successful.

– Around 7 out of 10 of all loan and overdraft applications each quarter have resulted in a facility.

– Those renewing an existing facility were twice as likely to be successful (96% of those renewing Q3 2012 to Q4 2013 now have a facility) as those applying for new funds (48% of those applying for new money Q3 2012 to Q4 2013 now have a facility).

– As in previous years, smaller, younger SMEs and those applying for the first time were less likely than other applicants to be successful. Success rates for first time applicants in 2013 to date are also lower than in previous years, with 60% of first time applicants ending the process with no facility (up from 51% in 2012).

Future appetite for finance also remained limited. Confidence that this future application would be successful remained lower than current success rates would suggest.

– 15% of SMEs planned to apply for new or renewed finance in the 3 months after interview, in line with previous quarters.

– 41% of potential applicants in Q4 2013 were confident that their bank would agree to a future request, unchanged from Q3. Confidence amongst those with 10-249 employees, or with a minimal/low risk rating improved in Q4 to the highest levels seen to date, and was stable for smaller applicants and those with an average or worse than average risk rating.

– Levels of confidence remained in contrast to current success levels. Success rates for renewals Q3 2012 to Q4 2013 were 96%, compared to 56% confidence amongst those planning to renew a facility, while for new funds success rates were 48% against a confidence level of 29%.

Awareness of support measures available to help SMEs has plateaued. SMEs remain more likely to be aware of Funding for Lending than other initiatives, but over time fewer SMEs feel that it will encourage them to seek finance. Awareness of the appeals process has improved somewhat amongst those declined for a facility, but not for SMEs overall.

– 52% of SMEs were aware of any of the support initiatives tested, down slightly from 56% in Q3 2013.

– Funding for Lending (FLS) had the highest awareness of any individual scheme at 29%. Awareness has improved over the course of 2013 (it was 23% in Q4 2012) although Q4 was the first quarter not to record a quarter on quarter increase (in Q3 awareness was 30%).

– The proportion feeling that schemes such as FLS would encourage them to apply for finance has declined during 2013. In Q4 2013, 14% of SMEs thought such schemes would provide an encouragement, down from 20% in Q4 2012. Most SMEs, 77%, said that such schemes made no difference to them as they were not looking for finance.

– Awareness of the appeals process for declined applications was 13% for SMEs as a whole in 2013 and stable over time. Amongst those who had experienced being declined for a facility, awareness of the appeals process was higher for applications made in 2013 than in 2012 (for overdrafts it was 19% in 2013 v 13% in 2012 and for loans 16% v 8%).

Second charge bridging lending at record high

Short-term second charge lending is at a record high, according to the first analysis of the second charge bridging industry from West One Loans.

Annual lending of £778m brings short-term second charge loans to a record high in 2013. An additional £229m in gross lending in the twelve month period represents growth of 42% in annual short-term secured lending since the start of 2013, when this stood at £549m.

Over the last two years, short-term second charge lending has increased by 124%, more than doubling gross lending of £357m in the twelve months ending January 2012.

Duncan Kreeger, director at West One Loans, commented: “Consumer confidence is driving a surge in secured loans for consumables, which is good news for the wider economy and stimulates our collective spending power.

“But by contrast, short-term secured loans tend to be focused on capital investment. Businesses are expanding, and want to capitalize on opportunities with fast and flexible finance.

“Property investors and developers have formed a growing portion of the frenzy for new loans in recent months – Britain’s property market is a prime example of this escalating demand for short-term finance.”

Trends in short-term lending: 1st and 2nd charge

Over the last two years volumes of second charge short-term loans have outpaced traditional first charge bridging loans.

Second charge loan volumes have increased by 57% since January 2012 compared to 51% growth in lending volumes for 1st charge loans.

However, 2013 saw faster volume growth in the first charge market. Second charge short-term loans increased in number by 14% between January 2013 and January 2014. This compares to stronger growth in first charge loan volumes, up 67% over the last twelve months.

Second charge short-term loans are considerably smaller on average than first charge short-term loans.

The average short-term second charge loan has increased in value to reach £260,000, up 31% compared to an average of £199,000 in the twelve months to January 2013.

By contrast, the average traditional short-term bridging loan (acting as the primary charge against a property) was for £457,000 – or 76% more than the second charge equivalent.

Interest rates

Short-term interest rates have fallen to a record low for second charge loans.

In line with increasingly competitive rates across the short-term lending markets, the average monthly interest rate on a short-term second charge loan now stands at 1.26%, down from 1.49% in January 2013.

Mark Abrahams, CEO of West One Loans, concluded: “As we shed the gloom that has hung over the UK for far too many years, opportunities to invest are becoming more competitive.

“In many areas this is starting to inch up the cost of capital. But a new appetite for the most immediate and lucrative projects is still opening up new markets and partnerships for UK lenders.

“Meanwhile investors are hungry for new opportunities. They want to be involved in tangible projects that add serious value. The best lenders are making those connections with credit-worthy opportunities in business and property in the UK.”