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August 7, 2020

Leeds aerospace supplier flying steady after diversifying

A Leeds-based supplier to the international aerospace industry has diversified to help airlines preserve grounded aircraft with support from Lloyds Bank. This is helping the company maintain revenues while the sector faces a downturn because of Covid-19 disruption.

Aeroservices distributes aircraft tools and components, from tyres to lubricants, to more than 90 countries worldwide. Its customers include regional airlines, national carriers, air freight operators and defence fleets.
With global air traffic dropping by up to 90% during the peak of the Covid-19 crisis, the firm’s order book was hard hit.

Aeroservices is maintaining its revenues after expanding its portfolio to include parts and components that are specifically used by airlines to maintain grounded fleets of aircraft. The company turned to Lloyds Bank, securing a seven-figure loan as part of the Coronavirus Business Interruption Loan Scheme (CBILS), to support this expansion.

To help with its recovery, the business has hired a new director and a supply chain specialist. The appointments follow Alun Phennah joining the company as chief operating officer shortly before the pandemic.

Mashood Akmal, managing director Aeroservices, said: “We serve lots of different corners of the global aviation industry, which has given us a level of protection against what has been a fierce downturn in passenger air travel.

“But it was clear early on that we’d need to diversify to really safeguard the business. Grounded aircraft still need to go through regular maintenance for compliancy and expanding our services into this category felt like a natural step for us.

“The funding from Lloyds Bank really helped us to take our mind off finances and to focus on this expansion, which will ultimately help us to ride out the storm while the aviation industry recovers.”

Natalie Hancock, relationship director at Lloyds Bank, said: “The aviation industry has a long road ahead to recovery, but the opening up of more air corridors between countries around the world holds promising signs.

“Thanks to the ingenuity of Aeroservices management team, the business now has a strong footing to weather the industry’s recovery phase. It’s a great example of a firm we’re supporting as part of our work to help Britain’s businesses recover.”

August 7, 2020

2020 sees record year for commercial fraud

Graydon, one of Europe’s leading providers of business data, insights, analytics and solutions, and Cifas, the UK fraud prevention service, announced new fraud analysis today indicating a huge rise in attempted commercial fraud in the first 6 months of 2020.

Graydon data from its sector intelligence networks has shown a rise of 66% in the value of the average suspected fraudulent application, and the average weekly value detected tops £1 million, an increase of 100% on the average weekly amount identified in 2019.

In just the first 6 months of 2020, a total amount of £26.3m has been detected in trade credit fraud. It’s not just businesses who find themselves the victims either. The coronavirus forced local authorities to respond quickly and provide access to government-provided grants. Cifas intelligence has picked up changing fraud since the coronavirus (Covid-19) started to spread in the UK and continues to increase daily. Cifas understand that of the 5,000 grant applications received by just one council, one in ten was flagged as potentially being linked to fraud.

Cifas have also been asked by the British Business Bank to create a solution to prevent multiple applications for Bounce Back Loans (BBL), which was announced by the chancellor on 27th April 2020 as a measure to support small businesses with a loan of up to £50,000 and 100% government-backed guarantee for lenders. Of the cases recorded by members for Covid-19 related stimulus packages, 57% are in relation to identity fraud. Just over a quarter of these are for impersonation – corporate identity theft. Additionally, 39% are in relation to application fraud, with nearly a half in relation to false income.

The pandemic has provided additional cover for committing fraud, and the stats reflect this, illustrating the need to investigate the real figures behind a business entity, particularly SMEs, who, with fewer board members, exercise much more responsibility.

This analysis comes just before the launch of Graydon Business Risk, an innovative commercial risk, fraud prevention and KYC solution, integrating Graydon’s financial data and fraud case data from Cifas’ National Fraud Database, delivered by TruNarrative’s market-leading single case management software.

More information on this platform will be released shortly. If you are an organisation who would like to take part in testing, please email us: [email protected]

Alan Norton, head of intelligence, Graydon UK:

“The statistics we’ve seen in the first half of 2020 show that fraud is not only rising exponentially, but criminals are diversifying their tactics to defraud victims. With the UK economic outlook expected to deteriorate in the coming months, and therefore desperation as an added motivation, there has never been a more important time for organisations to be proactively on the lookout for attempted fraud.”

Lee D’Arcy, commercial director, Cifas:

“The fraudulent activity we see changes regularly as people seek to take advantage of the situation of the time. The pandemic has been a great example of this where we have seen multiple applications for Bounce Back Loans and Local authorities seeing Covid-19 grant applications which are potentially fraudulent along with businesses being impersonated and created and sold on the web simply to make applications for this much needed financial support, we must work together to defend ourselves against these activities.”

August 7, 2020

A shared future – 1 in 4 SMEs in the UK now share ownership with their employees

The pandemic has made many businesses re-evaluate the way they work. In a survey of 500 SMEs, by Vestd, nearly half (48%) said that Covid-19 had made them rethink the way they operate.

As a result, one in four SMEs now offer shared ownership with their employees. Companies in the North East of England are the most likely to motivate the team with equity, followed by London, the East of England, the North West and Northern Ireland. The South East of England had the lowest adoption levels of employee share schemes.

Sectors where shared ownership is most prevalent include automotive, finance and banking, food and drink, hospitality and leisure and insurance. There seemed to be a stark absence of shared equity among the construction industry and health and pharmaceutical sectors.

Ifty Nasir, CEO and co-founder of the share scheme and equity management platform, Vestd, said: “Covid-19 has made us all re-evaluate our lives and think about what really matters to us, both at home and at work. Many people will be looking at ways they can proactively make a difference in their company, while becoming a more integral part. Employers, meanwhile, will be searching for methods of engaging their talent, without breaking the bank – especially as so many (63%) have said they won’t be giving pay rises in the coming 12 months.

“Introducing a shared equity scheme is a progressive move forward. It has proven results to increase performance, company cash flow, loyalty and company culture.”

However, there is a lot of confusion when it comes to shared equity, and is cited as one of the main reasons why companies choose not to offer it.

To clarify, Ifty has summarised the most popular options amongst SMEs today:

  1. EMI Option Schemes (used by 41% of SMEs who offer schemes) – the most tax efficient of all, with recipients paying just 10% CGT on any gains. It gets better: the company can offset both the cost of the scheme and the tax benefits achieved by employees against its tax liability. EMI schemes allow employers to set various conditions to govern the release of equity, such as time-based, or performance milestones. The vesting schedule can also be customised in various different ways.
  2. Ordinary Schemes (used by 35%) – These get people in the game with immediate effect, unlike options, which are subject to a vesting period of typically three or four years.
  3. Growth Schemes (used by 31%) – This is an excellent approach for founders who have built up some existing value in their company. Recipients only share in the capital growth of the business from the point at which the shares are issued. Growth shares can be given to anyone, and conditions can be attached. These shares also limit the risk of the recipient having to pay income tax on receipt of the equity.
  4. Share Incentive Plan – SIP (used by 23%) – A tax efficient, all employee plan which provides companies with the flexibility to tailor the plan to meet their business needs.
  5. Unapproved Options (used by 22%) – These provide the most flexibility and are the easiest to set up. They do not require any approval from HMRC and can be given to anyone, but are not as tax efficient as EMI schemes.
  6. Save as you Earn – SAYE (used by 18%) – a monthly saving scheme that gives you a tax-free bonus and an option to buy shares in your company at the end of the scheme.

Vestd recently unveiled their latest Employee Equity Trends Report which found that 63% of SMEs won’t be giving pay rises in the coming year, with 15% actually asking their teams to take pay cuts.

To download the report click: https://vestd.com/employee-equity-trends-2020/

August 7, 2020

Tough times ahead as spending intentions remain low

The BRC and Opinium have been working together to track consumer behaviours and their sentiment towards coronavirus. This research has run weekly since 1st May 2020, with the latest survey taking place between 31 July – 4 August 2020.

  • Spending Intentions: 24% of respondents say they expect to spend less than usual over the next month compared with 11% who say they will spend more (61% intend to spend the same, 4% prefer not to say).
  • Spending Intentions: When asked about specific products, the most common categories for reduced spending over the next month were fashion/clothing (37%), small electronics (28%), large electronics (27%) and health and beauty (27%).
  • Purchases: 62% of respondents feel comfortable about buying groceries in store, up from 56% the week before. The average for non-grocery categories rose to 42%, a new record, from 38% last week. It is likely the introduction of masks has helped improve these figures.
  • Shopping visits: 14% of shoppers intended to visit shops to browse, up from 12% at the start of July. 58% intended to visit shops only if necessary (up from 52% at the start of July). Those who said they would avoid visiting shops if possible fell to 23%, down from 32% at the start of July. Younger (18-34) respondents showed the most willingness to visit shops, with 20% saying they intended to browse, compared with 19% who intended to avoid going to shops if possible.
  • Safety: 51% of respondents felt that retailers were doing enough to protect the public from coronavirus, with only 13% disagreeing.

Helen Dickinson OBE, chief executive of the British Retail Consortium, said:

“Spending intentions remain down among UK consumers, suggesting retailers will continue to face hard times in the months ahead. This was particularly true for clothing and fashion, which has been particularly hard hit by the pandemic.

“Nonetheless, the public continue to be reassured by the many safety measures that have been put in place by retailers, such as perspex screens, increased hand sanitiser and regular cleaning. Four times as many people believe retailers are doing enough to protect the public, as disagree, and this has been reflected in the rise in footfall.”

 

August 7, 2020

Coronavirus loan schemes benefiting businesses in all corners of UK

New data published today reveals the regional distribution of loans under the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS). The data, published by the British Business Bank, shows that the proportion of overall loans in each of the nine English regions and three Devolved Nations matches closely their respective share of the UK business population.

The East of England (11% of the total number of CBILS loans UK-wide) has the highest usage of CBILS outside London and the South East (33%) while the North West (11% of the total number of BBLS loans UK-wide) reports highest usage of BBLS outside London and the South East (34%).

Both schemes provide financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted, as a result of the Covid-19 outbreak.

Other regions demonstrating strong use of CBILS are the North West (10%) and South West (9%). Take up of CBILS in the Devolved Nations is comparable to the proportion of the local business population of each nation, with take up in Scotland (5%), Wales (3%) and Northern Ireland (2%).

Other regions demonstrating strong use of BBLS include the East of England (10%) West Midlands (8%), South West (8%), Yorkshire and the Humber (7%) and the East Midlands (6%). Take up in the Devolved Nations is Scotland (6%), Wales (4%) and Northern Ireland (2%).

The Wholesale and Retail sector has accessed a significantly higher proportion of CBILS loans (19%) than its share of the business population (9%), with Manufacturing (13% v 5%) and Accommodation and Food Services (9% v 3%) following a similar pattern.

The Wholesale and Retail sector also accessed a relatively high proportion of Bounce Back Loans compared to its business population share (16% v 9%), as did businesses in Accommodation and Food Services (8% v 3%) and Real Estate Services (6% v 2%).

Keith Morgan, chief executive officer of the British Business Bank, said: “A key objective for the British Business Bank is to identify and help reduce regional imbalances in access to finance for smaller businesses across the UK. It is welcome to see in the data that these schemes are helping businesses across the UK’s three Devolved Nations and nine English regions to access the finance they need to survive and stabilise, putting them in a better position to grow as we move into recovery.”

Small business minister Paul Scully said: “Throughout this crisis, we have backed business of all sizes in in every corner of the UK. The schemes put in place by the government-owned British Business Bank have provided some much-needed breathing space for businesses as they deal with the challenges posed by coronavirus. Government support has helped firms right across Britain, not just in keeping businesses going but now enabling thousands to bounce back in a safe, Covid-secure manner.”

Stephen Pegge, managing director of commercial finance at UK Finance, said: “Lenders understand that times are tough for businesses up and down the country, but the industry has a clear plan to help them get through this crisis. Whether you’re a sole trader in a rural area or a company with hundreds of employees in a major city, the banking and finance industry stands ready to offer the right support to suit your needs and these figures demonstrate that funding is well distributed throughout the UK. Businesses should remember that any lending provided under government-backed schemes is a loan not a grant, and so should carefully consider their ability to repay before applying.”

August 6, 2020

CPS responds to planning White Paper

The Centre for Policy Studies today welcomed the publication of the government’s White Paper, ‘Planning for the Future’.

The think tank praised the focus on delivering sufficient new build homes and home ownership, which has been the core focus of its own work on housing. The CPS also welcomed the move towards giving communities greater say over development via binding local design codes. This echoes the recommendations of Alex Morton, the CPS’s head of policy, in his landmark paper ‘Create Streets’, co-authored with Nicholas Boys Smith.

The think tank also welcomed the goal of streamlining the planning process, trying to make the system deliver more land and an easier developer contribution process, while noting that the difficulty will be in the detail of how this works on the ground.

It noted that the proposed ‘growth zones’, the focus on the importance of SMEs in the housing industry, and the exemption of smaller sites from Section 106 payments, all echoed proposals in previous CPS papers.

Responding to the White Paper, Alex Morton said:

‘We need a simpler, faster, people-focused system to deliver the homes we need and keep Britain building. Local design codes can encourage development by making specific building requests easier to agree. By ensuring that all buildings complement the existing character of a neighbourhood, they boost a sense of place, create local buy-in, reduce opposition and allow for quicker and more profitable development.

‘Abolishing national prescriptions will clear the way for local people to set design codes on the issues that really matter to them through neighbourhood planning.

‘More broadly, these planning reforms are an intelligent first step in reform, but much more detail will be needed and many vested interests will try to slow and stop reform. We look forward to engaging on the detail and urge others to approach these reforms with a positive and supportive attitude – the housing crisis is one of the biggest issues facing our country and this radical paper is to be welcomed.’

August 6, 2020

Official email services have been used to impersonate and scam

Cyber criminals are increasingly registering accounts with legitimate services, such as Gmail and AOL, to use them in impersonation and business email compromise attacks, says email security firm Barracuda Networks, the trusted partner and leading provider for cloud-enabled security solutions.

In their most recent threat spotlight report, Barracuda researchers observed that 6,170 malicious accounts that have used Gmail, AOL and other email services, have been responsible for over 100,000 BEC attacks which have impacted nearly 6,600 organisations. What’s more, since April 1, these ‘malicious accounts’ have been behind 45 per cent of all BEC attacks detected.

Essentially, cyber criminals are using malicious accounts to impersonate an employee or trusted partner, and send highly personalised messages for the purpose of tricking other employees into leaking sensitive information, or sending over money.

Cyber criminals preferred choice of email service for malicious accounts is Gmail, which accounts for 59% of all email domains used by cyber criminals. Yahoo, is the second most popular, accounting for just 6%  of all observed malicious account attacks.

Researchers at Barracuda also observed that most malicious accounts (29%) are used for less than 24-hour periods – most likely to avoid detection and suspensions from email providers. However, it’s not unusual for cybercriminals to return and re-use an email address for an attack after a long break.

Having analysed attacks on 6,600 organisations, Barracuda researchers found that in many cases, cyber criminals used the same email addresses to attack different organisations. The number of organisations attacked by each malicious account ranged from one, to a single mass scale attack that impacted 256 organisations — 4% of all the organisations included in the research. Similarly, the number of email attacks sent by a malicious account ranged from one to over 600 emails, with the average being only 19

Michael Flouton, VP email protection, Barracuda Networks comments:

“The fact that email services such as Gmail are free to set up, just about anyone can create a potentially malicious account for the purpose of a BEC attack.

“Securing oneself against this threat requires organisations to take protection matters into their own hands – this requires them to invest in sophisticated email security that leverages artificial intelligence to identify unusual senders and requests.

“However, no security software will ever be 100% effective, particularly when the sender appears to be using a perfectly legitimate email domain. Thus, employee training and education is essential, and workers should be made aware of how to manually spot, flag and block any potentially malicious content.”

August 6, 2020

Lloyds Banking Group launches The Big Conversation: Helping Britain Recover

Business and industry leaders, community members, political representatives and expert voices across the UK’s nations and regions will participate in conversations about the road to recovery from the economic effects of the coronavirus pandemic as part of an ambitious grassroots programme being launched by Lloyds Banking Group this summer.

As part of The Big Conversation: Helping Britain Recover, Lloyds Banking Group will run a series of virtual events, initially focusing on small and medium-sized businesses, bringing together local and regional voices to explore the best road to recovery for their region. The series, beginning in September, will consider the challenges, opportunities and critical areas of support needed to help rebuild businesses and communities and inform recommendations for public policy. Findings will be shared across the UK’s nations and regions later this year.

The need for local recovery
While all areas of the country have been affected by the coronavirus pandemic, different parts of the UK will inevitably face different challenges in recovery. In a study commissioned by Lloyds Banking Group in partnership with YouGov, 72% of leaders of small and medium-sized business stated that they think it’s important that economic recovery plans should be tailored to the local needs of each region. Three quarters (75%) said that it’s important for recovery plans to be tailored to meet the unique needs of different business sizes, while more than eight in ten (81%) said that it’s important for government plans for economic recovery to be tailored to the unique needs of different sectors.

Convening expert voices
The Group will partner with the Confederation of British Industry (CBI), whose representatives will bring the experiences of its 190,000 members to the events across Scotland, Wales, Northern Ireland and the English regions. The Group is also proud to partner with the CBI on a new report focused on what’s needed to level up the English regions.

António Horta-Osório, CEO of Lloyds Banking Group, said: “The UK is starting to get back on its feet, but the difficult task of rebuilding businesses and the economy lies ahead.

“Our regions and nations have been affected by the coronavirus pandemic in different ways, and our knowledge of regions, sectors and businesses throughout the UK tells us that there is no one-size-fits-all approach to recovery. Lloyds Banking Group is here to help the UK weather this storm and, importantly, The Big Conversation: Helping Britain Recover will bring together key voices from across these regions, sectors and businesses to get to the heart of the issues that matter and encourage true collaboration along the road to recovery.”

Dame Carolyn Fairbairn, CBI director-general, said: “If the UK is to truly build back better from the sharp hit the country has taken from Covid-19, then we must work from the ground up.

“Local communities have an integral part to play in how our villages, towns and cities recover, helping to ensure that opportunities for people can be both protected and created in the future. The Big Conversation: Helping Britain Recover from Lloyds Banking Group can provide that platform for local voices within communities to help get the economy back on its feet as soon as we can.”

For more information visit www.lloydsbankinggroup.com/our-purpose/the-big-conversation-helping-britain-recover.

August 6, 2020

Finance brokers vital for SME recovery

Finance brokers will have a vital role to play in helping small and medium-sized enterprises (SMEs) recover from the impact of Covid-19 according to research from Aldermore bank.

With SMEs expecting to borrow billions in order to support their businesses following the Covid-19 outbreak, many SME business owners will likely turn to finance brokers to help them access the right funding. Prior to the pandemic, UK SMEs who used a broker were able to access an average of £93,000 per business.

Given the huge impact the pandemic has had on businesses, SMEs expect to borrow £48.3bn to get themselves back on track following Covid-193 and broker support will be more important than ever to help SMEs access the right type of financing options.

The value of a broker
In the post lockdown era, business resources will likely become increasingly stretched and finding the right funding package could be vital for survival. 27% of SME decision makers who used a broker felt more supported and had access to a tailored process which was specific to their business’ needs.

A third (33%) of SME decision makers have used a broker in the past to access funding, and by using a broker, SMEs are more likely to use a diverse range of funding options, which include commercial mortgages (54%), start-up loans (52%) and asset finance (49%).

SMEs can reap several rewards by using a broker, with three out of 10 (28%) stating their business was able to consider multiple options when applying for funding. Furthermore, 28% experienced an easy process and 27% felt more supported and had access to a tailored process which was specific to their business’ needs.

Since the start of the pandemic, brokers have continued to support SMEs, helping them access suitable finance options with products such as the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme.

Word of mouth is key when it comes to SMEs choosing a suitable broker, with one in five (20%) relying on a personal recommendation from a friend. Almost one in five (19%) SMEs picked a broker based on their credentials and 17% chose based on their willingness to negotiate on fees and services.

Tim Boag, group managing director, business finance at Aldermore, said: “Brokers are often the unsung heroes when it comes to SME finance. In the months ahead, they will be needed more than ever to help businesses secure the funding they need.

“Many SME owners are still relying on personal loans which can often be expensive and unsuitable. Understanding more about the finance options available means small businesses will be able to make more informed decisions about how to survive in the challenging months ahead.”

August 6, 2020

Funding could be the one catch that could jinx the planning reforms

Expert analysis by CEO and founder of Hilltop Credit Partners

“Showing no signs of a lockdown fatigue, the housing market is enjoying a fantastic recovery with reports suggesting a growth of 15% in UK house prices by 2024. The market momentum has been boosted by Boris Johnson’s “build, build, build”speech and other announcements like no tax on homes priced £500,000 or less until March next year. Planning law reforms will prove to be another shot in the arm for the housing market. However, all this early show of confidence could hit a major roadblock if housing developers fail to get access to development finance in a timely fashion.

“A recent CBRE report shows how development finance availability in the UK has contracted since the Covid-19 outbreak with fewer lenders considering new opportunities and most focusing on their existing loan books. A potential second wave could further exacerbate this situation and funding may dry up even more. For a developer, this will mean reduced access to capital, likely increased costs due to involvement of different lenders since one lender will not stretch enough when it comes to providing funds required for the development.”

“Access to development finance is set to get more crucial for housing developers as buyer preferences show drastic changes since the pandemic. The ongoing lockdown has radically changed the way Brits are wanting to live and work. This is especially true for city dwellers who want to venture outside the capital in search of more living space. To keep up with the changing demand, the housing developers are now trying to catch up with the developments “in the regions” and looking for development finance options to provide high-quality, affordable housing for such buyers. Lenders will therefore have to move away from the ‘safety’ provided by the London market, recalibrate their approach and diversify their books.”

“No doubt the government is backing the sector and putting its weight behind, but it is equally important to not slip at this point and help developers grow when it is most needed. Even government organisations set up to provide funding like Homes England fail to make the flow of funds any easier. At Hilltop, we try to address this funding gap every day and our products reflect that. We have committed nearly £30m in the past nine months to fund experienced SME developers across the country and continue to remain cautiously committed to funding high-quality assets and developers. We go that extra mile compared to the market at large, let alone high-street banks, and we also assist developers on the equity side too, thus providing a comprehensive one-stop solution.”

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