This week one of the UK’s leading asset finance houses made a sudden announcement that it would be exiting the UK asset finance market, which will leave an estimated £1 billion hole in funding for UK SMEs.
ING Lease’s current acceptance will be honoured and new applications can be proposed, though all business must be completed by 30th November 2012.
After this point, ING will not write any more asset finance business in the UK and it will place its existing portfolio in the run-off.
The announcement is expected to have a significant impact on SMEs because ING currently completes £1 billion of asset-based business per year.
Many will lose access to one of the most flexible and keenly priced asset financiers currently trading.
Although ING’s decision may lead to some brokers deciding to move on, either exiting the leasing business altogether or by taking early retirement, most brokers have other lenders on their panels which they can approach.
The general broker feedback to the announcement is one of obvious disappointment but most believe other lenders in the market will help to take up more business.
In the short term, however, the market will take a big hit due to the sheer volume of business ING was completing.
Many are seeing this as an opportunity for other lenders to grow their market presence, but there will inevitably be a short term problem as it will be hard for the other lenders to take on more brokers immediately.
As a primarily introducer-facing asset finance provider the news has come as a blow to intermediaries across the UK and, of course, to the 300 ING staff who will be made redundant.
Adrian Simpson, of ING’s corporate communications department, said: “ING has reviewed the lease businesses and decided to place the lease company into run-off [allowing current contracts to run out].
“The business employs 300 people. Half will be made redundant at the end of November; the remaining jobs will go as the business runs down.
“Staff were told at a meeting on Monday morning.”
ING’s departure will leave many brokers and even, potentially, suppliers struggling to source finance.
Commenting on the exit and also the market opportunity, Laura McMullen, Business Development Manager at Funding Circle, said: “ING Asset Finance has been a strong supporter of the intermediary distribution channel and developed a loyal following among its introducers. Their withdrawal is a blow, but I would urge intermediaries to take a look at Funding Circle and the asset finance option we provide. With interest rates starting from 6.5 per cent yield we provide a competitive alternative delivered in a swift timeframe.”
Adam Tyler, CEO of the National Association of Commercial Finance Brokers (NACFB), immediately arranged meetings with a range of funders, including a meeting with both George Ashworth of Aldermore and with Investec, who advised that they have increased the number of funds they are ready to put into the market.
Adam said: “Other lenders, including Funding Circle, Conister Bank, Singers and Close Asset Finance, have also given us their support.
“After the recent loss of Lombard, we still had ING available to lend into the market. Whilst there is no single obvious successor to ING at this time, the NACFB works with several different funders whom I will be meeting as a priority. I will also be holding talks with the FLA.
“The Association hopes to be in a position to announce some positive steps forward next week.”