March 2025
With the clocks about to change and warmer spring weather ahead, now is a time for activity and optimism, and there’s a lot going on.
In this edition of Insight, we highlight the strengthening of our corporate finance proposition, the growing attraction of private capital, a comprehensive Scope 3 reporting solution, options for finance companies to win their battle for capital and we provide a valuable tool for finance companies to benchmark their readiness to drive commercial value from their data assets.
Happy reading!
Underpinning our aim to be the predominant boutique corporate finance provider across our chosen markets, we are delighted to announce our partnership with D3T Capital.
D3T Capital’s wealth of experience across fundraising and M&A, specifically in the commercial and asset finance sectors is perfectly aligned and complementary to the Finativ team.
Working together, we offer significant strength, depth and range of financing solutions, including alternative capital and debt raising, balance sheet restructuring, structuring, deal execution and management, securitisation support and the placement of investment funds.
To discuss how we can support your corporate finance needs, please contact Christian Roelofs
Private capital funds are demonstrating increased flexibility and competitiveness in financing portfolios of lease assets, presenting a strategic opportunity for businesses to optimise their funding structures and enhance equity returns.
In recent months, private capital funds have delivered higher advance rates -often exceeding 90% - and offered lower costs of capital compared to traditional bank funding and a comparable size. For example, some funds are now offering advance rates up to 100% of the equipment invoice, including associated costs and are looking at facility sizes of c£30m+.
Furthermore, the cost of funding through private markets has become increasingly competitive, with yields in the UK and EU tightening by 50 to 75 basis points over the past year. Private capital is also able to provide solutions more in tune with asset finance requirements than banks who are constrained through regulations.
This shift is underpinned by the rapid growth of the private credit market, which currently manages approximately $1.5 trillion in assets, with forecasts suggesting an increase to $2 trillion by the end of 2025. The recent £610 million Apollo loan refinancing at Canary Wharf exemplifies how private capital is penetrating traditionally bank-led financing markets, offering both flexibility and attractive pricing.
For asset finance business owners, the heightened demand and competitive terms from private capital offer a clear opportunity to refinance or diversify their funding structures. By working with Finativ/D3T under these advantageous conditions, businesses can improve liquidity, reduce funding costs, make capital work better for their specific business needs and ultimately drive higher equity returns.
Leveraging this evolving market could be a pivotal step in investing to improve business performance creating long-term value.
To discuss further, please contact Christian Roelofs or Richard Carter.
Finance companies will face growing pressure from regulators, shareholders and capital providers to report and manage Scope 3 emission levels, as well as to underpin their own net zero strategies.
Until now, comprehensive emissions data has not been available across the whole of a finance company’s diverse lending portfolio, and Scope 3 reporting (incorporating the emissions involved in production) has not been possible.
Leveraging extensive R&D as well as many years of asset data expertise (including through the Leaseurope Taskforce on ESG & Green Leasing Taxonomy), Finativ and STH Consulting are now able to provide a full solution, reporting at a portfolio and asset model level.
Our approach is tailor-made for finance companies and comes with a number of very strong features:
With draft UK Sustainability Reporting Standards due for release by the end of March, now is the ideal time to start preparing for the future.
If you like to find out more or discuss your company’s specific situation, please contact Peter Hunt or Phil Gerrard.
Recent market experience has shown how finance companies - especially those operating within a specialist banking environment - can lose the battle for capital, unable to achieve a suitably high level of profitability when compared to other product lines such as commercial mortgages. The resulting market exits have been well documented.
We’re aware that the leaders of asset finance companies recognise the increasing challenges and risks now faced in a highly commoditised market and the need to increase return on equity is clear.
The options, however are limited:
Assessing which, if any, of these solutions are right for your business requires serious thought and a concerted effort, driven from the top.
Those who act quickly and decisively will be best placed to make a comeback in the battle for capital and avoid being the next knockout.
To discuss further, please contact Christian Roelofs or Peter Hunt.
An important finding from the Specialty Finance Leadership Summit, co-hosted by Finativ, Woodhurst Consulting and the Target Group, is that while finance companies collect and store a lot of data, many are missing out on information-related benefits across a range of areas such as credit decisioning, risk management, process optimisation and tailored service improvement for customers. In most cases, this is underpinned by the lack of a clear data strategy.
A data strategy provides a coherent framework and set of actions to drive commercial gain through harnessing the power of your organisation's data. By reviewing the data landscape and deciding on prioritised improvement initiatives across key areas such as architecture, data governance, and culture, you can ensure that resources are optimally directed to achieve the maximum business value.
The first step towards a data strategy is understanding the current data maturity of the organisation. During the Summit, eight finance companies used the Woodhurst Data Maturity Assessment tool to generate a benchmarkable view of their current position and initial recommendations.
If you would like to take the assessment, please follow this link: https://forms.office.com/e/GHS2KZEzyC or contact Peter Hunt.
Providing an opportunity to connect with peers, share best practices and innovate, the Technology & Innovation Forum is a free-to-join community of tech experts and decision-makers, specifically for individuals working for motor and asset finance providers.
For more information or to join the community, please contact Simon Harris.