One year in, Ken's comments on credit decisions and appetites
By Ken Archbold, Head of Credit, Compass Business Finance
It’s a year into my role, one where I’ve never looked back and have enjoyed every minute of being part of a great team making successful progress. Compass is an incredibly entrepreneurial company where I’ve met a lot of people and made many new contacts, many of whom I’m proud to describe as friends.
With a new government in place following economic turbulence in the UK, we hope, and expect, there’s more certainty now than we’ve had for a while. The underlying feeling from customers is a lot more positive.
Crucial to credit decisioning is having the best and most up-to-date information available. One of the real benefits of our relationship approach with customers and partners is that we bring a wealth of experience and knowledge to the table... and go the extra mile.
An important aspect in any finance decision will be managing the relationships with the suppliers, end users and any intermediaries, when they are part of the finance solution.
Often by the time we get involved, all the supplier wants is to ship the goods and get paid. From a transactional point of view, when they introduce the customer to us, they want the finance executed quickly and the funding to be released.
So, responsiveness is key by all parties. On a basic level we’re no different from anyone else. We want standard financial information. But what sets us apart is our knowledge of the industries we serve and what the supplier/customer is really looking for.
The crucial aspect over a credit decision will be the financial information because we need to understand what we are funding. It doesn't need overthinking but in general you need the most up-to-date financial information and a complete breakdown of what it is the customer is buying, as well as the key business drivers.
Just as with any lender, when we are looking at a proposal where the customer is taking on extra debt, we need to ensure that they can afford it.
But delving a little bit deeper will be essential. If a company is buying two large printers that replace 15 units, then you can factor in other substantial cost savings that the purchase will bring the customer, these all need to be factored in.
So, a common-sense approach is needed to know that the people running the business know what they’re doing and are going to be there until the end of our agreement.
For us, it’s all about knowing our customers (end user or supplier) and looking at how we can best support their businesses success.
