John Onslow: a fascination with UK SMEs and a look to the future
With over 30 years’ experience in asset-based lending, chief executive officer at Independent Growth Finance (IGF) John Onslow spoke to Leasing Life, providing his overview of the UK SME market.
When Onslow became involved in the IGF Group in 2016 the average ticket size was £75,000. The current ticket size of the business is £540,000 and the average ticket size of new business is in the region of £1.7m.
Onslow said: “Our year end is March, so we finished the year with assets of about £100m, by the end of the first quarter we are up to £110m; by the end of the second quarter, we would expect to be £125m-130m, so it gives you a good idea of the percentage level of growth that we are experiencing.
“We really don’t expect that to slip in the next 12 months and we don’t expect that to slow down in the next two to three years.”
In September, some of the financial services industry’s top bosses warned Chancellor Sajid Javid that the majority of UK SMEs remained largely unprepared for a no-deal Brexit. Senior bankers told Javid that while they themselves had made the necessary contingency plans, should the UK leave the EU without a deal in October, many of their SME clients had not.
To an extent, Onslow is willing to echo this assessment by large financial institutions, and provides a case in point: “IGF has a client that exclusively imports from Italy, and as you can imagine they are very concerned about Brexit.
“When politicians talk about business being ready, often they are talking about the FTSE 100. For many of the SMEs that we deal with, it’s not a question of not being prepared or not caring, they just don’t have the firepower. They live day to day: they don’t have the money to put an additional six months’ stock in the warehouse and see what happens. It’s just not viable.”
Caution over the overall marketplace contrasts with data in IGF’s Powering Freedom report, which shows that businesses are seeking 22% more funding than in January, 73% of business leaders expect growth in the next 12 months, and almost half (48%) expect double-digit growth.
Onslow said in summary of the SME lending market: “I find SMEs to be fascinating entities. There appears to be an obvious conflict between the huge percentage of business owners concerned with Brexit and almost as great a number that are confident they are going to grow in the next 12 months. Those positions can be reconciled by understanding SMEs.
He also said being an SME owner can be hard and lonely but IGF focuses on appreciating the difficulties of owning your own business.