Adsum set to expand into Europe and bolster team

In an exclusive interview with B&C, specialist lender Adsum has revealed it is looking to hire new team members and widen its offering to include certain parts of Europe.

Adsum, which launched in 2019, primarily focuses on financing the VAT on UK commercial property and land and has a lending capacity of over £100m per year.

According to the lender, UK commercial property and land accounts for approximately one third of its current book.

However, it expects to see significant high growth from non-property related customers in 2021.

The lender also provides invoice financing, R&D and creative industry tax credits, with loans starting from £10,000.

Justina Tartilaite, co-founder and director at Adsum (pictured above), said that the VAT bridging and invoice finance lender is currently recruiting for its originations and tech departments to grow its existing team of 10.

“Our longer-term target is to offer products for every type of tax loan in the UK and to expand partnerships with brokers, accountants and law firms,” she said.

Adsum is also looking to expand into Germany, Belgium and the Netherlands.

Justina explained that these specific countries have similar tax structures to the UK.

Following its European expansion, Adsum will consider entering the US market, depending on client demand.

“Our aim is to identify key opportunities this year and set up deals equal in magnitude to our operations in the UK.” 

Read on for the full interview with Justina.

Why did you decide to launch Adsum? 

The business was born out of developing the idea of democratisation of capital for small firms and asset owners alike — making finance easy. The vision of the business is to be a fully tech-enabled VAT lender. 

Why did you decide to focus on VAT bridging and invoice finance?

We chose these areas of finance as they hold great inefficiencies in terms of getting an asset owner/developer the most efficient short-term financing only on the element they wish to finance, not in excess of it. Our tech and direct approach to loan processing significantly speeds up the approval and processing of these loans, while maintaining an effective cost. 

What does Adsum offer that other VAT and invoice finance providers do not?

We take pride in being a team with equally strong direct lending and tech abilities. We are different because we have in-house VAT experts, as well as in-depth structuring knowledge. Additionally, we finance all asset classes, ranging from vehicles, stock and working capital, to plant, machinery, boats, jets, land and commercial property. Our team of business development managers are all first class with extensive experience at major high street lenders, commercial finance brokers and bulge bracket banks, such as Barclays, Lloyds and RBS. Our associates and interns from leading UK universities are also key in keeping us up to date with tech efficiency. 

As a fairly new company, how did you manage to navigate and overcome the coronavirus crisis that affects the industry?

We keep technology at the centre of our business and therefore, we were able to navigate through the coronavirus crisis effectively. Our loan process is completely digital and thus, we were able to continue the pace of our operations. The setback remains the overall economic downturn of the UK market that reduced the number and size of asset purchases and development transactions. By constantly communicating with our clients and intermediaries, in addition to daily Huddle calls with the team, we maintained and even developed confidence for our services. We also served our clients’ deals and queries during the holidays. 

How important is fintech in the specialist finance industry?

Technology is a disruptive force, it makes us more efficient than ever before. Considering how niche the specialist finance industry is, it is pertinent for good businesses to keep up with technological advancement to be able to best serve customers. Adsum considers its tech to be the central reason for its operative capabilities. We have developed a proprietary tech-enabled distribution model, serving both borrowers and intermediaries/brokers alike. This allows us to provide an effective and speedy service, reduce processing times to as low as 72 hours, pay market-leading commissions and offer unparalleled service to our partners at all stages of the loan process.

Can you tell us more about the technology you use?

During the last 12 months, we have invested heavily in tech. [We also] run a partnership with Imperial College London; our office in west London is near the Imperial campus. We ran customer pilot surveys and identified pain points across the loan lifecycle — we measured processing times spent by brokers, accountants, lawyers and borrowers. We use our in-house tech capability to optimise and are proud that Adsum can process loans applications [much] faster than traditional lenders. For example, a traditional lender's term sheet could be between six- to 14-pages long. Considering there [are numerous] individuals involved in each loan application process, the problem multiplies with each user and the process can take up to 40 days. At Adsum, the time to accept terms and move forward to documentation requires five clicks. This speed and efficiency allow us to offer the best value in the market to our customers. 

What are Adsum’s targets for 2021?

Our focus is to invest further in our people; we are currently hiring in origination and tech. Our longer-term target is to offer products for every type of tax loan in the UK and to expand partnerships with brokers, accountants and law firms. We measure success by repeat business and, currently, eight out of 10 of our borrowers are returning customers. 

Are you looking to expand the products and services you offer in the future?

Our primary focus has been on VAT on UK commercial property and land. This service accounts for approximately one-third of Adsum’s current book. More recently, we have ventured into non-property related customers, such as invoice financing, R&D and creative industry (film, television and video games) tax credits. We expect significant growth to come from these avenues, considering their prevalence and development in the UK market. 

You are also looking to expand into Germany, the Netherlands and Belgium — when and why?

We are already on track to expand into Germany and are discussing with VAT lenders about setting up loans within their geography. Our aim is to identify key opportunities this year and set up deals equal in magnitude to our operations in the UK. We’ve chosen these countries in particular due to the similarity of their tax structure to the UK, which will allow us to use our expertise in VAT, invoice financing and tax credits to add value to our clients. 

Do you plan to expand into more countries in the future?

We have been asked to finance tax receivables in Germany by our existing clients and a very similar tax system exists in Belgium and the Netherlands. We will follow our clients, ultimately; the USA is a big market and, depending on client-demand, we will look to enter it following European expansion.

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