What does your role consist of at Merchant Money?
I am the CEO – and was part of the team that founded MM. Daily, my duties take in just about every activity (apart from making tea, which strategically I proved to be very bad at!) We are still a small business and our approach has to be fleet of foot. I see my role as an enabler and am moving to become less hands-on as our team, and the business, grows and develops. My background has been in starting and running large enterprises, so this latest venture sits well with my leadership skill set, as it does with my practical need to execute well.
What is your past experience and did you always want to be in finance?
I first started in finance in the early 1970’s – so I guess you could say that it is the only paying job I know. I spent the first 30 years or so of my working life in consumer finance, and served at board level here, Germany and in the US. I was always attracted to innovation and challenging the paradigms that exist. My passion and hobby has been painting, though I get no time for that right now. I think my artistic leanings actually help me to look at things from many different aspects – and lending has always been as much of an art form as it is a science for me.
What makes Merchant Money currently stand out in the market?
We are young as an organisation and are attracting bright people to our team. We attempt to cut-through the traditional layers that established businesses with legacy systems and cultures have in place – to attract prospects who want personal service and to get funded fast. We are available to talk to our clients and understand their needs quickly. We do not make decisions based solely on financial plans and business models, but capture many data points about the person and his/her venture. We are a small business ourselves, and not some overpowering monolith that manages accounts and not customers. To paraphrase from another place – we do ‘think of ourselves as a customer’, and carry that approach from prospecting right through the client journey.
Do you think there has been a lack in SME funding over recent times?
There has been an obvious lack of attention by the traditional lenders to serve the SME’s, who in particular, were looking to improve their cash flows. As small businesses grew out of the last financial downturn – probably some through necessity – so the established lenders began to withdraw facilities and look to fixing their own balance sheets. Relationships between banks and some of their clients were damaged or lost as centralisation of services, or reduced facilities impaired the SME’s opportunities to get the right funding when they needed it. I am not bashing banks – just stating that, as the Government has, more and varied sources of funding (the so called ‘alternative lenders’) were needed to fill the obvious gap. Small businesses represent many millions of working folks and are critical to our economic growth.
How important is technology in the short term finance sector?
We are a people business first, and do not rely solely on technology. That said, as we scale up, we use tech as an enabler. Managing a database of clients, identifying the cohorts, working in the digital sector is of course important to us as we grow and expand. So of course technology is a major key to our business, but you need a hand to turn that key. Call me old school, but with every pair of hands we hire, we get a free brain. Application of good technology is very important.
What would you change about the short term finance market and why?
The market for lending and supporting SME’s is ripe for expansion and development, and many entrants have provided different funding vehicles – some very short, while others are actually able to offer longer term or complex repayment programmes. I think the emphasis is on learning what the business client needs and then delivering well on that requirement. Inevitably, as a new business ourselves, we started with a simple loan product and a two year repayment term. I guess that can be called short term finance, but it’s not a label that I really subscribe too.
What exciting plans does Merchant Money have in the next six months?
We continue to develop our proposition and have a number of ideas that will enhance our product line and delivery channels. We continue to invest in our people and look to 2015/16 as a very important stage of our growth. The most exciting thing is that we are getting large enough to not be ignored. I find that, and what it may open up for us, as very exciting.
How do you think the short term loans market will change in the next 12 months?
As I said earlier, it is evolving rapidly. We will see more non-traditional (and foreign) entrants look at the UK and recognise that space exists for more competition. Running a good business is about having strong cash flow and using it wisely. I believe that we and other providers can get more cash into circulation that will help businesses grow and prosper.
What is more important in the short term finance market – experience or innovation?
Cash is a commodity, so you have to innovate to compete. With experience you can simply innovate with more certainty of being sustainable. At MM we are looking to build a strong financial house on solid foundations. No smoke and mirrors, just a real-deal supported by good use of data and analytics, delivered with a real human decision and touch. Lack of innovation (and not just tech) is why this sector has been identified by alternative lenders such as MM.
What is the most interesting case you have dealt with Merchant Money?
What is most interesting, is that no two cases are the same. We have supported importing of goods, building premises, wholesaling, short term bridging, replacing overdrafts, and exporting potatoes…the list is endless. What captures our interest is when we talk to a client who is passionate about his or her line of business, but as importantly knows how to run a business. That is the key to a long lasting relationship that we strive for. A client who understands our value and with whom we can work to support their opportunities to grow and develop. That’s may be not so interesting, but it is very rewarding.
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