Thursday 6th Aug 2020
Well we are four months into our new financial year, yep a third of the year has gone. As part of a Japanese company we take a long term view and plan ahead. So when we put our new business first draft of budget numbers in place last October we didn’t bank on Covid 19, national lockdown and massive Government intervention with significant loan / funding support. Its fair to say we haven’t hit all our new business targets since April – I’d be a fibber if I said anything different. There are reasons to be cheerful – so I thought I’d share elements of my internal note on our blog site (without sharing anything too commercially sensitive). If highlighting some of the trends we see is useful and we get good feedback I’m happy to do a lead generation / invoice finance pulse check – albeit from Hitachi Capital’s perspective - on a regular basis.
Lead flow
April saw our lead flow drop dramatically in the first couple of weeks from all sources, especially from local introducers and accountants. However, as we didn’t furlough any staff in our business we took the decision to stick to our original marketing / lead generation plan – so for April we only ended up 5% down on leads against 2019’s leads for April. During May, we saw leads pick up to slightly above last year and June was a strong month as lockdown began to ease before dropping back to 2019 levels again in July. Interestingly web traffic is up 12% up on the same period last year – so companies are definitely looking for cashflow solutions.
Deal timings
At Hitachi Capital we are completely digital and a key performance indicator is speed of deal payout from lead origination. This financial year (eg from April) the timings have lengthened by over 20%, almost entirely due to prospect delays especially if they need to get information from their bank. It is also worth mentioning that on larger invoice discounting lines the verification is taking slightly longer than usual, but we think we’ve solved this issue.
Over the last few weeks we’ve started to see payout times reduce again – this is a great trend and hopefully will continue.
New business volumes
The first three months of the financial year saw lower than planned (and budgeted) new business volumes on all measures – hardly surprising in lockdown, i guess. However, July was a record July for new business lending, with a strong pipeline for August. So there are positive signs that the UK economy is starting to pick up - fingers crossed.
Client service digitally enhanced
Although we have a completely digital, first and best in market, onboarding process, called FLi, we still prefer to visit clients face to face to ensure the very best client service, product selection and understanding of invoice finance. This wasn’t possible during lockdown yet we still managed to get Five Star Feefo ratings for client service through this period – something we are really proud of.
August predictions?
Typically August is a slow month for leads and new business volumes as prospects and introducers take holidays. This year I have no idea how the lockdown will impact, but as the Government support and initiatives start to wind down I think we could see an increase in leads over previous years.
