DAVENHAM ASSET FINANCE
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18th JANUARY 2019
Decline in bank underwriting standards cause concern
​

Amidst the uncertainty of whether a Brexit deal is going to be agreed ahead of the 29th March deadline, Bank of England Governor Mark Carney has expressed concern on the decline of underwriting standards by UK banks, with comparisons to the pre-global financial crash period of 2007.
 
Rapid growth has highlighted concerns
The rapid increase has been specifically observed in the leveraged loan market now equating $2trillion, where businesses that are already highly indebted are being approved for further lending, with growth having been driven by investment funds and collateralised loan obligations (CLOs) linked to the loans. Carney commented that whilst “The subprime analogy... isn’t perfect… it’s on the road to ‘no doc’ underwriting” referring to the missing affordability checks on subprime home loans in the United States before the crisis 11 years ago.
 
Similarities in the asset finance sector
Managing Director at Davenham Asset Finance, Paul Burke, comments “We have seen signs in our own small niche market with examples of lending being authorised based on ambitious views of asset values, light touch asset / credit due diligence, and a risk reward model that doesn’t seem to reflect the risk taken.” This raises the question; are asset finance funders simply book building and going for volume, without heeding to the current economic uncertainty exasperated by Brexit?
 
Business urged to continue preparations amidst uncertainty
Although Theresa May survived the No Confidence vote on Wednesday night, losing the Brexit Deal vote yet again on Tuesday, has caused further frustration and hesitation for UK businesses. However, even though Mark Carney suggested that confidence was regained a little with the notion that the 29th March deadline may be extended, the general view of experts is that businesses must do what they can to prepare for the different possible outcomes.
 
At Davenham, we work in partnership with brokers and clients to ensure minimal risk to their businesses which further enhances our credibility as an alternative finance lender. If you have any concerns regarding your existing financial circumstances, or would like some helpful advice on secure asset finance provision, please contact our expert team on 0161 832 8484.
ASSETS FINANCED
• Construction Plant & Machinery
• Engineering Equipment
• Printing Machinery
• Manufacturing Machinery
• Agricultural Machinery
• Private Vehicles 
• Haulage Vehicles
• Bus & Coaches
TYPES OF FINANCE OFFERED
• Finance Lease
• Hire Purchase/Lease Purchase
• Refinance of existing assets
• Turnaround finance
• Short Term Funding
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Part of the Davenham Group  including  www.davenhamtradefinance.co.uk
Registered Office 55 King Street, Manchester M2 4LQ.
​Company Number 08356079
Davenham Asset Finance is not authorised by the FCA to conduct regulated business and thus can only provide asset finance and asset refinance solutions to non-regulated businesses.
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Website designed by The VIVIDesigner
  • WHAT IS ASSET FINANCE
    • Case Studies
    • Testimonials
  • MEET THE TEAM
    • Careers
  • ASSET FINANCE SERVICES
    • Asset Refinance
    • Vehicle Finance & Refinance
    • Construction Finance / Plant & Machinery Finance
    • Machinery & Equipment Finance
    • Agricultural Finance
    • Printing Equipment Finance
    • Machine Tool Finance
    • Recycling & Renewables Finance & Lending
    • Finance Lease
    • Hire Purchase / Lease Purchase
    • Short Term Finance
    • Turnaround Finance
  • BROKERS
  • NEWS
  • CONTACT
  • MORE
    • Treating Customers Fairly
    • Home
Assets Financed
• Construction Plant & Machinery
• Engineering Equipment
• Printing Machinery
• Manufacturing Machinery
• Agricultural Machinery
• Private Vehicles 
• Haulage Vehicles
• Bus & Coaches
Types of Finance Offered
• Finance Lease
• Hire Purchase/Lease Purchase
• Refinance of existing assets
• Turnaround finance
• Short Term Funding
Part of the Davenham Group  including  www.davenhamtradefinance.co.uk
Registered Office 55 King Street, Manchester M2 4LQ. Company Number 08356079
Davenham Asset Finance is not authorised by the FCA to conduct regulated business and thus can only provide asset finance and asset refinance solutions to non-regulated businesses.
Careers  | Sitemap | Cookies Policy | Terms & Conditions

Website designed by The VIVIDesigner