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Seneca Trade Portal home screen displayed on a laptop screen

Introducing our new Seneca Trade Portal

Seneca Trade Portal home screen displayed on a laptop screen

It’s finally here! After months of hard work behind the scenes, we’re delighted to be launching the new Seneca Trade Portal.

The Seneca Trade Portal puts our clients in greater control of their finances and Seneca Trade accounts, providing them with access to their account information wherever they are, whenever they want it. Clients can check their capital balance, facility limits, recent transactions and upcoming repayments directly from their mobile phone, tablet or computer.

Over the past few years, we’ve invested heavily in building our technology capabilities at Seneca Trade Partners, including developing our own bespoke IT system. This system, combined with the Seneca Trade Portal, enables us to provide a better service for our clients with faster processing times and greater account transparency, all while keeping our high level of personalised service.

Access to the Seneca Trade Portal has been rolling out to our clients over the past few weeks and so far the feedback has been overwhelmingly positive. We think our Seneca Trade Portal is an industry-first development and we want to make sure it meets the needs of our clients and businesses. We are inviting feedback from users about the platform and what features would be useful to include as we continue to develop and grow the technology.

Since we started Seneca Trade Partners six years ago, we’ve seen rapid growth. We’ve helped more than 200 clients and recently hit a fantastic milestone – £11m active funds out for the first time. As we look to continue this growth, this platform and client app will help us to propel our business and what we can offer our clients into the next phase

Shipping prices and times are reducing, which is good news for UK importers

 

We said in our last post we had our busiest month on record in February.  Well March is on track to beat February’s numbers and the our business pipeline is showing no signs of slowing down.

As a front-end stock funder, our business can be considered a barometer for the confidence that exists at any given time in the UK SME market.  We are busy when UK SMEs are trading confidently and profitably, and we are quieter when trading conditions mean that UK SMEs put their stock purchasing plans on hold for a quarter or two.

Why are we so busy as the present time?

Well the OBR says the UK should avoid a recession even though overall growth in the UK economy will be very slow, and consumer confidence is holding up better than most commentators expected.  Employment remains at records levels and UK consumers are still spending on essentials.  This means that well managed UK SME’s are able to generate profits by working hard to source stock at sensible prices and get it into the UK market as quickly as possible for onward sale.

Changes in the container shipping marketplace are making a big impact too.

The main benchmark for shipping container cost is the Freightos Baltic index (FBX). This index measures the rates for shipping a 40 foot container (FEU) on the world’s 12 main shipping routes. The cost of an FEU has come down from more than $11,000 to $2,000, and is still falling.

Downward pressure on prices should continue as the orders placed for new ships during the pandemic begin to be delivered.  The new container ship order book currently stands at 30% of existing tonnage, with the majority of deliveries due to take place within the next two years. The launch of these efficient new ships will represent an unprecedented period of growth in the global shipping container fleet and should keep prices down and reduce shipping times.

Goods are already beginning to get here more quickly, with the Ocean Timeliness Indicator (published by Flexport) reporting that the FEWB shipping route (Asia to Europe) now averages 76 days, a two-year low. Still above the sub 60-day times that were the norm pre-pandemic, but the trend is going the right way.

The quicker our clients can get their stock into the UK, the quicker they can sell it on to their customers.  Everything we do here at Seneca is about helping our clients to maintain and improve their stock turn, whilst delivering growth in their business at the same time.

A record month of new clients

 

February has been a record month for us. For the first time ever we are in double-digit territory for deals completed in the month, with 10 new facilities equating to well over £1m of new funds out.

This has been a great effort from all of the team, and our CRM system is doing the heavy lifting in terms of on-boarding all these new clients quickly and efficiently.

March shows no sign of the momentum slowing, as the pipeline is stronger than ever.

Why is this happening? Well, despite the relentless doom and gloom of the mainstream media, the UK is still open for business and hardworking SME owners are making deals across all sectors. We are a nation of importers when it comes to physical goods, and it is in the SME space where the real work is done in terms of sourcing, moving, improving and selling goods.

We have been providing stock finance to SME’s for 7 years now and we understand what SME owners need from their stock financing provider in terms of making their transactions go smoothly.

We are also immensely privileged to have a large network of talented introducers who trust us with their valued SME clients. This network provides not just high-quality leads, but also invaluable guidance to businesses looking to take a stock finance product from us. Having the knowledge to discuss stock finance facilities makes a big difference when it comes to getting the right stock funding product for a business owner, quickly. And in trade and stock finance, speed is often a key requirement.

We are always find new ways to speed up the on-boarding process, and our ever-advancing technology is a key part of that.

Forklift truck moving boxes in a warehouse

Loan book growth continues as we come to the end of our 6th year of trading

Forklift truck moving boxes in a warehouse

It’s taken us 6 years, but our loan book has now exceeded £10m of active funds out for the first time. In fact, we’ve been so busy dealing with our ever-growing book of clients and other projects, that we forgot to post this update when it actually happened, and we are now at over £11m funds out, and still growing quickly! This is a fantastic milestone that we are really proud of, as a £10m loan book was the target we had in our minds when we set the business up in 2016. It’s great to have pushed past that original ambition and now be targeting bigger things still.

It could not have happened without the assistance of our broker and introducer network, and we would like to thank every introducer of business to us for their support, we appreciate it greatly and look forward to deepening these relationships further as we continue to grow.

We are also on the cusp of launching our own bespoke IT platform that has been nearly 2 years in development. This platform will provide real-time invoicing, account information and facility monitoring to our clients via our Seneca web portal and mobile app, placing them in complete control of all their stock purchasing and stock finance transactions. We think this will be an industry first in our space and will be the launchpad that propels our business onto the next phase of growth. Watch this space.

A cargo ship transporting goods

Seneca Trade Partners is 5 years old

A cargo ship transporting goods

Can you believe that it’s five years since we started Seneca Trade Partners?

We can’t, but we’ve checked, and it really is.

In the past five years we have helped nearly 200 SMEs with stock finance, which in real terms means we have funded £43m of stock purchases on behalf of our clients. We’ve grown from a standing start to a revolving payment facilities book of £10m, and we’ve seen our flexible facilities work exactly as intended during the worst global pandemic in generations.

What’s more is that we feel like we are only just getting started.  We are even more excited about the next 5 years than we were when we started the business. The UK SME space remains chronically underserved when it comes to genuinely flexible stock-purchasing finance.  We had high hopes for our new-to-market product when we started, but even these aspirations have been surpassed by how our facilities performed during the worst stress test in living memory.

The quick-turn nature of our facilities helped our clients to trade out of their existing financed stock holdings before the worst of the lockdowns hit. They could then either bide their time before starting trading with their facility again whenever they chose to (we never charge non-utilisation fees), or they could instead pivot instantly to a new sector (PPE being the obvious one) and commence trading in that space.

The purchasing power provided by our 100% LTV stock finance facilities puts our clients right at the front of the queue when it comes to obtaining scarce stock from suppliers. The ability to pay in full prior to shipment often means our clients are first in line for stock when it comes to suppliers prioritising production.

The confidence that we obtained from not just surviving but growing through this period has given us an added push to get on with some major projects within our business. Projects that when completed will see us take a step change in size.  We are investing heavily in our core IT systems with the goal of being able to put the real-time trading and accounting information that we see, in the hands of all our clients, and we are recruiting new team members around the country to give our introducers the option of dealing with a more local touch point.

The last five years have been great, we hope and expect that the next 5 will be even greater.  We can’t wait.

Person moving stock in a warehouse

Is the cost of goods on the rise?

Person moving stock in a warehouse

 

Inflation, as measured by the UK’s consumer prices index, is at 1.5% and is expected to rise above its 2% target for a short period over the coming months. 

What you might find surprising about the above statement from the Bank of England is that if you are trying to make some home improvements, buy camping equipment, book a holiday in the UK or buy a used car… then 2% looks way off.  Prices of many of these items have gone up much more than 2% haven’t they?  Why is that, and are these price increases here to stay?

The short answer is that these price increases are the result of classic supply and demand economics.  Supply of goods has been hit by event after event.  The pandemic has caused a reduction in raw materials and manufacturing output across the globe creating a stock shortage.  Governments have pumped huge amounts of cash into their economies via the various stimulus schemes, propping up key sectors and maintaining, or perhaps even increasing, consumer demand.  Restrictions on personal freedoms have meant that goods related to specific sectors such as home improvement and UK stay-cationing have been in very high demand.  As stock funders who import goods from suppliers all over the world on behalf of our clients, we can also confirm that the Suez Canal blockage did not help the situation!

One of the indicators of inflationary pressure is also the current (or should that be continuing) UK housing boom.  The average UK house price climbed 10.2% in the year to March, the highest annual growth rate since August 2007.   Demand for large houses with gardens coupled with the UK stamp duty holiday policy, and a lack of forced selling due to furlough, has driven this growth.  House price growth means confidence, and confidence means increased consumer spending.

Despite this confidence, the price of most of the items we buy in the supermarket, the fuel we put in our cars and the amount we pay for professional services have not really changed.  It is just a few key sectors where prices have gone through the roof and the reason for this is more down to restrictions in supply than vastly increased demand.  The Bank of England hopes these restrictions will ease relatively quickly.

Something that’s been evident in our business is that clients who have not used our services for some time, perhaps even a couple of years, have come back to re-start their facilities in order to pay their suppliers upfront and in full for the stock they need, as doing so gives them a competitive advantage where the availability of the stock is a concern.   Relying on supplier credit, even when their suppliers offer it, puts them in the same queue as their competitors, whereas paying in full prior to shipment helps to secure the stock they need ahead of the competition.

The Bank of England has said that it thinks this inflationary pressure will be short-lived and they will take action to curb it if necessary.  What action this would be is not clear, as putting up interest rates would risk strangling the economy just as it’s getting going again, and cause serious problems for many businesses and highly leveraged homeowners.

In an interview with the Guardian, Sir Dave Ramsden, the Deputy Governor responsible for markets and banking, said the Bank expected price pressures to be temporary but he and his colleagues on the monetary policy committee were aware of the risks.  He said: “There is a risk that demand gets ahead of supply and that will lead to a more generalised pick-up in inflationary pressure. That’s something we are absolutely going to guard against. We are looking carefully at the housing market and a raft of real-term indicators.”

As the UK’s most flexible stock funder, we are currently feeling both the benefits and the pressure of the price increases due to stock shortages.  Our services are in demand like never before, but the cost of international shipping and the challenges in obtaining key lines of stock means we are having to work hard along with our clients to move quickly when stock becomes available.  Truth be told, that’s something we love to do, it is what we are here for, and we are glad to be doing lots of it.

It would be very pleasing if the stock shortage situation improves as we move through the summer, and what remains is sustained consumer confidence and steady growth.  That would be good news for all UK SME’s, us included.  But for now, we continue to move at pace to make sure our clients have the stock they need as prices of in-demand goods continue to climb.

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