The company, which acts as an asset finance brokerage but also writes its own book (currently £10m in receivables) is seeking to build on its experience and expertise in providing finance both direct to SMEs and as part of manufacturers’ and equipment resellers’ sales packages. 

“In particular,” Crook explained, “the investment will enable Henry Howard to write more business using its own capital.”

HHF’s specialisms lie principally amongst the office equipment, IT, CCTV, refrigeration, vendor equipment and telecoms sectors.

Crook and his co-founder, Howard Ross, both brought asset lending experience established during careers with Lombard to the formation of HHF – Crook in Lombard’s business equipment leasing division and Ross in Lombard North Central.

Richard McDougall, investment director at Cabot Square Capital stressed that banks’ appetite to lend has been severely reduced by new regulatory capital requirements which are forcing them to adopt more restrictive lending criteria.

The lack of financing and the changing regulatory requirements are also potential headaches for business equipment vendors that use sales finance to help customers fund major purchases of equipment and infrastructure, from heavy machinery to sophisticated technology.  These businesses risk losing sales if access to finance is withdrawn.

McDougall added: “It has been a turbulent few years in the SME financing marketplace and that is making life complicated and frustrating for both SMEs and equipment vendors.

“This has created a significant opportunity for independent finance providers to step forward and become the long-term partner that SMEs and vendors can rely on to meet almost all of their finance needs.

“Henry Howard has already expanded the volume of funding that it offers by 20% in the last year alone. We are looking forward to working with its excellent management team to continue that success as financing provider of choice.”

HHF is likely to further benefit from an expected re-shaping of the finance broker market as a result of the impending regulation of the sector by the Financial Conduct Authority.  The increased regulatory requirements are expected to prompt many smaller brokers to close shop, which will leave SMEs and vendors looking for alternative providers.

Investing in technology

Crook said that the investment will also enable HHF to further develop its comprehensive funding options and technological infrastructure, including the immediate launch of an online funding portal which offers instant financing decisions to vendors. 

“It is great,” he said, “to be working with Cabot Square which has an excellent track record of building highly successful financial services and lending businesses.

“The Henry Howard culture is to be responsive and flexible, and that is exactly what SMEs and vendors are crying out for.”

HHF, which last financial year turned over some £40m new business, currently has a staff complement of 45 and Crook explained that the company intends to double this in five years. “We currently have some 15 account managers offering total UK coverage,” he said, “and we have now fully recovered the business levels lost at the start of the recession.”

HHF is a long standing member of the UK National Association of Commercial Finance Brokers (NACFB) which Crook stressed is “doing some really good work in passing over a positive message that asset finance is an extremely viable option for small businesses”.

Cabot Square Capital has an 18-year history of building leading financial services businesses.  Recent investments include: LDF (working capital loans to professional services firms and SMEs), Asset Alliance (commercial vehicle finance), Centric (invoice finance to SMEs), 5D/Interbay (small ticket commercial mortgages) and Signature Private Finance (bridge lending to small property developers).