When I received an invite to the briefing event at the Edinburgh office of global law firm CMS Cameron McKenna, looking at the alternative lending market in Scotland, I jumped at the chance to attend.

Whilst it was clear that a discussion of the challenges and opportunities within a market Signature Private Finance is building its reputation in, would be interesting, the event took on an altogether more exciting perspective given we opened our new Edinburgh office in the same month.

Recognising that alternative lenders like Signature are constantly striving to deliver innovative and competitive products which challenge and disrupt the traditional financial landscape, the insight offered by the panel (not to mention the audience) would be enlightening.

Alternative lending alternative view

One of the most notable insights was that high street bank lending to SMEs for commercial and property activities, is at the same net level as in 2013, whilst the net funding provided by alternative lenders has grown 10x in the same period.

The panel recognised that given the continuing growth of the economy in Scotland, the gap left by the high street banks, between funding required in 2013 and now, is being filled successfully by increasingly sophisticated alternative lenders.

Reflecting the experience of Signature Private Finance, the panel agreed that whilst the finance broker market in England and Wales is strong and well established, it remains relatively immature in Scotland.

The conclusion reached, indicated this situation was caused by a lack of public and professional awareness of alternative funding options and in particular the role brokers can play in helping meet the needs of their clients.

It was agreed that everyone in the sector, needed to do more to raise the profile of the businesses involved, the services on offer and their benefits to property developers across Scotland.

A new office in Scotland

There was recognition however that competition is growing in the Scottish alternative lending market as more providers enter the market, which was a particularly pertinent observation given that Signature has opened its first office in Scotland.

There was also a lively discussion on what part regulation would play and its advantages in the alternative lending and broker markets.

Signature is well on the route to regulation and recognises the importance of voluntarily introducing the necessary checks and balances, before regulation by a deadline squeezes the less well-prepared alternative lenders out of the market for good.

The panel and indeed the audience discussed the advantages open banking might bring in terms of client diligence (e.g. access to bank account conduct) and in terms of seeking opportunities to refinance.

The Q&A session rounded off things nicely, before we all enjoyed a few drinks with canapés and the obligatory networking, where I was able to introduce myself as Signature’s first Lending Manager in Scotland, making plenty of good new contacts and re-establishing some old ones.

There was a lot of interest in my switch from high street bank to alternative lender and Signature opening a new office in Edinburgh.

Many took it as a positive sign that if a business with our reputation sees the potential in Scotland, then they are right to be optimistic for the market in the year ahead, whatever Brexit or calls for an independent Scotland may bring.