IT business loans boom for IT sector

Vendor finance provider Syscap secures close to 30 new IT customers in first quarter

Syscap, the UK’s leading independent finance provider for IT, has welcomed close to 30 new IT resellers and ISVs as clients in the last quarter, marking a boom in the UK IT sector’s use of financing to fund new assets and services and achieve growth.

This 10% increase in Syscap’s IT client base follows the re-launch of its IT channel partner programme in April this year and shows that resellers and ISVs are choosing finance to make investments in cloud and subscription based services, and to expand their client base by offering more flexible payment options.

Some of Syscap’s latest sign ups are also using its unique Support Funder product to finance services and support alongside traditional IT assets – including wireless solutions company APC Solutions and CAD software provider Desktop Engineering. Service funding is a key focus for Syscap which aims to help IT providers to deliver simple to buy, on-premise and cloud IT solutions with a single finance agreement.

Syscap’s other new IT sector clients include cloud solutions provider Outsourcery and CAD software provider Concurrent Engineering. They join a further 250 companies which are already benefiting from Syscap led vendor finance programmes including Sage, Autodesk, Infor, Softcat, Viglen, Datel and Advanced Business Solutions.

Philip White, Managing Director of Syscap, said: “We’ve been helping companies invest in technology for 25 years now but have seen a sharp increase recently in the number of IT providers needing more flexibility as they change their own business model to a subscription base or need to help their customers reinvest in IT to innovate and grow. We allow them to collect cash up front whilst removing the overhead of monthly billing which we take on”.

It’s a point that both resellers and ISV’s support.

“The great thing with Syscap is that I can include everything in the deal. So in addition to any hardware, the client can spread the cost of any support and professional services,” explains Don Finley, Managing Director of faIT. “Syscap’s flexible finance allows them to spread the whole cost over the life of the asset. Here at faIT we take great pride in offering our clients the best value for money and a great service and I look for partners that do the same. Syscap ticks all the boxes for us and our clients.”

“Swiftpage is committed to working with our channel partners to grow revenue by delivering a customer-centric sales process. Partnering with Syscap enables us to bring innovative funding solutions while Syscap takes care of the finance,” said Lindsay Boullin, Vice President and Head of Marketing and Operations for Swiftpage International.

For further information please contact us, or visit our IT Finance page

Introducing… Philip White

Philip White has been part of the Syscap team for more than two decades; moving from Sales Director to CEO and more recently being appointed Managing Director, he has been an influential figure in the growth and success of our company. We caught up with Phil to talk commitment, company cars and Crystal Palace…

Phil’s strong work ethic and people values were instilled by his parents from a very young age. “They taught me that life is all about striking a balance between trying to be the best, and recognising that life is short and enjoying the journey.” As a child and as a teenager, Phil had aspirations of becoming a professional footballer; he played for a number of teams and was a ball boy for his (still) favourite club, Crystal Palace. Yet, despite this commitment to the sport, he simply wasn’t professional standard.

But, all was not lost. Playing and supporting football equipped Phil with essential skills he would come to need later in life. “The sport taught me about team ethos, culture, camaraderie, support, respect and commitment.”

Not knowing what he wanted to do, Phil attended CDT College for two years where he learned about the business side of catering. His Dad was a bookkeeper for a catering company at the time, so it seemed like a viable career path.

Fresh out of college and aged 18, Phil found himself flicking through a job magazine when one advert grabbed his attention: salesman at Smithfield Meat Market. It wasn’t the role itself that caught his eye, but the fact that the job came with a company car. Phil applied and a couple of weeks later, he made his way to the market for his first shift.

“It was a defining role for me,” Phil said. “Smithfield is steeped in history and culture. It was character building.” Working at the market taught Phil a lot about serving customers; his clients ranged from independent butchers to large department stores and 5 star restaurants, and they all had different needs and requirements.

Though Phil enjoyed his job he didn’t see it as a long-term career, and so 18 months later he left the market to become a trainee negotiator for an estate agent. The property market was booming at the time but more importantly for Phil, there was another company car involved.

“The company was revolutionary in its approach to property management. They were customer-centric and pro-active in the way they helped clients buy and sell property.” In no time at all, Phil was promoted to a senior sales position, before becoming the company’s youngest manager of a newly-opened branch in Fulham. A couple of years later, however, the company was acquired by a large bank and all of a sudden, it lost that sense of entrepreneurship, energy and customer service Phil loved so much.

“My first jobs were sales positions, but it never really felt like I was selling. What I was more focused on was engaging people. It was more about understanding customers’ needs and ensuring they were satisfied.”

Phil’s first foray into the leasing market came when he landed a job as a sales assistant for a leasing firm. The firm specialised in leasing cars to SMEs and corporate businesses and Phil soon learned that it’s better to get the best out of what you have, instead of continually looking for more. “I realised that once you supplied and leased to customers, they had other needs – plant, machinery, technology needs, for instance.”

Phil worked for the leasing company for a short while before moving to MSB International. He had developed an interest in the IT market and this new role offered a fast-track into understanding more about it – what it was, what it did, and how it could serve different businesses.

With a sound knowledge of the leasing industry and the IT sector, Phil secured a job at Systems House Group, now Syscap, in 1993. Despite knowing all about the IT sector, Phil had little experience with the technology itself and so felt daunted when he was presented with an Apple Mac Classic on his first day at work. “I didn’t want to admit that I was basically computer illiterate.”

Phil’s first job at Syscap involved engaging with dealers to help them sell their equipment. Phil’s computer competency improved over time and he began progressing through the business, helping to lead the company into different markets. “You’ve got to be prepared to do the hard yards. I noticed huge growth potential in Syscap, and I wanted to be part of that growth story.”

It’s been nothing short of a rollercoaster ride for Syscap, which has survived buyouts, restructuring and an economic meltdown. “We have some of the best people in the industry and it is their customer-centric approach and loyalty that has resulted in our success. As we enter our next stages of development, I can’t help but feel incredibly excited.”

Phil admits that he wouldn’t be where he is today if it wasn’t for his wife and four children. “They have been incredibly supportive and have given me the platform to invest time in the business.”

Phil’s three sons and daughter all support Crystal Palace and hold season passes. “Whether it was a case of me influencing them or inflicting it upon them, I’m not too sure.” Phil’s youngest son manages his own football team, and Phil finally managed to get out on the pitch last month.

“As I sit here, thinking of my family and looking out over the office floor, I can’t help but feel incredibly blessed. Sometimes we just get lucky, and we’ve got the make the most of that luck.”

Find out more about Syscap’s journey over the last 25 years.

Happy Birthday to Syscap! 25 years old!

There’s certainly cause for celebration this week, as Syscap officially turns 25 years old! We’re extremely excited to reach this milestone and as our birthday approaches, we’ve been reflecting on how far our company has come since its inception in 1990. We have been thinking back to all our major achievements, and to the challenges we’ve faced and managed to overcome.

Over the years, we’ve tapped into new markets, extended our services and acquired new businesses. We’ve experienced buyouts and major reshuffles to our infrastructure; we also fell head first into the economic crash and came out the other side. Yet, through it all, our principles and values have remained the same – perhaps that’s why we’re still here today.

At the start

When we first entered the market, the technology landscape was drastically different to how it is today. It was rapidly evolving and much of the demand was driven by SMEs. However, the challenge those small businesses faced was the high level of investment needed for technology. Many businesses couldn’t afford paying in full for tech, and banks didn’t make it easy for them to acquire finance. And so, we saw an opportunity.

From the offset, our value proposition has been the same: leasing made easy. We saw huge benefits in this model – a high-touch, value-driven engagement model. Banks didn’t understand the IT channel, the SME or technology markets, but we could provide that level of knowledge and expertise needed.

At this time, we were a modest business that had limited access to capital, and we didn’t want to take any real commercial risk. Our next safe bet was focusing on areas of commercial growth, which resulted in us embarking on our most successful industry-leading campaign to date. Coinciding with the release of the Labour Party manifesto, we spent 12 months researching how technology could be effectively implemented into UK schools, and it wasn’t long before we became a trusted advisor to the education sector.

Into the new millennium

Entering the start of the millennium with confidence, we decided to extend our services to offer IT finance solutions for paper and medical professions. We researched thoroughly in order to understand why the sectors invested in technology and how we could extract value from the marketplace. To aid our efforts, we acquired Professional Finance and Leasing; a company with deep-domain knowledge of funding technology in our target sectors.

Offering these services proved incredibly successful and Syscap was growing year-on-year. We became specialists in our field and had three main competences: finance experience, IT and technology experience, and vertical market experience.

Yet, we still felt that we didn’t have enough access to capital, and we needed increased support in our back office infrastructure. So, after much deliberation, in 2006 we underwent a management buyout from AnaCap. The fund, which was new with no investors, was committed to financial services and concerned with operational management: it was the perfect choice for us. The company helped us to transition and in 2008, we had our best trading year to-date. But then, the business world imploded.

Hitting the credit crunch

The economic downturn was extremely hard for us and we were forced to make some tough decisions, cutting our workforce by over 30% over a 15 month period. However, then and now, our company is blessed with some of the most talented employees in our industry. It is not only their skill, but their ethics and camaraderie that pulled the company through its darkest days.

We managed to pick ourselves up in the years that followed. Some services fell by the wayside, while others remained stable. In 2010 we acquired Exclusive Benefits Ltd, a specialist commercial finance provider with extensive experience in the professions sector. This improved our access to funding and allowed us to move through into 2010 and beyond.

The here and now

Fast forward to 2014 and we fulfilled our potential for further investment and access to capital. Last autumn, we started a review for exiting our investors, knowing that we needed to partner with a company that had proven access to funding on a quantum scale.  So, in February this year, Syscap was officially acquired by Wesleyan Group.

Wesleyan was the perfect choice for us: established in 1841, the company has proven vertical market knowledge and £6 billion worth of assets under management. Wesleyan felt that its company’s values were culturally aligned with our own; it wanted to invest in long-term growth and not short-term gain. The services we offer are different, which means we can leverage their expertise and combine it with our own to provide our customers with exceptional service.

Following the acquisition, we can’t help but feel extremely optimistic about the future. We’re looking past today and tomorrow and planning for the long-term. Through the hard work and dedication of our employees, and loyalty of our customers, Syscap is liberated to move forward. Here’s to many more happy birthdays!

Syscap acquired by Wesleyan Group for IT financial products

Syscap, the UK’s leading independent finance provider, is delighted to announce its acquisition by mutual financial services specialist Wesleyan. This agreement builds on Wesleyan’s expansion plans by bringing Syscap’s expertise IT leasing and asset finance to the company’s formidable portfolio of financial products.

Commenting on the newly announced deal, Syscap Managing Director Philip White says:

“Syscap has always been committed to making decisions that will benefit both our customers and our business goals. This news means that the work we do in the professional and IT leasing space is now supported by Wesleyan’s strong list of personal and commercial finance services. We look forward to joining a group with a strong heritage and a keen eye for the future.”

The announcement follows Syscap’s recent commitment to the IT channel and comes in the lead up to the company’s 25th birthday.

Wesleyan’s Chief Executive, Craig Errington comments: “This is an exciting acquisition for us; Syscap is a strong, successful business that operates in professional markets very similar to our own.  They also have the same strong focus on quality specialist service, based on a real understanding of their customers’ needs.”

Bryan Jackson CBE, Wesleyan Chairman adds: “This acquisition is a clear intent of our desire to increase the range of services available to our customers while building on our existing capabilities.”

Syscap’s 69 staff will remain based in their current offices in New Malden and Northwich.

The move was facilitated by a fund advised by AnaCap Financial Partners LLP. AnaCap was advised by IMAS Corporate Finance with legal advice provided by CMS. Management was advised by Marriott Harrison.

Wesleyan was advised by Deloitte’s dedicated regional financial services team who provided lead advisory, transaction due diligence and structuring advice. The Deloitte teams were led by Darren Boocock, Simon Thompson, Richard Monahan and Peter Croom. Legal advice was provided by The Wilkes Partnership, led by Jeremy Parkin.

We’ve just been nominated!

We’ve had a great start to the year. A busy January with Tax season, and February is proving an exciting month as we’ve just found out we have been nominated for two very exciting awards.

Commercial Finance Provider of the Year 2015  
British Credit Awards

This category is awarded to those organisations who can demonstrate innovative solutions for the marketplace in lending to businesses. Customer service and satisfaction are key criteria to come out on top in this category. For more information about the awards, click here.

The British Credit Awards take place on Wednesday 11th February at The Brewery, London.

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Finance/Support Services Provider of the Year
European IT & Software Excellence Awards

Nominated by one of our strategic channel partners, Softcat, this category recognises independent organisations who are a vital part of the channel community through helping channel partners win business, and look after customers. For more information about the awards, click here.

The European IT & Software Excellence Awards take place on Wednesday 25th March at The Lancaster London Hotel.

IT-Europa-Excellence-Awards-Finalist-2015-Syscap

 

Syscap are dedicated to providing our customers with a great service and complete satisfaction in the solutions that we provide and work hard to improve our processes and offerings to better serve the needs of the organisations that we work with, whether customer or partner. As such we are thrilled to be nominated for these illustrious awards categories.

 

We have moved!

Syscap HQ has moved from its home of 16 years at Wimbledon Bridge House. But where one chapter ends, our next adventure has begun. We have moved to our brand new home in New Malden.

Syscap Ltd CI Tower, 8th floor, St George’s Square, New Malden, Surrey, KT3 4TE

Our main switchboard number has moved to +44 (0)333 123 1990 but don’t worry, our direct lines and fax numbers haven’t changed.

Additionally, our Northwich office details will remain the same. The move should not impact you if you currently have a live agreement with us, but please contact your Account Manager who will be happy to help if you have any questions. Alternatively you can call the team on +44 (0)333 123 1990 or email helpdesk@syscap.com.

IT Commercial Finance Firm Syscap Reports Fourth Year Of Growth

Syscap, one of the UK’s leading independent finance providers, announces its results for the year ended 31st March 2014 (“FY14”).

Highlights

  • 12% increase in new business volume to £140 million
  • 6% EBITDA growth to £1.8 million
  • 5% growth in origination income to £5.7 million
  • Productivity (volume per head) up 12%
  • Average deal size up 9% to £36k

Syscap’s CEO, Philip White said:

“FY14 was another good year in which we made considerable progress on multiple fronts, which has left the Company well placed for the future. I am pleased to report that the investments we have made in expanding our online capabilities have yielded significant results. This has enabled us to launch new products, improve our position in the legal sector, secure a key new affinity partnership with the ICAEW and cement our place as the pre-eminent supplier of Vendor Finance to the IT channel. As Syscap approaches its 25th anniversary we remain well positioned for long term, profitable growth based on our core sales, marketing, credit and portfolio management competencies and our overall innovative approach to business.”

Chairman’s Statement

John R Allbrook, Chairman

Syscap has continued to make good progress over the last twelve months and in FY14 has delivered a further improved trading performance.

Business Review

Market conditions have marginally improved in line with the overall UK economy and the Broker finance sector, according to data provided by the Finance and Leasing Association, grew by 4% over the course of the year. Against this backdrop, the growth in the Company’s new business volumes has outperformed the market threefold and over the last four years has more than doubled. This has been achieved by a keen focus on meeting the needs of our customers in our core markets.

The Vendor division, which focuses on providing vendor finance predominantly in the IT sector, continued to produce strong results. Our focus in FY14 has been on improving lease penetration across our major vendors. Additionally, we have launched new products and made investments in extra sales resources, which will drive further profitable growth in FY15.

In the Professions sector the Company’s exclusive affinity programme with the Law Society goes from strength to strength. Our flagship Practising Certificate programme for law firms, now in its eighth year, generated a record number of applicants with 96% (FY13: 73%) of all applications being received online. The improvements made to the online portal and marketing of this programme drove an improvement in total finance volume of 3%, with an unprecedented 1,760 UK law firms choosing to finance their regulatory fees with Syscap. In recognition of the progress being made and the exciting plans going forward, the Law Society decided to extend its exclusive affinity agreement with the Company.

Additionally, we have been able to grow our business volumes across our portfolio of short term loan products (e.g. Tax, Professional Indemnity Insurance, VAT), as well as launching a new short term business loan product for non-professions SME clients. This new product delivered impressive new business volume of more than £4m across 59 deals in FY14 and has excellent growth prospects in the future.

In November the Company signed an exclusive affinity agreement with the ICAEW, which will help increase penetration in the Accountancy sector. By the end of FY14 originated volumes had already exceeded £4 million and we look forward to strong growth in this sector in FY14.

Syscap’s leading brand and market position were once again recognised within the industry through a number of awards including:

  • Leasing World – Vendor Finance Lessor of the Year 2013; and
  • Leasing World – Professions Finance Provider of the Year 2013

Financial Review

The growth in origination income and vigilant control of operating expenses enabled the Company to post improved financial results in FY14. EBITDA grew by 6 per cent to £1.8 million and the continued focus on operational efficiency yielded an increase in EBITDA margin from 20 per cent to 21 per cent.

Syscap adopts a hybrid funding model to not only provide its customers with appropriate access to finance at competitive rates but also to enable it to provide a broad range of products. Syscap originates transactions for its managed portfolio, backed by wholesale finance, block discounting and a revolving credit facility, and brokes transactions to a panel of funding partners. In FY14 the total portfolio continued to perform comfortably within our range of expectations, with arrears and write-offs remaining well below market levels. This reflects well on the quality of credit decisions made and on our approach to portfolio management, which are critically important to the future aspirations of the business.

By the end of FY14 the Company had further repaid its senior debt position with the Royal Bank of Scotland to £3.9 million. Additionally, since year end the Company has repaid a further £500,000 of senior debt reducing the EBITDA multiple to below two times. Syscap also renewed its revolving credit facility of £10.75 million with the Royal Bank of Scotland.

Relationships with the bank and key funding partners have never been stronger and the Company continues to have access to sufficient funding from which to meet its growth projections for the year ending 31st March 2015 (“FY15”) and beyond. The management team works closely with all key funders to develop long term, transparent and mutually profitable relationships and would like to express its thanks to our partners for their continued support, which has been critical in helping the Company to deliver improved results in FY14.

Staff

The quality, skill and endeavour of all employees at Syscap have played a fundamental role in the improved results reported today. On behalf of the Board, I would like to take this opportunity to thank them all for their invaluable contribution.

Outlook

Syscap operates in the £170 billion UK SME financing market, providing innovative financing solutions to niche markets in the form of IT leases and short term business loans. As the UK economic recovery accelerates it is reasonable to expect an increasing demand for its products and services. Syscap will continue to selectively pursue profitable growth opportunities within its target markets, while maintaining the highest standards in credit and portfolio management. Our outlook remains positive and the Board is confident of the Company’s future prospects.

Syscap Unveils New Website

Syscap, the leading independent provider of finance, is pleased to unveil its new website. The new website has been designed to be more responsive to individual customer making the journey to specific finance solutions easier and quicker.

Syscap provides specific-purpose finance solutions to enable clients to manage their cash flow more effectively. With tailored solutions for IT suppliers – vendors and resellers; professional practices; SMEs and the education sector, Syscap serves a broad range of customers. The website meets customer needs by offering them a quick and easy route to the most appropriate product for their business purpose.

Philip White, CEO of Syscap, says: “Syscap has been offering financial solutions to our clients for nearly 25 years. Our success is based upon a good understanding of our clients; commitment to meeting their needs and a culture of fast and friendly service. Our new website has been designed to reflect all of those things.”

 

Late payment is a fact of life but does it have to be?

Cash flow is again top of the agenda for small businesses with a new study showing that the majority of businesses make late payments to suppliers. The Mastercard study found that a full 57% of businesses had deliberately delayed payments. You can read the full study here.

Despite 90% of businesses acknowledging that suppliers should be paid promptly, nearly three quarters of businesses admit that late payments are a fact of life. Cash hoarding has far-reaching impacts throughout the supply chain as many small businesses will know.

In recent years, the operating environment for has been difficult for all businesses. In the IT world in particular, IT resellers have been squeezed not only by the constraints on bank lending but by SaaS innovators which have changed customer perceptions of how to pay for software. When combined with a culture of late payments that seems to be growing, it creates particular challenges for smaller vendors and resellers.

Syscap has been providing IT finance solutions for nearly 25 years. We have worked closely with our partners and clients to respond to some of these challenges. It led us to launch Support Funder earlier this year. It allows vendors and resellers to receive upfront payments for annual revenues and removes the need for monthly invoices or administering direct debits.

We also understand that for many resellers the most important part of their business is the services and maintenance that they sell alongside the hardware and software. So we have structured the product to include intangible services. If you would like more information about Support Funder, contact us.

At Syscap, we often talk about our business being innovative and dynamic – but innovation is only relevant if it meets a customer need. To use a familiar turn of phrase, “Necessity is the mother of all invention”. Support Funder is the invention but the necessity is the culture of late payment which seems to pervade the business environment.

We often hear from our channel partners about how they have had to offer monthly direct debit options because a competitor is prepared to do it or resellers who are spending time and effort chasing invoices – even for relatively small amounts of money.

To return to our analogy, cash flow is the necessity and Support Funder is the invention. But Syscap and our channel partners are working together as proud parents in this situation. We hope that you keep giving us feedback, telling us your concerns and sharing experiences. It drives us to create better products that meet your needs. We look forward to hearing from you.

Philip White, CEO