By feature writer Fiona Scott
Mike Randall doesn’t look disruptive. So many business owners call themselves ‘disruptive’ when they are not – they are not creating a deep and lasting change to a sector or industry. They simply like the word and ‘hope’ it applies to them!
This 50-something businessman, who lives in London, might come across in the first few seconds of meeting him as a bit of a ‘banker’ yet that glint in his eye, that passionate tone and the vehemence with which he supports the SME sector, stand him apart.
This is a man who wants to change the culture around lending money to small business owners by bringing personality, gut feeling, trust, due diligence and speed to lending.
What nailed it for me was the story he told me about a London cabbie at the very end of my interview:
“We got to Euston station, just at the end of the pandemic and I’ve got one of my female staff with me in an electric cab. And we fund a lot of electric cabs, so I love speaking to cabbies because you get a proper conversation.
I said ‘how’d you like your electric cab?’ and he says ‘well I love it.”
He says, ‘but it’s not mine’.
And I said: ‘oh, right. Why? Why isn’t it your’s?’
He says: ‘oh, long story’
So, he gives me his life story.
“I was put in the hospital with six months to live.’
I said: ‘oh, I’m sorry mate.’
And he said: ‘well, now it’s a problem because I stopped paying everybody because I was going to die. Seven months later they told me that they’d misdiagnosed me and my credit rating is through the floor. In between this my wife was having an affair, so I divorced her. I lost everything.
‘I’ve got no credit rating, a mate of mine has lent me his flat for £200 a week and I’ve gone with this company who I pay £xxx amounts of pounds a month and they rent me a cab. So that’s my life.’
So I said to my colleague in the car: ‘Would you lend him money for a cab?’
She said: ‘I think I would, Mike, because you didn’t ask him to tell you that story and he’s not made it up.’
So I gave him a card and I said: ‘if you want my friend, I’ll lend you the money.’
And we did – and he’s paid on time every payment and he has his own cab.”
Meet Mike Randall, founder of Simply Asset Finance and Board member for the Finance & Leasing Association and the Leasing Foundation. Find out more about his company and team here https://simply.finance
What makes Simply different?
In 2017, I started Simply, and the reason I did was the fact that the industry I’ve come from is, in my opinion, stuck in the past. If you want to buy a digger or a truck to support your business that experience is painful.
Bearing in mind you can go and buy a car now and it’s just done on a tablet whilst you’re there and you drive off in the car. You want to buy a film on Netflix, you go on your phone and you buy it.
However if you want to buy a truck, you have to fill in loads of paper forms and you have to photocopy your life history, bank statements and accounts, and then somebody takes it all away and then you might get a decision in a week.
And I just thought that was a load of rubbish and with the technology now available to us, it’s increasingly irrelevant. When I launched Simply, backed by Cabot Square Capital, we all wanted to make a difference. The idea was to build this company through the eyes of a customer.
We wanted to make that lending journey wonderful and not a pain in the backside. We often coin the phrase or tagline – technology with a handshake!
Ironically when I started, even with my many years’ experience, I couldn’t even open a bank account, and I could only get three mobile phones on a contract from a provider for my team then – even though I had guaranteed backing of £60m on the table. I myself was at the mercy of the very system I want to change.
Where have you come from?
I joined the asset finance industry by chance when I was 19, and I worked for ten years at an asset finance company owned by the Bank of Scotland which is where I got my grounding and fell in love with the industry.
I was able to go and help businesses flourish, grow and sort them out. I had the thing called ‘money’ and I quickly became aware that it’s a people business and those people often have dreams of creating new start-ups whether it’s a truck company or a digger company, or a crane company.
These people have wild dreams and they put their lives on the line to start businesses, and I was able to facilitate acquisition of assets for them.
I’d sit around the kitchen table, the boardroom table, and we could make things happen and we would create employment.
And I just found it fascinating to be honest and very satisfying that I had a part to play in buildings people’s livelihoods.
I stayed there and then I went to Close Brothers where I spent 22 years and we built a huge company and in 2011 I was appointed Chief Executive. When I took it on, I had about 350 people and in 2016, when I left, I had about 600 people and it was about a £2 billion book again, serving the SME community.
How has it been since starting Simply?
We’re in our sixth year and we’ve lent over £1.1 billion to over 6,500 customers and we currently have 134 staff and growing.
The vision was that if you are my customer you don’t have to get out your chair for me to give you a credit decision.
I can get all that information by you allowing me to have it because it’s publicly available. With your permission.
We’re API into open banking. We’re API into all the search agencies, proving identity, all that stuff happens in seconds and I can give you a decision in minutes, not weeks. (Application Programming Interface)
Everything’s all in the Cloud. We have e-signature documents, so as an example, and we’ve tested this recently. Two gentlemen walk into an auction and they want to buy two pieces of equipment at £120,000. Obviously, they didn’t bring all their information with them.
They left with those assets 35 minutes after meeting us. And that was all done through a smart tablet and a mobile phone. What we’re trying to say is we are open to lending to the great SMEs in the UK. And we give umbrellas out in the sunshine and the rain.
We don’t take our bat and ball home if times get rough. We are always there for our customers and in more recent times, you know, pandemics, wars, cost of living and inflation yet businesses are resilient out there, but they do need someone to hold their hand when it comes to their finances.
Tell us more about the tech?
Think Simply Connect.
There are three sides to it. There is number one, our internal salespeople who deal with customers who use it.
There’s the Simply App and we also have rolled it out to the broker community because obviously there’s quite a lot of brokers out there that deal with customers.
We’re just about to launch our customer app.
Now in my industry, there’s a lot of outdated legacy of a lot of large, horrible onerous platforms out there.
For a lender to change that will cost them hundreds of millions of pounds because they need to go back to the beginning and build something new.
Nobody has started an independent finance company like this one, of this scale in the last 50 years.
I know I’m years ahead of anybody else in the industry, and that’s an industry problem really, because no one’s invested, and no one’s actually moved with the times. We are ahead of the curve.
How much will people pay in interest if they take finance through Simply?
The large banks, if you’ve got a lovely balance sheet and you are low risk, (pre June 23), they would lend you money at somewhere between four and five per cent. Now, obviously we know how the cost of funds has gone up which is reality. In my life I’ve never lent money at four and 5% because that’s just not my market.
The SME market, it does come with a bit more risk because they’ve got lesser balance sheets and there’s always a story about something so, they would be paying somewhere between nine and 12%, I would suggest.
And what’s interesting today is the fact that if you take a High Street bank, then their rates have basically come up to touching our rates because of the cost of funds.
There is resilience out there in the SME sector. I mean we talked to hundreds of our customers recently and they are so fed up with bad news that they’ve said they are just going to get on with it.
If I buy a truck and it costs me £30, £40 a month more because the interest rates higher, I’ll just work it out and work through it. We’ve seen over 30% growth this year so far in terms of traffic and lending in our space.
So, people are just getting on with it.
Tell us about that culture you are trying to create?
So I’ve spent an inordinate number of years in the culture piece.
With Simply the first thing we wrote on that blank sheet of paper was ‘culture’.
It goes into the concrete of the business to make sure that everybody understands who we are, what we are, what is good, what does good look like, how are we going to agree what our values are going to be and how behaviour works in my business.
My job is to make sure that my staff wake up on a Monday morning, punch the sky and think I love my job. And that is my culture.
I’ve got 134 amazing people and I think it’s interesting that I’d rather take a blank CV on with someone with great attitude, passion, and just a belief that they can do it and I’ll teach them the rest.
Our ethics are: transparency, trust, and values. For me it’s all about trust and the other values come from that. It’s not just about trust within the staff. It’s about trust with our customers. We have a commodity called money. And money brings the best and the worst out of people.
Trust is massive to the SME world. I’ve got an example to illustrate that. I had a customer who was one of my oldest going back many years. He was a farmer in Cheshire. Don’t get me wrong, he was quite a big farmer in Cheshire, but he started a business that ended up having warehouses galore and doing all the bread deliveries to all the major supermarkets. He ended up with around 400 trucks. I’ve dealt with him since I was 19.
He was asked “why do you deal with Mike, because Mike’s not the cheapest in the world?”
He said: “Mike is my friend and I trust him.”
And last year I was invited to his 75th birthday. He retired, sold out some years ago so I was very pleased to get an invite and he thanked three people in his speech and I was amazed because I was one. He said he wouldn’t have got there in business without someone like me. I admit to being very emotional.
What’s the vision?
We’ve lent just over a billion pounds in the last four years, so my loan book is about £440 million at the moment. When we started I needed to get the company off the ground and I needed to get going and put all the infrastructure in place.
Phase two is, and this is quite an open conversation with our investor, we will outgrow them.
I’m not doing this to be a £400 million loan book. I want to be a £10 billion loan book, and I want to be serving as many SMEs as possible in the UK.
I am hoping that our resilient SME community remain resilient. We’ve seen rates, interest go up and we’ve seen the cost of living is pretty high. We’ve seen inflation which is up there. Hopefully we’re seeing a little bit of positive that might sort of level out a little bit.
The safety of our customers is paramount. Our doors will remain open.
For me personally, from a Simply point of view, I’m going to continue driving growth in this business and I’m going to try and serve as many SMEs out there as possible.
When we grow even more we may see a change of ownership and we talk to the staff about this a lot because apparently psychologically, if you change ownership, it seems that can be seen as an end game. Yet for us it will be another beginning.
I’m hoping whoever we get paired up with in the future, brings in more opportunity and more investments so we can help even more people.
How do you feel about what you’ve achieved so far?
I’m extremely proud of what I’ve done. I can only say that I couldn’t have done it without the people that believed in me. And my co-founder, who was my COO at my previous job, had faith in this as well.
A lot of people have come to my business, who have left big jobs to take a chance on a belief that we have this right and I’m very proud that they did that because that’s a big move.
And I genuinely believe that culture is everything, alongside behaviour, trust and values. So that’s what we’re building here. I’m very pleased to have my own faculties back in my own control to build something through my eyes, through the customer’s eyes that works properly.
I was once told by one of my friends who is a psychologist, if you can create the right spirit and momentum, in a business, then you can become unstoppable.