With his company marking its 20th anniversary, Stephen Clark of Eagle Asset Finance spoke to Forestry Journal about his continuing journey through the intriguing world of forestry finance.

THIS month marks two decades since the formation of Eagle Asset Finance, the specialist forestry finance broker, which advertised its launch with an article in Forestry Journal.

‘The Eagle has Finance’ said the headline in our issue of December 1999, with the accompanying story explaining the company was a new venture for Stephen Clark, an asset finance expert with four years of experience focussed on forestry.

He said he aimed to provide help for new-start businesses through to well-established companies, offering them the reassurance of dealing with someone who understood their industry and would work to provide the best rates, help and advice available.

A lot can happen in 20 years, but today, Eagle Asset is still providing the same valuable service and Stephen said he was delighted to be celebrating the firm’s anniversary.

He said: “It doesn’t feel like 20 years. It’s certainly a milestone, but the time has passed quickly. I think it’s quite a good sign; it’s not dragged. There have been difficult times, like during the credit crunch, but challenges like those help you to learn lessons and become more resilient.”

It was certainly humble beginnings for the company when it launched – and a bit of a gamble for Stephen himself.

He explained: “At that point I was working for a finance company. I had a young family and was used to having a company car and all the benefits of being an employee. It was quite a jump into the unknown. That’s where the eagle came into the name. When an eagle’s chicks are ready to leave the nest they have to get out and soar. I left an employment which offered safety and security for completely new territory.”

Forestry finance, at least, was not new territory. Four of his 12 years working in various asset finance positions had seen him focussing heavily on the forestry sector, which he discovered he had a real passion for. When this was put at risk, he decided it was time to go into business for himself.

“The company I worked for was taken over and taken over again,” he said. “I ended up in a situation where I’d left one finance company and then, three years later, was working for the same company, in the same office in Edinburgh. They wanted to take the business in a different direction and had no appetite for forestry, but I knew there was a market out there with a lot of customers.

“I started small, working out of a single room in my house. If you shut one eye it was my bedroom and if you shut the other it was my office. It wasn’t ideal. Back in those days the business was all done by fax and we would be woken at 5 a.m. by customers faxing Eagle Asset before heading into the forest. Before long we moved house and got a custom-built office, and everything became a bit more manageable.”

Forestry Journal: Arranging finance deals for the purchase of new forwarders and harvesters (such as this John Deere 1270G for G. J. Sheppard) is the bread and butter of Stephen’s business.Arranging finance deals for the purchase of new forwarders and harvesters (such as this John Deere 1270G for G. J. Sheppard) is the bread and butter of Stephen’s business.

Advertising in Forest Machine Journal (as it was then known) was one of the routes Stephen went down to attract new business. He also had well-established relationships with a number of dealers and encouraged referrals from existing customers. Today, he’s proud to say that a lot of customers have stayed with him from the beginning, providing a lot of repeat business.

“In forestry, a lot depends on trust and knowledge,” he said. “You do get some quite fancy, well-established finance companies venturing into forestry, but a lot of times they don’t understand the customers, the assets, the whole ethos and they come out with the wrong perspective. The forestry customer in general just wants a finance company to do what it says on the tin. They don’t need you to be all singing, all dancing, flashing lights, etc. If you can give them a good service and look after them, they become friends over time, rather than customers.

“I don’t know, three months down the line, what kind of business I’ll have. You’re very much reliant upon good will and loyal customers. That’s quite an intangible thing, the good will you build up and the reputation you might have. It’s a relatively small sector and if you do anything that’s not right, it can spread quite quickly, so you’ve got to have integrity and do what you say you’ll do. You’ve got to be honest with people and, if you are, they’ll want to deal with you again. If not, they won’t.”

For Stephen, the business isn’t just about introducing people to finance companies and getting a commission. A lot of the time, unseen elements at play behind the scenes can be far more important.

“If a customer gets into difficulty at any point during an agreement, it’s about helping that customer and getting them back to a place where they’re able to get back on their feet,” he said. “Lots of times it’s unforeseen things that have caused them to get into difficulty. I’ve had occasions where people have been threatened with having their homes repossessed and things like that, but I’ve managed to help get them to a point where they’re back on their feet, they’ve still got their house and their business has managed to survive.

“I get as much satisfaction from that kind of thing as I do from bringing in new business and I don’t charge extra for it. You have to look after your customers.”

For Stephen, that also means travelling the length and breadth of the UK to see his customers in person, wherever they may be.

“You get to know your customer a lot better by going to see them, spending a bit of time to learn about them and their business needs. If I was to do all my business over email, what’s to stop that customer, in the future, thinking ‘I’ve never even met the guy, I’ll go somewhere else’?

“It’s good to have a personal relationship and it helps that the sector is full of hard-working, honest people. I would say working in forestry finance is enjoyable and that’s half the battle. I’ve thought about diversifying a number of times over the years, but I always return to the same spot because it’s what I know and enjoy.”

Things haven’t changed too much since Eagle Asset began. Faxing has fallen out of fashion and Stephen has taken on an extra member of staff (his wife and company director Kirsteen), but the bulk of his business – financing harvesters and forwarders – remains the same.

“The forestry industry itself is a lot more professional now,” he said. “The sad thing is that rates haven’t really changed over that 20-year period. The machines have become more efficient – they cut more timber, have better fuel efficiency and such like – but the contractor hasn’t been given the benefit. These guys are investing a lot of their money and putting their name on the line for a machine costing £400,000, but not getting their due reward. I think it’s quite unique to forestry that someone could put such an investment into a machine, but not get a return that’s as good as it should be.”

That means a finance specialist like Stephen can be crucial in ensuring a contractor gets the best deal available, particularly if they’re looking to make their very first purchase.

“If someone calls me in the early stages, I can give them a good idea of what the criteria would be, what they’ll have to come up with to get an agreement in principal, so they can then shop around for a machine,” he said. “I can be honest with them if there’s too many negatives. The most important thing for someone starting out is that they’ve got evidence of work ahead, showing how they’re going to make their monthly payments. After that, you need the background worth. If they’re a homeowner or have some other assets or a guarantor, that can all be thrown into the equation to provide security. There’s any number of permutations you can put together, but by speaking to me first they can find out the chances of getting finance and the best way to go about it.”

For more information on forestry finance, call Stephen on 01506 400772, email sclark@eagleasset.co.uk or visit www.forestryfinance.co.uk.