brokers
Brokers have become very important to lessors’ business origination strategies and we at LeasingWorld have instituted a regular monthly corner of the magazine where we can feature brokers’ views and current thinking.
Is it over yet? Asks Adam Tyler, Chief
Executive of the NACFB As Brokers we have had a really difficult last two years or more, but is the tide beginning to turn or not? On the eve of the NACFB Asset Finance Seminar in London, Adam Tyler Chief Executive looks at the current position of the broker market and concludes:
I
have written recently in the Commercial Mortgage press of the anomalies of their market compared with the news from the consumer sector. But overall, I was keen and still am keen to report that the signs for 2011 are encouraging, but tempered by the current lack of funders in the Asset Finance market.
I have seen a real growth in the NACFB membership of Asset Finance brokers with many years experience in the industry, both as brokers and as part of any number of our providers. This vast depth of knowledge has proven to be invaluable to many SMEs nationwide, only to come to grinding halt when a funder cannot be found or the broker is not on the right panel, for what usually is a very good deal.
There has been great support for the broker market from one quarter in particular and even they cannot have every broker on their panel, despite out best intentions. But what is happening
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now, it may well be best to start with a quote, coming straight from the FLA Industry trends issue 33 – February 2011 - “December saw the recent strong performance by the broker market continue. New business sourced through brokers grew by 50 percent in December.
Direct finance and sales
finance remained relatively weak, with new business down by 2 percent and 14 percent respectively over the same period.”
This is a great quote for the NACFB and the broker industry as a whole, but is this reflected by the ordinary broker in the street, and what has caused this to happen? One of the many remits that I have in my role is to meet and recruit new funders to the Association, as well as trying to expand the broker base of others. The start of this year has seen an upturn in this activity without a doubt, some of it quite niche, and some more mainstream.
If we look at those funders, new to the
market and to the UK, they have approached us for a route to the end user, they want to use the broker channel and they want to use brokers they know comply with a code of practice. These new tranches of funds are now finding their way into the UK economy through the broker channel. It is a very simple process really, the new funder tells us their optimum market, whether it is the sector, lending levels, even rates or a combination of them all as it is usually. I know that with so much expertise within the membership, we will be able to find a good group of brokers to introduce to the new funder. The latest funder was looking for a high minimum lend, but we still managed to find 50 brokers who could supply business at that level with 12 having imminent business.
The example above is not an isolated incident of late. I know that it does not satisfy the huge gap in the market, left by the withdrawal of some of the main funders nearly two years ago but it is a start and with some of the smaller UK players looking to expand their market size, and why not at this time with so much good business to be had, there is a slightly more positive feel about the place. This is further compounded by the early discussions that I am hearing on perhaps more mainstream funders, looking at, or returning to, the market. There will be no overnight miracles I am afraid, however life as a broker should begin to get a little bit better this year, well you could say it couldn’t have got much further the other way!
In a recent report from ratings agency, Moody’s, it was cited that ■
www.leasingworld.co.uk ■ March 2011
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