It was pleasing to see the recent figures from the FLA suggesting that there has been significant growth in broker introduced asset finance business.
As a ‘broker only’ asset finance lender this is excellent news as we believe that brokers play a vital role in the market, helping SMEs to choose the right funding options as well as the most appropriate lenders. It also signals that brokers are fighting back against the direct lenders. According to the FLA, new business introduced by brokers in March 2017 totalled £615m, an increase of 29% compared to the same month last year. In addition, in Q1 2017 broker introduced new business was 25% higher than in Q1 2016.
We’re obviously keen to support brokers as much as we can and we continue to develop the UTB team to take advantage of this and future growth in the asset finance market. As well as developing the team to improve the service to brokers, we’ve also enhanced our credit and underwriting capability. We constantly review our criteria so that we can offer funding to an even broader range of customers and our ambition is to increase our own volumes as the market expands and to have the right people, products and processes in place to respond to the growing demand, at the same time maintaining our high broker service standards.
The asset finance market is extremely competitive and the new entrants to the lending arena which have appeared over the last few years have increased broker and customer choice. Between us, asset finance funders provide solutions for SMEs in a greater variety of circumstances and with an ever increasing diversity of assets requiring funding. One sector which stood out in the FLA report as experiencing a marked upturn in activity was funding for plant and machinery. Coincidentally this is one of the sectors we’re looking at to extend the range of assets we’ll consider funding and we should be making an announcement along those lines soon.
[color_quote]With many SMEs still finding it hard to raise capital for expansion or acquisitions through their usual business banks, or simply wishing to have their financial eggs in several baskets rather than one, we have been particularly busy with refinancing deals. One such transaction, completed in April this year, was a £950,000 refinance for an expanding bus and coach operator.[/color_quote]
Our longstanding knowledge and experience of the sector was vital in being able to consider, approve and then pay out the deal in a matter of days. This is the kind of flexible and responsive funding which is helping to drive SME interest in asset finance and we fully intend to keep supporting brokers and borrowers to seize opportunities for investment and growth.