Over a third (37%) of commercial finance brokers responding to United Trust Bank’s most recent Broker Sentiment Survey are forecasting more than 10% growth in their businesses in 2020.
The survey, carried out amongst over 100 brokers working in the fields of property and asset finance, revealed their views on the likely trading environment this year, their predicted investment in staff and technology and the key opportunities and threats which may help or hinder their ability to achieve their business goals.
Compared to 2019, do you believe the trading environment in 2020 will be easier or more difficult for you?
| State of the trading environment | % of Brokers |
| Easier | 43% |
| More difficult | 13% |
| About the same | 44% |
Are you forecasting growth in your business in 2020? If so, by how much?
| 2020 business growth forecast | % of Brokers |
| Contraction | 7% |
| Up to 5% | 31% |
| 6-10% | 24% |
| 11-15% | 6% |
| 16-20% | 15% |
| Greater than 20% | 16% |
Investing in people
| What’s likely to happen to your headcount? | % of Brokers |
| Likely to increase staff numbers in 2020 | 43% |
| Likely to decrease staff numbers in 2020 | 5% |
| Staff numbers to remain broadly the same | 52% |
Investing in technology
| What’s likely to happen to your technology spending? | % of Brokers |
| Likely to increase spending on technology in 2020 | 39% |
| Likely to decrease spending on technology in 2020 | 5% |
| Spending on technology to remain broadly the same | 56% |
The survey then asked brokers to select the top three challenges and opportunities which they thought might influence them achieving their business goals in 2020. These were then ranked based on brokers’ selections.
Brokers’ key business challenges
| Position | Challenges |
| 1 | Lenders tightening lending criteria |
| 2 | Economic uncertainty |
| 3 | Time and resource to deal with regulatory matters |
| 4 | Competition from other brokers |
| 5 | New ‘direct’ products and offerings |
| 6 | A shortage of experienced and knowledgeable staff |
| 7 | A property market slow-down |
| 8 | Increasing business / staff costs |
Brokers’ key business opportunities
| Position | Opportunities |
| 1 | Increased Brexit certainty |
| 2 | Improving trading conditions |
| 3 | Increased choice of lenders/products/flexibility for non-standard customers |
| 4 | Increasing awareness of specialist finance and lenders amongst consumers |
| 5 | Technological advancements making transactions quicker/smoother |
| 6 | Greater BDM support from lenders |
| 7 | Decreasing competition from other brokers |
| 8 | Local opportunities (new employers / new housing / etc.) |
Harley Kagan, Group Managing Director of United Trust Bank, commented: “2020 has got off to a very busy start at UTB with record levels of new originations. Although it’s a little too early to tell if trading conditions are going to be better this year than in 2019, the activity we’re seeing would certainly suggest that confidence is returning. Finally leaving the EU and entering the transition period has provided some certainty, even it may not be the certainty everyone wanted.
“It’s very encouraging to see that many brokers are forecasting significant business growth this year and a commitment to investing in people and technology. That was very much UTB’s strategy in 2019 as we continued to recruit staff across the Bank and completed some significant IT and process projects which are already starting to deliver results and will support our long-term growth plans.
“It was interesting to note that Brokers’ felt one of the key challenges to them achieving their business ambitions would be lenders tightening their lending criteria. Whilst I can only speak for UTB, I can assure brokers that whilst we keep a constant watch on the market and economic landscape, we remain keen to lend. This includes proposals for properties and new developments falling within the Prime Central London market which appears to be benefitting from increased activity and rising confidence of late. In fact, we’ve completed several substantial loans on properties and developments in Central London in the last few months including multi-million-pound bridging and structured finance facilities. We have always treated proposals for projects in Central London as we do any other. If the proposals are sound, we will support them.”