I am writing this piece in between meeting brokers, valuers, solicitors and other lenders at the NACFB Commercial Finance Expo event and have to say that the interest in the Short Term Lending sector is very encouraging but why shouldn’t it be? This year this specialist market, according to some pundits, is anticipated to break the £4bn barrier.
Brokers who are thinking of sharing in the success and continued growth of the market regularly ask me “why has there been such growth over the last three years.” My response is; because together with fellow members of the three major trade bodies (ASTL, AOBP and NACFB) lenders have got their act together and brokers are reaping the benefits. The established lenders now have the confidence of their investor backers and their funding lines are far more robust, dependable and flexible because over the last three years those lenders have proven they have a prudent and ethical approach to their lending.
It came as no surprise to me that the majority of the winners at this year’s Bridging & Commercial industry awards were business partners with each other. Amicus, like the other lenders who won awards, had strong relationships with the winners in the broker (Adapt Finance, Finance 4 Business, Brightstar, Enness Private Clients and SPF Short Term Finance) valuer (Robert Sterling) and solicitor (Brightstone Law) categories.
It is the strength of these stakeholder relationships that is bringing benefits to brokers looking to develop their client proposition. Short term finance is not for everybody but because it no longer is seen as the funding of last resort, in the right circumstances for the right client the rewards for all parties are good and the growth is being fuelled by the repeat and referral business that is generated when client satisfaction is considered the benchmark of success.
Communication is at the core of the success of any business model and many lenders have improved their relationship with their stakeholder partners by breaking down the communication barriers that often existed. Brokers should now be encouraged by lenders like Amicus who allow open access for all parties and only appoint brokers, valuers and solicitors to their panels who buy in to a culture of proactive relationships that ensure completion is achieved to the client’s satisfaction .
Thanks to the efforts of many lenders in the last two years, many of those brokers at the NACFB Expo event are now far more knowledgeable about how lenders structure their pricing, work closely with their valuers and solicitors (In deed these relationships are a great deal stronger than they are in the traditional market) and recruit quality underwriters who are ethical in their attempts to find a solution to the brokers client short term needs which can be up to 24 months.
Lenders have a responsibility to improve their ‘education’ agenda and it is encouraging to see how the trade bodies representing the brokers in the sector (AOBP & NACFB) are now working more closely with the lenders, helping their members understand better how they can achieve annual income streams in excess of £100k. Brokers need to be willing to understand the intricacies of the sector. They must forge relationships with the growing number of lenders who are here to stay and who, like Amicus, have at the core of their proposition, the education of brokers who want to share in the significant growth potential of a sector that is forecast to grow by between 25-30% in 2015.
It is not unusual for brokers to achieve commission levels in excess of £100k when they have gained the experience that the sector demands for them to become specialists in what can be an intricate market.
I hope after reading this brokers will be encouraged to be proactive when it comes to the short term lending sector and seek out one of the increasing number of lenders with strong proven funding lines, who are working with their stakeholder partners to ensure the short term lending market has a long term future.
