"As businesses and lenders alike grapple with the effects of and prepare for increasing restrictions, there are going to be complex business stories that need telling."
As SMEs make up a huge part of the UK economy, they have, of course, been hit hard. While CIBILs and Bounce Back loans have helped business across the country, they are becoming increasingly difficult to get, with some institutions not offering them, and those that do are reluctant to offer them to new customers. As we stand these schemes will both come to an end as at 31 January 2021 placing greater strain on UK businesses.
More than ever, the role of a broker as a go-between is vital. Brokers have a better understanding of the impact Covid-19 has had on their client’s finances and motivations. Building on their relationships with lenders, brokers can convey business-specific circumstances to inform decisions and are best placed to judge if a business is fundamentally strong, and fit for a loan, or whether the business should refocus on alternate plans.
As businesses and lenders alike grapple with the effects of and prepare for increasing restrictions, there are going to be complex business stories that need telling. It’s time to go beyond applying solely over online portals and communicating by email. Video conferences have made 'face to face' meetings easier than ever, which are vital in ensuring the best decisions are made, on the sides of both borrowers and business. As restrictions are relaxed in time, I can see a noted increase in broker/borrower meetings compared to pre-pandemic levels, it's hard to overstate the importance of these relationships in what will continue to be uncertain times.
In addition to the vital relationship side of lending, brokers will also play an increasingly prominent role in tailoring loans for businesses to get the best deal for both parties. Brokers will need to call on the skills of the time-served qualified lending managers, gaining advice, and not being afraid to ask for help when structuring deals. This is a new situation to us all, asking for help isn't a sign of incompetence, but an indication of the will to get deals done. It will also be increasingly important to face the challenges head on, rather than just walking away and trying elsewhere. Through doing this, lenders will be able to increase their likelihood of providing a bespoke loan that businesses will have a better chance of repaying, rather than shoehorning the borrower into an unsuitable product.
Of course, as there always are, there will be cases in which lenders and borrowers can't agree on terms, the importance of honesty between lenders and brokers is more vital than ever. With honest feedback and advice, brokers can maintain relationships with their clients, the borrowers, and help them to find the correct alternative solutions.
The economic outlook is far from peachy, but with skilled brokers who understand and are prepared to work with lenders and borrowers, loans can be delivered, businesses sustained, and even grow. An understanding between all parties is vital to the future prosperity of us all.
