"Do you keep in touch with your clients to better predict when they might need another loan? "
New lenders, new offerings, new legislation, Brexit and general macroeconomic developments... keeping on top of what’s happening in the SME finance market can feel like chasing your own tail.
To better understand where our industry is heading, we surveyed over 132 commercial finance intermediaries, including brokers, business advisers and accountants across the UK, earlier this year. By speaking to those who work directly with businesses to help them source funding, we gathered insights into the future of SME finance.
The £22 billion funding gap
Why is this important? According to recent figures from the Bank of England, there is a £22 billion funding gap in the SME loan market, with many businesses struggling to obtain capital to finance growth opportunities. The Bank also highlighted that those companies which get external support, i.e. working together with a broker or accountant, are 25% more likely to become a high-growth firm. That said, 81% don’t seek advice at all. There is clearly an immense potential for lenders to bridge this gap.
Intermediaries stay positive
So what is the financial intermediaries’ current sentiment? Overall, they are very positive. When asked whether they believe the number of loans they broker over the next twelve months will increase or decrease, almost three out of four respondents expect it to rise; 56% even think it will do so considerably.
Despite the optimistic outlook, the biggest challenge for almost half of the survey respondents was the number of documents required to process a loan application. Additional challenges mentioned by approximately four out of ten intermediaries are:
● Generating new business in an efficient way
● Understanding the offering and product range of the different lenders out there
● Brexit and the uncertainties – but also potential opportunities – around it
So how can intermediaries like you embrace new opportunities, remain positive and tackle future challenges?
Retain Is Gain
When speaking to our partners, I hear them talk a lot about new business development and lead generation. But a sometimes overlooked – and easier way – of getting in new deals is repeat business. Do you keep in touch with your clients to better predict when they might need another loan?
Finally, keep on top of what’s going on. Nobody likes that awkward feeling when your client knows more than you about the latest lender or technology in the market. Clients nowadays expect top notch quality from the intermediaries they work with. If you read relevant industry news, go to networking events, keep in touch with lenders and other contacts on LinkedIn you can make sure to always impress instead.