NACFB article: A collaboration that stands the test of time

We were recently profiled in the NACFB Magazine. Read the full article below where Ian Aitchison, Managing Director, gives us his take on the broker market: 

Ian Aitchison

We’re very proud of our history, because for over three decades – since 1987 – we’ve been working in close partnership with reputable business finance brokers to provide tailor-made finance solutions to UK SMEs across a wide variety of industry sectors, including agriculture, engineering and manufacturing.

There’s little we haven’t seen in this time. Economic cycles have come and gone as have a succession of governments and even Brexit hasn’t knocked us off our stride; we will keep providing finance regardless of the political or economic situation the UK finds itself in.

Our team are experts in the asset finance industry and have a real understanding of key industry sectors along with the knowledge and insight needed to fulfil even the most complex finance requirements.

We base our lending decisions on the overall health and plans of the business – not just a credit rating. We’re careful lenders too; a decision that fails to take account of risk factors and wider market forces is not in anyone’s interest.

We offer a range of finance products that you are no doubt already very familiar with, including Refinance, Sale and HP back and Regulated Hire Purchase.

Our view of the broker market

We recently asked finance brokers across the UK about, among others issues, their trading conditions, the challenges they face and their ability to adapt.

On the whole, brokers were optimistic about the rest of 2019, with 68% feeling confident about the UK's economic outlook for the next 12 months. There was, however, a significant minority (32%) of brokers who were not so positive about the prospects for the UK’s economic performance. That being said, the broker market has proved itself to be resilient throughout all economic cycles, with brokers well positioned to ride through any economic turbulence.

We recognise that resilience is hard fought, born of years of experience in the market, with many brokers having decades worth of knowledge to call on. This is strongly reflected in our findings that three in every four brokers currently believe that UK SMEs are quicker to adapt to change than larger businesses.

Brokers are well positioned to draw on their experience to enable SMEs with their expansion ambitions. Our research shows that for 38% of UK SMEs, growth is their main business priority followed by business consolidation, debt reduction, and developing products and services.

Sentiment on both growth and investment among brokers is very strong. 64% are of the view that their brokerages will either grow significantly or moderately, whilst 52% will be looking to invest to enable that growth, precisely mirroring the sentiments of UK SMEs.

Brokers are outperforming the general SME market in terms of their positivity and match UK SMEs’ appetite for investment. Among UK SMEs, 35% anticipate expansion while 57% expect to tread water and stay the same, against only 32% of brokers. Given the crucial role brokers play in the funding mix, this strong need to access funding by SMEs – as shown by the results – confirms our belief that there remains positive opportunities for brokers.

How we work with brokers

At Close Brothers we strive to work in partnership with our brokers at every stage of the process, from receiving the proposal to paying out the deal. With this in mind, we have compiled a detailed process, available on our website, that contains guidelines for the information required when proposing a deal. This ensures we can get an answer for you and your client as quickly as possible. The guide covers the following key areas:

  • Proposals – minimum requirements
  • What we think a weak proposal looks like
  • What we think a strong proposal looks like
  • Levels of financial analysis on larger lends
  • Financial indicators we will consider
  • What we do differently

Not only do we have a national team of broker development managers who work closely with a growing network of business finance brokers, we have our broker sales support and development team to deal quickly with any day-to-day enquiries our partners may have.

Brokers also have direct contact with our underwriters, who are efficient at writing agreements for a full range of hard assets and business critical soft assets, which helps ensure the decision-making process is swift and efficient. They are always happy to discuss potential deals on the phone, or to accompany brokers to meet prospective leads.