According to the recent broker survey, carried out by United Trust Bank, over 1 in 5 (22%) brokers operating in the asset finance sector believe that they have lost between £15,000 and £20,000 in revenue to direct funders in the last year. A further 30% estimate that they’ve lost £5,000 to £10,000 in revenue and 11% believe the figure to be between £10,000 and £15,000.
Martin Nixon, Head of Asset Finance at United Trust Bank, commented:
“The asset finance sector is becoming increasingly competitive with lenders’ direct sales teams now more prominent in the marketplace, and new entrants offering a range of delivery channels. Direct funders in particular are increasingly moving into the small to medium ticket sectors, which has been the traditional home for the majority of brokers over the last few years. It is not uncommon now to see prime rates being offered to less than prime borrowers as credit appetite becomes rather more aggressive and rapid growth becomes the priority for many funders. Brokers are subsequently finding it difficult to compete when their customers are approached directly by a funder who will try to price a broker out of a prospective deal.
“This research shows how much this trend is hitting broker incomes. £10,000 to £20,000 of revenue lost can be a big problem for a small brokerage and the long term impact on brokers’ businesses can be lasting as well. Customers lost to direct funders can sometimes be very hard to win back.
“United Trust Bank is committed to having a ‘broker only’ delivery channel for asset finance. When brokers deal with us they work with a partner with a real understanding of the market, quick and flexible finance solutions and an unparalleled service from a lender looking to build long term, mutually beneficial relationships.”
