There is still a £1.2bn funding gap in a sector where I was expecting strong growth. It’s been one of the biggest stories of the last six months.
I’ve just come back from our Asset Finance Seminar, which grew livelier and livelier as the day went on. A lot of typically forthright panelists, some high-calibre special guests like Shadow Business Minister Lord Mitchell and Julian Rose of the FLA, and more than one hundred commercial finance brokers, all combined to give us a very interesting event.
It appears that the overall “flavour” of the asset finance market is changing. If the removal of one large funder leaves room for lots of smaller funders to expand into, the result is more choice and increased competition. Increased competition inspires development and innovation. Richard Briscoe at Close Business Finance mentioned that lenders are lending “more aggressively”.
Meanwhile, Lord MItchell talked in forthright terms about the poor health of the banking model, just one day before RBS’s £5.2bn losses hit the headlines. Banks, he said, must innovate or become unviable.
Still, from what I see, the banks are lending. But the money isn’t being spread around enough. They are favouring those businesses who fulfil the most rigorous criteria, splitting the market in two – the haves and the have-nots. Of course, I want every qualified commercial finance broker to be a “have”.
Small business owners are not taking advantage of the opportunities offered by the wealth of smaller lenders. If the first step a business owner takes is to solicit the services of a commercial broker, they’ll benefit from that aggressive, competitive lending that’s on offer right now.
