Consistent Credit Policy

Nearly a third of commercial finance brokers say they frequently encounter difficulties in securing funding for their clients due to changes in funder policies, latest survey data from Asset Advantage can reveal.

While just over 27% of brokers say they encounter challenges frequently or very frequently, more than half (56.8%) face difficulties on occasion. The biggest challenge among the respondents was stricter underwriting processes (33.6%), while fluctuating interest rates and industry restrictions were both highlighted by nearly 20% of brokers.

Other challenges encountered by brokers include changes in the terms offered by funders, limited funding options and asset restrictions.

One respondent said to Asset Advantage: “It does appear to be becoming more frequent where there are more challenges being faced with a lenders’ underwriting, where it has become more stringent rather than taking a more commercial view of the overall deal. Some of these problems are being faced on just standard flow deals as opposed to more complex transactions. It does sometimes make you question whether the lender wants to write any business.”

Another said: “Following the Liz Truss premiership, it made the market even tougher with rates bouncing all over and lenders anticipating recession and difficult trading. Hardening of appetite was frequent and deals that had previously been done by a lender were now getting declined and this was acknowledged by different lenders. On top of this clients expectations lagged behind where the market was in terms of rate, deal structure and security.”

The findings are revealed in the latest survey from Asset Advantage, one of the UK’s leading independent providers of business finance for SMEs. The survey gathers input from commercial brokers on a variety of topics to determine the current state and evolving demands of the commercial finance market. The survey aims to identify the key challenges facing brokers, along with their views on lender appetite and the overall lending landscape.

Philip Knight, Credit and Risk Director at Asset Advantage, said: “Our survey confirms that many brokers continue to face real hurdles as they navigate the market and the changing appetite and policies of funders. This restrictive and changeable approach not only makes it much harder for brokers to get deals over the line, but blocks good quality deals that perhaps just need an extra eye or that fall out of the typical scope of a mainstream lender.”

“We work super hard to maintain a consistent approach to our underwriting and present commercially viable conditions of sanction to our introducers. Whilst acknowledging that customers are often rate sensitive we like to think that our ability to simply get to deals with where necessary, credible security packages, makes us an attractive lender on any broker’s panel.”

Asset Advantage has been providing business finance for more than 17 years, offering hire purchase, leasing and business loans of up to £1 million. It is asset and industry sector agnostic, specialising in deals that need an experienced, professional and above all common-sense approach to underwriting.

For more information, please contact us, or please call 01256 316 200.