Promises to brokers are over, it's all about delivery, says Nick Baker




In an exclusive filmed interview with B&C, Nick Baker, head of intermediaries at Allica Bank (featured in the video above) stated that “delivery will be remembered” by brokers during these times, not promises.

In November, Allica announced that it had ramped up its operational capacity to be able to support £100m in lending in Q1 2021.

The decision was made following an uptick in demand for SME finance which, since June, has caused a 235% surge in commercial mortgage applications to the bank. 

Allica now has 138 employees, 83 of whom joined the bank since the start of the first lockdown in March. 

It has brought in new talent across all divisions, including increasing its customer service team by 25% and quadrupling its lending support staff.

“In terms of our broker-facing team, we’re currently eight in the field, and I expect that to double over the coming months in order to support the brokers we’re seeing,” Nick said. 

B&C asked how Allica had been able to fill this gap in the commercial market.

Nick explained that the bank’s proposition is to tackle brokers’ key pain points, especially in the SME mortgage, commercial owner-occupied and commercial investment markets.

Clear products, criteria, and application journeys; consistent underwriting and decision making; and collaboration and support were noted as the pivotal three elements. 

“For me, it’s been a real focus on delivery,” Nick said.  

“Promises over what you can do for a broker partner are gone — it’s all delivery, and it’s the delivery that will be remembered.” 

B&C probed Nick on what advice he would give to brokers that have clients in need of commercial mortgages, to ensure speedy transactions.  

“For a broker, knowledge is power,” he responded, “and that means knowing your borrower inside out.”

As a result, he emphasised the need for “storytelling”. 

“We often get really good numbers about a transaction but, at the moment, it’s words that really matter,” he said, noting that both are equally important. 

He also commented that the evolving market may need new relationships, which might be with lenders that brokers previously didn’t know or consider. 

“I think there’s going to be [a] refreshing of relationships, and the building of new [ones], and those will help drive us [forward] to support these borrowers to get what they need.”

Considering how significantly these businesses have been impacted during the pandemic, B&C asked Nick how Allica was able to lend in the hospitality market and mitigate the challenges. 

“We know hospitality has been one of the hardest hit sectors . . . [and] because [of this], it’s meant that all hospitality businesses have been labelled as ultra-high risk, so many lenders won’t lend to them,” he said.

“For me, and for the bank, it’s just not as simple as that.”

He divulged that every management team needed to be assessed individually, as they each possess their own talents and experiences.

“For me, it’s about lenders needing to be able to make common-sense decisions — and they need to be tailored for each business, not the sector.”

When questioned on what his 2021 outlook is for the overall commercial finance market, Nick pointed out that a few new lenders entering the market does not solve the challenge SMEs face.

“The market dislocation that has caused SMEs to be underserved has been accelerated by Covid,” he said.

“As we work our way out of government support schemes — which have played a vital role in the market — that dislocation is going to get more acute.”

In a survey Allica conducted in August and September, 99% of brokers reported declining lender appetite as the largest hindrance to their business and customers over the next two years.

“Lenders need to be clear with their broker partners, SMEs, and borrowers [on] what it is they can do, and what sits outside of [their] appetite.”

He believes that the big question mark going into next year will be around liquidity and who has got the firepower and operational capability to support brokers and customers “at scale”.

“I think we should expect that funder confidence has been dented and that, coming out of this, they are likely to put a toe back into the market, rather than go straight back in at previous levels.”

The entire interview can be watched, below.

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