Industry association's latest report on commercial finance

Industry association's latest report on commercial finance


“The darkest hour is just before dawn”, stated the Vice Chairman of an industry association as he outlined this year’s happenings in Commercial Finance to Bridging and Commercial.

Marcus Grimshaw is also the Director of Member Services at the NACFB and gave us an insight into how commercial finance has changed in 2011.


In last year’s report, we learnt how the many changes in the market were affecting us; the positives seemed to outweigh the negatives and we all hoped that these glimmers of light were not a false dawn.


It’s been another tough year – so far we are the survivors of quite simply the toughest years our industry and the economy generally have ever faced. This must not be underestimated, but we must not become complacent.


This recession has seen one of the longest downturns since records began and sadly it appears that this cycle is combining the worst of both worlds – deep fall followed by slow recovery.


Although certain company sizes, sectors and regions have seen improvements, overall insolvencies have increased slightly according to figures published by Equifax. Although the actual numbers involved are not as bad as they were in early 2009, clearly we still have some turbulent times ahead of us.


Project Merlin remains high on the association’s agenda. Mixed reports surround this controversial initiative, with some lenders suggesting demand from business owners is not as high as anticipated. We all know this is because deals that are declined at the first hurdle rather than at credit are not recorded; this underlines the importance of the NACFB annual survey. Armed with the facts we can influence and lobby.


Viewing the figures from the NACFB’s annual survey highlights that although the market is far from ideal, we are moving in the right direction. Overall business introduced by NACFB members has increased by 14 per cent from the previous year which is good news. There has been comment in the press on the recorded 180 per cent growth in short-term funding.


There have been a number of excellent additions to this part of the industry and good use of this type of lending is helping out SMEs across the UK.


Looking ahead, our role as advisers, as brokers, and as professionals, in this very exciting but demanding marketplace, is more important than ever. We must manage expectations, stay close to those clients that have sensible realistic funding propositions, and inform those that do not.


This is, for now, our new world. We clearly do not want to see this boom and bust scenario again, but we play a pivotal role here.


With some superb new lenders entering the market, innovative and entrepreneurial providers launching new and exciting propositions, and the old favourites opening up for business once again,  some much more proactively than others, this is indeed  a new dawn. But when we see this new world in all its bright and shining glory, of course we must not expect it to be as it once was.


This is for now the new normal.


This means we need to be more entrepreneurial and less blinkered. We may not be placing anywhere near the volumes of business we once were, but the revenue opportunities from the clients that need us now more than ever, are just as profitable. My work with the Member Services Proposition will bear this out.


Our journey is a continual one and we are likely to see many more twists and turns in the road. Sadly, many of our colleagues have fallen by the way-side and we may well see more go the same way. We must remain focused and accept change, whilst not changing what we believe.


It’s time to step up to the next level; we need to evolve. Our aim is clear – we must become the pivotal relationship in a client’s desire to obtain commercial, finance. We must strive to become the first port of call, the most highly qualified, professional network of brokers; we must influence and lead this sector through this new world.


As a great man once said: “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

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