27% of asset finance brokers say they are experiencing most competition from their customers’ own banks, new research has found.
United Trust Bank’s most recent Broker Sentiment Poll asked brokers operating in the asset finance sector from which channel they were experiencing the most competition for business. ‘Customer’s own banks’ was the most frequent answer followed by ‘direct approaches from funder’s sales teams and vendor sales teams’ (24%) and then ‘other brokers’ and ‘customer’s self-sourcing funding’ were joint third at 20% each. The remaining 9% felt they had little competition or didn’t know where their competition was coming from.
The most recent figures from the Finance and Leasing Association (FLA) suggest that broker introduced business is the fastest growing sales channel. In the 12 months to April the amount of new business introduced by brokers had increased by 10%. There was a 6% increase in sales finance and a 2% increase in direct funder business.
From which channels are you experiencing most competition for business?
|Position||Source of competition||%|
|1||Customer’s own banks||27%|
|2||Direct approaches from funder and vendor sales teams||24%|
|=3||Customers self-sourcing funding||20%|
|5||Little competition or don’t know||9%|
Brokers were also asked to indicate what they believed would happen to the number of asset finance funders in the marketplace over the next three years. A majority of brokers felt that the number of asset finance funders would most likely stay the same or increase.
|Position||Chaneges to the market over the next three years||%|
|1||The number of funders will stay broadly the same||44%|
|2||The number of funders will increase||33%|
|3||The number of funders will decrease||24%|
Keith Sangwin, Asset Finance Head of Sales at United Trust Bank, commented:
“According to the FLA, new asset finance business increased by 3% in the 12 months to April and it’s encouraging to see that brokers are not only holding their own against other sales channels but increasing their share of the market. As UTB is a ‘broker only’ funder we’re delighted to be playing our part in supporting brokers in the face of fierce competition from SME’s own business banks as well as direct funder and vendor sales forces.
“At UTB we do all we can to ensure the service we provide helps brokers to retain existing customers and attract new ones. That can also mean going off rate card for the right deals with strong credits and having a willingness to match the price and commission on offer from other funders.
“We have recently reduced the minimum deal size we’ll consider price matching on from £35,000 down to £10,000. We know there is quality business being transacted in these smaller deals and they can often lead to bigger transactions once a broker has gained the trust and approval of the customer. On some occasions we can put together a bespoke price and commission package still backed by the same outstanding UTB service to help brokers win the business.”