New research carried out by lender United Trust Bank has found that in 2012 most asset finance brokers predominantly dealt with transactions of up to £100k. However, UTB themselves have noticed an increase in the number of finance proposals for deal sizes in the £250-750k sector.
Nearly two thirds (58%) of brokers who responded to the survey indicated that in 2012 their core business was arranging finance facilities of up to £100k whilst less than 1 in 5 (18%) brokers routinely dealt with advances of £250k and above.
UTB also asked what types of wheeled and tracked assets brokers dealt with most frequently in 2012 and found that commercial vehicles were nearly a third (29%) of broker’s business in that sector. Construction equipment was the second most popular wheeled and tracked asset class, most often dealt with by 15 per cent of brokers. Agricultural equipment and bus and coach accounted for the majority of business for 9 per cent of brokers in each case whilst car related finance was key for 12 per cent of brokers.
When asked where brokers were finding new clients the most common response (35%) was that they were most often referred to them by existing customers. Referrals from other associated professionals such as accountants and solicitors was the next most common means of brokers finding new clients (32%) whilst just 15 per cent of brokers said that most of their new business came via their company website.
Martin Nixon, Head of Asset Finance at United Trust Bank said;
“Our broker research reveals that most brokers continue to deal with sub £100k loans for the majority of their clients and this is certainly supported by our own experience as a lender last year. However, towards the latter part of 2012 we provided considerably larger facilities to some clients and there was a gradual increase in enquiries for larger asset finance facilities which has continued into 2013.
“It’s interesting to see that the commercial vehicle and construction sector remains the core business for most brokers. Any potential upturn in the construction industry this year, and there are mixed messages in this regard, would be very welcome to our broker partners. We continue to see a strong demand for refinance in these two business areas, as well as within the agricultural sector, as traditional bank funding remains elusive for all but a select few. We’ve certainly transacted plenty of business where the purpose of the loan was not connected to the actual asset the finance was secured against, from funding new buildings, assisting with working capital, or even buying a herd of cows!
“Clearly there’s still very little which can beat a personal recommendation from an existing customer or professional business associate. Together the two account for generating the majority of new business for over two thirds of brokers. So whilst it’s important to have a good online presence and website there’s still a lot to be said for cultivating good business relationships and making sure your customer goes away feeling completely satisfied with the service you’ve provided.”