Finding the right funder
Keith Sangwin – Asset Finance Sales Manager – United Trust Bank
Since joining United Trust Bank earlier this year, I’ve spent a lot of time on the road meeting brokers. It’s a part of the job I really enjoy and it gives me the opportunity to frequently remind myself of what brokers look for from an asset finance funder. When I meet a new broker I’m always keen to understand what makes them tick, especially when they’re placing a deal.
Generally speaking, most brokers take a similar approach. They start by assessing the strength of the customer, the quality and type of asset, the supplier and the overall deal profile. This gives them enough information to compile a shortlist of suitable lenders.
For example, UTB do a lot of refinance business; many funders don’t like refinancing. Some funders may put an age limit on how old an asset can be within the term of the finance agreement; we don’t have an age restrictive policy. If it’s a particularly unusual case, where some flexible underwriting may be required, the broker may benefit from talking to a Credit Manager. Whilst that would be fine by us, some other lenders like to keep the credit team behind closed doors. Actually, the benefits of engaging with the credit managers at an early stage are two-fold. It can save the broker a lot of time if the deal just isn’t right for us but more importantly it gives the credit managers an opportunity to flex their creative muscles on marginal cases.
Once brokers have put together a shortlist of likely funders, they look at the factors important to the customer. These will include pricing and additional fees, speed of decision and speed of pay-out. It’s not unusual to be approached to provide money within 24 hours of being contacted and, with a motivated funder, this is possible. These service related factors mean that the broker will not always choose the funder with the cheapest rate or the highest commission.
Finally, the broker will then look at the commission/payment arrangements and their relationship with the remaining funders on the shortlist. One consideration will be whether the funder is going to help them grow their business in the future, or be more likely to want to take it away. Tales of funders’ direct sales teams approaching customers without the knowledge of the introducing broker have been quite commonplace so working with a broker-only funder does remove any risk that you may be handing a hard won customer over to your future competition.
Funders cannot be all things to all brokers. After all, it’s their specialist knowledge and expertise which adds value, not being a jack of all trades. But some sought after qualities are universal. Experience, straight-talking, speed and flexibility are the cornerstones of a good funder. Add trust and a commitment to building a mutually beneficial partnership, and your choice of funder should become an easier one.