By Harley Kagan, Managing Director, United Trust Bank
Over the last few years, brokers have played an extremely important role in sourcing funding for businesses and individuals to enable them to achieve their goals or seize unexpected opportunities. On many occasions those same borrowers would have tried approaching a lender directly, often a High Street Bank, only to be turned away deflated and empty handed. Some probably gave up, convinced by the lender that theirs was a scheme best forgotten. Others, however, sought the services of a broker. By thinking beyond the high street, and sometimes out of the box as well, tens of thousands of deals, projects, investments and acquisitions were realised.
The role of a broker has changed considerably over the last 10 years and will no doubt continue to evolve as the economy improves. Before the credit crunch, one of the broker’s key tasks was paring down the healthy array of funding options and presenting their client with a simpler decision based on client’s requirements and their expert knowledge of the marketplace. Then, when funders dwindled, the broker’s challenge was to find a lender which would even consider the proposal at all. Now, with many new and niche lenders having stepped in to fill the credit void and with a hint that some major lenders may be relaxing their criteria, it’s up to the broker once again to ensure the lender is a good fit for their client. For those trickier cases, it’s frequently an in depth knowledge of what lenders will consider, coupled with a good lender relationship which will get a less than straightforward deal over the line.
As a lender we understand how much value an experienced and knowledgeable broker can add to a deal. Rather than acting as a barrier between the lender and the borrower, a good broker can help to encourage open and honest communication early on and enable important information to be obtained swiftly. Closer ties may also be important further down the line, especially if problems are encountered. Brokers can also provide essential counsel to their clients if the lender’s due diligence unearths new information which might require an adjustment to the terms of the loan. A good relationship between lender, broker and borrower is a great help during any renegotiation.
At United Trust Bank the vast majority of our business is introduced to us by brokers. In fact, our Asset Finance division will only consider proposals brought to them by an approved introducer. As a patron of NACFB we support wholeheartedly the work that Adam Tyler and the team are doing to promote the image of the industry and to encourage the continued professionalism of its members through education and development. We also strive to achieve a deeper understanding of the challenges faced by brokers and their view of the world. As well as frequent conversations and meetings, our regular broker surveys give us a different perspective on the market. Feedback given through the surveys, at round table events and via direct contact with the BDMs helps us to develop our products and propositions so that brokers can have more and better options when advising their clients. This was demonstrated recently when we announced our new, lower rates for short term bridging loans which we suggested would give brokers even more opportunities to consider bridging for a wider range of applications. This move was widely welcomed by the broker community.
We also enjoy rewarding the brokers who have supported us both through their business and by sharing their insight and opinions. Throughout the year, brokers have won ipads and other gadgets just for completing our 5 minute broker surveys and very recently Peter Clinton from Ennes Private Clients won a fabulous transatlantic trip for two people complete with an exclusive helicopter tour of Manhattan, by taking part in our year-long New York promotion. We wish Peter a very enjoyable trip.
As the economy improves we hope that more businesses, developers and individuals will have the confidence to seek out new opportunities and to perhaps commence the plans they’d previously set aside for brighter days. Some will undoubtedly find it difficult to fund their ambitions, as we expect the High Street Banks’ lending to remain somewhat hesitant. Brokers will continue to play a vital role helping clients find the right solutions for their needs and we will do our best to support them. United Trust Bank will continue to strengthen its broker relationships and by forging even closer ties, we aim to ensure that 2014 is a successful year for brokers, for their clients and for the Bank.