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Listicle: Top five broker
Top five broker survey takeaways
The annual NACFB broker survey, undertaken towards the end of last year, sought to gauge how SMEs in need of finance interacted with intermediaries and shed light on the activities of the Association’s membership. The headline finding revealed that Members helped to originate astaggering £40.9 billion of funding in 2021. But there were also other areas of growth. Here are five more findings from the survey which demonstrate the strength of the intermediary-led sector.
1. On average Members had 420 active clients
We defined client as a firm or individual for whom a Member has sourced finance over the last five years. As you might expect, the result is influenced by the Member’s primary business activity. Those operating primarily in the leasing and asset space, which typically sees lower ticket deals but higher volumes, had on average 773 clients. Whereas Members whose primary offering is high ticket development finance had on average 191 active clients. The survey data revealed that in total, the NACFB membership welcomed 146,885 new clients to their roster last year. In all, 21% of the membership had fewer clients in 2021 than in 2020, whilst 56% saw their active client base grow.
This represents a 17% increase on 2020’s figure (£391,345) and is up 29% on 2019 (£355,221). The finance sector with the biggest year-on-year average increase was factoring and invoice finance where Members averaged £695,833 in 2021 compared to the year before (£477,778) representing a 46% rise. In 2019, the year before coronavirus took hold, the average transaction was valued at £371,667 suggesting, perhaps, that the pandemic created a greater need by SMEs for factoring and invoice finance.
At the other end of the scale, the average transaction size of a leasing and asset finance deal fell back to £79,811 last year, down 39% on 2020 (£130,434) and more akin to 2019 deal sizes The full results of the 2021 NACFB broker survey can be found in the January 2022 issue of Commercial Broker magazine.
(£21,091). Overall, 45% of Members said their average size transactions were at the same level as 2020, whereas 41% said that for them their average size of transaction had increased.
3. Members averaged 117 lenders on their panel
The number of lenders Members have on their panel continued to grow steadily, up from 106 in 2020, and 101 in 2019. In all, 57% of the NACFB membership said they had more lenders on their panel in 2021 than in 2020, just 10% said their panel had shrunk. The increase is likely attributed to the growing number of bridging and fintech lenders in the market. Whether or not Members actually used all of the panel is not known. We suspect that many Members may have a core of go-to providers they call upon and we’ll seek to find out more in the next survey.
In place of BBLS, CBILS, and CLBILS, 2021 heralded the arrival of the Recovery Loan Scheme (RLS), the state backed COVID loan scheme facilitated by the British Business Bank. The average size RLS facility via an NACFB Member stood at £539,281 – over twice the size of the average sized CBILS loan in 2020 suggesting that when businesses needed state-backed funding in 2021, their need was comparatively greater than in the year before.
5. Members averaged 11 RLS deals each
Engagement with the RLS was lower than many expected. Of the NACFB Members that used the scheme, on average only 11 deals per brokerage were placed through it. Half (49%) of Members said the main reason for reduced scheme activity was a lack of direct RLS enquiries, whilst 16% said their clients simply did not meet the scheme’s criteria.
