NACFB - Commercial Broker magazine - Q1 2025

Breaking ground

Charting the broker-led SME lending landscape in 2024

In this issue

4 Note from Jim Higginbotham

6 Updates from the Association

8 Note from headline sponsor: NatWest

10 Industry news round-up

Patron profile

12 Handelsbanken for Intermediaries: Relationship advice

Compliance update

14 NACFB: Decoding business exemption

Ask the expert

16 Prof. Trevor Williams: Navigating economic shifts

Special features

18 Market Financial Solutions: Ready and willing

21 NACFB: Breaking new ground

50 multifi: Beyond bricks and mortar

52 The big interview: NETSOL’s Jason Hurwitz

56 365 Finance: Empowerment not replacement

58 Momenta Finance: The human touch

Industry insights

60 InterBay: Increasing energy efficiency

62 Cumberland Building Society: Always accommodating

64 Let’s Do Business Finance: First finance

66 Purbeck Insurance Services: State of play

Opinion & commentary

68 Hilton-Baird Financial Solutions: Fuelling financial resilience

70 Allica Bank: Uncertainty, opportunity and unity

72 Somo: Out of the shadows

74 Arbuthnot Latham: A good exit

76 Cynergy Bank: Finding your niche

78 Triodos Bank UK: Taking care

80 The big five: Key developments to watch in 2025

82 Five minutes with: Shawbrook Bank’s Edward Rixon

and having

Kieran Jones Editor & Feature Writer Kieran.Jones@nacfb.org.uk

Jenny Barrett Communications Consultant Jenny.Barrett@nacfb.org.uk

Laura Mills

Communications Manager Laura.Mills@nacfb.org.uk

Sophie Olejnik

Digital Marketing Executive Sophie.Olejnik@nacfb.org.uk

Amber Jane Roye

Graphic Designer Amber-Jane.Roye@nacfb.org.uk

Magazine Advertising 0207 101 0359 magazine@nacfb.org.uk

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Jim Higginbotham Chief Executive Officer

NACFB

Hello

It’s a privilege to introduce this new-look issue of Commercial Broker – my very first as CEO of the NACFB. This magazine has long been a vital touchpoint for our community, offering insights, analysis, and a platform to elevate the voices shaping our sector. As we move forward, I want this publication to be more than just a reflection of where we are –it should also be a guide to where we’re heading.

This Q1 issue features our latest NACFB impact report and underscores the sheer scale and influence of brokers in today’s market. With 70% of broker-led SME lending facilitated by NACFB Members and lenders attributing two-thirds of their SME portfolios to intermediaries, the data is clear: brokers aren’t just participants in commercial finance; they are its driving force. But as this industry evolves, so must we.

The NACFB’s mission is to support, empower, and protect our Members, ensuring they have the tools, insights, and advocacy needed to thrive. We know the landscape is shifting – technology, regulation, and changing client expectations are reshaping how brokers operate. That’s why we’re not just talking about adaptation; we’re demonstrating it. Through enhanced compliance guidance, stronger lender-broker partnerships, and better use of data and digital solutions, we are more actively shaping the future of our sector.

We are committed to showing, not just telling – ensuring our actions reflect our ambition, our advocacy delivers tangible change, and our Members have the resources, connections, and support to drive progress. But we can’t do it alone. I encourage all of you to embrace our community, make the most of what we offer, and let us know how we can continue to improve. Whether it’s in person at an upcoming event or via email and phone, my team and I are always keen to hear how we can better support you and your firm.

Together, we can shape a stronger, more connected future for broker-led commercial finance.

NACFB Members fuel 70% of UK’s £38bn broker-led SME lending

Findings from the latest survey published in this

The NACFB has released findings from its annual impact report, reinforcing the pivotal role of brokers in SME finance. The report reveals that NACFB Members facilitated £26.5 billion – nearly three-quarters of the UK’s £38 billion broker-led SME lending market – with lenders attributing 67% of their SME portfolios to intermediaries.

“The future belongs to relationship-led lending,” said Jim Higginbotham, CEO of the NACFB. “Brokers should not just be seen as intermediaries – they’re growth partners. Their ability to match SMEs with the right solutions is why two-thirds of lender portfolios flow through brokers.”

The data underscores brokers’ role in diversifying SME funding, with 33% of

deals secured via specialist lenders and 28% via challenger banks. Meanwhile, 20% of SMEs obtained funding through NACFB brokers after being rejected elsewhere.

Regional trends indicate a redistribution of capital, with broker-led lending declining in London (-7%) and the South East (-6%), while the West Midlands (+4%) and South West (+1%) saw gains.

Brokers are also adapting to shifting market needs, with 25% of SMEs receiving a different financial product than initially requested and 33% of brokers expanding their services last year.

“Brokers prove that relationships matter,” added Higginbotham. “They’re redefining

Key dates for 2025

the role of the trusted advisor, blending human insight with market expertise to help drive UK plc forward.”

Lenders continue to invest in broker channels, with 83% expanding their broker panels in 2024 and 67% increasing their broker-facing teams. Over a third (36%) of lenders also broadened their product offerings in response to broker demand.

“Commercial finance brokers are the connective tissue of the UK economy,” said Adrian Coles, NACFB interim Chair. “We don’t just facilitate transactions; we build relationships that turn ‘no’ into ‘yes’ for UK SMEs.”

Turn to p.21 to read the full report.

NACFB Expo sees record registration rate

Arecord-breaking number of delegates have signed up to the new-look NACFB Commercial Finance Expo in the first month since registration opened.

More than 600 delegates have secured their place at the UK’s largest trade show for commercial finance professionals, which returns to Birmingham’s NEC on Wednesday 11th June with a bold new metropolis theme.

Celebrating 15 years of driving broker-led SME lending, the free event is reimagined as a dynamic cityscape,

reflecting the strength and diversity of the trade body’s community. Attendees can expect an immersive experience that fosters connection, innovation, and growth, bringing together more than 150 exhibitors and 2,000 delegates from across the small business lending spectrum.

Commenting on what will be his first NACFB Expo as CEO, Jim Higginbotham, said: “The NACFB Expo isn’t just an event – it is the physical manifestation of our community. As CEO, I’m proud to unveil a metropolis that mirrors our collective ambition.”

The Association’s flagship event will also host a conference theatre welcoming expert industry leaders, alongside dedicated networking spaces and an exclusive area for NACFB Members. Register for free via: commercialfinanceexpo.co.uk

Dave Furnival Head of Broker NatWest

AA look ahead Traversing 2025 with cautious optimism

s we continue to embark enthusiastically on 2025, I’m reminded of a quote by the great Spike Milligan: “All I ask is the chance to prove that money can’t make me happy.”

However enthusiastic we are, making money in the current business landscape feels more complex than ever, with a sluggish economy, continuing geopolitical tensions, and regulatory shifts creating a host of challenges for organisations of all sizes.

One of the most pressing concerns for businesses is the trajectory of interest rates. While many had hoped for deep rate cuts last year, instead we got a gradual succession of nicks from the Bank of England – and the forecast for 2025 suggests more of the same.

In our recent Year Ahead report, NatWest economists signalled that they expect rates to hit 4% in May of this year. That’s a long way down from the 11%+ highs we were seeing in 2022, but it’s still high enough for many businesses to think twice.

For brokers, the potential impact of the recent Court of Appeal ruling on the disclosure of commissions in the sector will be a concern and could affect customer behaviour. However, the acceptance by the Supreme Court to hear the relevant cases may bring some clarity later in the year.

At a sector level, 2025 will no doubt see some industries

poised to thrive while others grapple with further challenges. Although the services sector generally is expected to see some improvement, according to British Chambers of Commerce forecasts, the picture is less optimistic for businesses heavily impacted by inflation and rising costs.

It’s worth remembering, however, that most SMEs – the lifeblood of our economy – adapt quickly and efficiently to the economic conditions they face, and this resilience provides fertile ground for those of us in the business of supporting them.

As we embrace 2025, we must continue to ask the right questions; How will SMEs respond to the ongoing interest rate environment? What opportunities exist in underperforming sectors? How can we leverage technology without losing the personal touch that defines our industry?

At NatWest, we’ve developed a range of financing options aimed at supporting all types of SMEs, like our IP Loans which help businesses that are stronger in ideas than assets, and our market-leading Accelerator Programme which fast-tracks early business growth.

For brokers, our dedicated Broker Direct service reduces the time taken from a deal being presented to a credit-backed decision by 35%. Also, we recently raised the upper limit to £750,000, so we can now help even more businesses get the loans they need more quickly. If you’d like to learn more about Broker Direct, contact us at brokerteam@natwest.com

Ultimately, the tone for 2025 should be one of cautious optimism. While challenges are present in the coming months, there’s a wealth of opportunity for businesses ready to adapt and innovate.

Drive The Dream

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Industry news

FCA seeks evidence of Consumer Duty compliance

The Financial Conduct Authority (FCA) is writing to firms, including broker Members of the NACFB, seeking evidence of compliance with Consumer Duty expectations. The NACFB is actively supporting firms in responding to this request. The FCA’s letters focus on understanding firms’ business models, pricing structures, and fair value assessments for any products they distribute directly. The regulator is also requesting details on customer complaints processes, commercial lender relationships, and lead generation practices.

Budget is driving up prices, retailers warn

Analysis shows that retailers, suppliers and manufacturers are raising their prices due to measures set out in October’s Budget, including hikes to taxes and the minimum wage. Employers currently start paying National Insurance Contributions when an employee earns more than £9,100 per year but this threshold will fall to £5,000 in April. The rate of NIC paid by employers will also increase, climbing from 13.8% to 15%. A recent survey by manufacturing lobby group Make UK shows that 69% of companies expect to pass cost increases on to customers.

British Business Bank to focus on high-growth sectors

The British Business Bank will focus on small firms operating in high-growth sectors. According to the Financial Times, ministers have told officials to target sectors identified in Invest 2035, the Government’s new industrial strategy due to be published this spring. The sectors include clean energy, defence, creative industries, digital and technologies, life sciences and advanced manufacturing.

FLA: Asset finance new business up record 3% in 2024

Figures released by the Finance & Leasing Association (FLA) show that total asset finance new business rose by 3% to a record £39.7 billion in 2024. Of this, broker-introduced finance was up by 4% to £8.56 billion. By asset, commercial vehicle finance recorded the strongest growth of 10%. In contrast, new car finance reported a significant slowdown in growth and the machinery and equipment finance sectors remained subdued. Lending to SMEs grew by 1% to £23.5 billion.

PSR could be merged into FCA

Ministers are reportedly considering whether to scrap the Payment Systems Regulator (PSR), with officials potentially looking to merge it into the Financial Conduct Authority (FCA). The proposal comes as part of a broader initiative to streamline regulatory bodies and reduce bureaucratic hurdles in the economy. Business Secretary Jonathan Reynolds suggested reform could be on the cards, commenting: “We’ve got to genuinely ask ourselves the question: have we got the right number of regulators?”

Supreme Court blocks Reeves’ car loan case intervention

Chancellor Rachel Reeves’ attempt to intervene in a landmark case on car loan commission has been blocked by the Supreme Court. Reeves had tried to intervene after pressure from some lenders, who argued that any large compensation bill would disrupt the motor finance market. The Treasury accepted the Court’s decision. The case, scheduled for April, will hear an appeal by finance firms after the Court of Appeal ruled it was unlawful for lenders to pay a commission to dealers without informing customers.

Corporate zombie risk rises

Analysis by BDO has revealed a surge in the number of British firms at risk of becoming ‘zombie’ companies –those with enough money to continue operating and service their debts but not enough to invest in growth. BDO’s poll of 20,000 businesses found that 15.9% of mid-sized UK firms – those with sales of between £10 million and £500 million – are at risk of becoming zombies. This marks a 3.5% increase on a year ago. Property had the highest proportion of “at risk” companies, at 25.1%, while leisure and hospitality came second, with 23.4% of businesses deemed to be at risk.

Let us do the heavy lifting.

We’re the lender that simplifies property finance.

Relationship advice

Relationship banking works just as well for the brokerage sector

Steven MacDonald Head of Intermediary Business Handelsbanken for Intermediaries

WOur branches are at the very centre of our business and make nearly all banking and credit decisions

hat is a relationship bank? This is the second question we are used to being asked at Handelsbanken – the answer to the first is “Sweden, originally” – and it’s a good one. No bank will tell you they don’t want a relationship with their customers, and it means different things to different people. But for us it has meant the same thing for the last century and a half: we believe banking is best done by and with people you know. People who know your name, how your finances operate – whether that is your business or your mortgage. Historically, some may have thought this distinct from working with intermediaries – but we believe trusted professionals working together is more necessary than ever.

Born of trust

One of our core values is trusting people to do the right thing, given the right environment and the freedom to do so. We’re decentralised – in other words, our branches are at the very centre of our business and make nearly all banking and credit decisions. Colleagues in-branch are experts in their local economy and community, and the best-placed people to understand how they want to do business. It’s

not a model that works for everyone, but it works for us. We have worked with intermediaries for over 40 years, but last year we took the decision to become an NACFB Patron lender in recognition of the important role intermediaries play in delivering trusted finance.

Looking over the longer term

We look for long-term relationships, but that doesn’t just mean with customers. It can also mean with key business introducers and other trusted professionals. For NACFB Patrons operating both direct and intermediary channels in 2023, the broker channel typically accounted for 70% of their total SME lending. We know the market is evolving, and that this is increasingly the way that business is being done. That is why I have taken up the reins as national head of intermediary business, a new role reflecting our redoubled focus on the sector. So why do we think our relationship model is equally applicable here?

Brokers have the in-depth knowledge and expertise to provide bespoke solutions for clients, when something off-the-shelf isn’t going to cut it. The entire ethos involves using insight to deliver something that benefits everyone – but it only works if that specialist knowledge is there.

We work the same way. Our decentralised model uniquely places our branches at the centre of our proposition. What this means in practice is that every NACFB Member broker will have a branch of our bank nearby, which houses a dedicated team who are embedded in the local community and keen to forge a long-term sustainable relationship with brokers based in their area of operation. An expert within the branch will always be on hand to talk to about a new opportunity, whether it’s an initial steer on our credit appetite or to progress a fully packaged case.

Whether an SME or professional landlord, every case is manually underwritten by a person; not only do we take time to understand the deal, but also the business, the aspirations and challenges they face and their finance solutions for now and the future.

The branch will progress the case from early enquiry through to completion. Key decisions are made within the branch, so you are talking to the ultimate decision-maker. We understand how important communication is for broker and client; the branch

is hands on through the entire process, including valuation and legal stages, so there is always one named point of contact and direct number.

Doing sustainable business

Once an add-on, sustainability is a core part of client requirements and often a deal-breaker. Handelsbanken has ambitious sustainability targets – both for us and our customers. We aim to reach net zero by 2040 – ten years ahead of the industry standard – and are also committed to helping customers achieve their sustainability goals – whatever this means for them. This is where the personal approach comes in. Where clients have diverse portfolios, unusual properties, or other non-standard needs, a onesize-fits-all approach often won’t work. In fact, it’s often quicker to have one in-depth conversation than it is to try and go round the houses on various online tools and portals!

Business with confidence

At times of uncertainty, trust becomes a highly valuable commodity. Volatility in interest rates – although it is starting to stabilise – has yet to fully dissipate. The shape of the residential lettings market is changing as private landlords are increasingly replaced by professional institutionalised ones. All this means a greater-than-ever need for professionals who know their business. We believe there’s never been a better time to look for those long-term relationships with lenders too.

An expert within the branch will always be on hand to talk to about a new opportunity, whether it’s an initial steer on our credit appetite or to progress a fully packaged case

Decoding business exemption

Navigating broker-led lending’s biggest regulatory ambiguity

Sarah Cunningham Head of Compliance NACFB

Business exemption is a concept that promises simplicity but often leads to confusion. For commercial finance brokers and lenders, it determines whether an agreement falls under the Consumer Credit Act (CCA) 1974 or is exempt from it. Many brokers and lenders understand business exemption to mean that if a credit or hire agreement is primarily for business use and exceeds £25,000, it becomes exempt. However, there is a crucial piece of the puzzle that is often overlooked.

For a transaction to qualify as exempt, three conditions must be met: the financed amount must exceed £25,000 (for credit agreements) or the total repayable must exceed £25,000 (for hire agreements); the funds must be wholly or predominantly for business purposes; and an exemption declaration must be signed, transitioning the agreement from regulated to exempt. The confusion for many NACFB Member brokers arises at the point of introduction. This is because the exemption only takes effect once the finance agreement has been signed. Brokers may assume they are handling non-regulated business, only to discover that these agreements still need to be reported to the FCA in their RegData submissions. This gap between theory and practice often leaves brokers navigating the challenge of maintaining compliance whilst effectively serving their clients.

When concept meets reality

Consider this scenario: a broker is approached by a sole trader seeking £30,000 to expand their business. The broker knows the deal is likely to be exempt, but the exemption doesn’t kick in until the client signs the finance agreement. This means that at

the point of introduction, the deal is still considered regulated. The timing of exemption can create a Catch-22 for brokers who must hold FCA permissions to even begin these conversations and propose it to the lender – even though the final transaction is exempt from the CCA.

Such a regulatory haze is compounded by the FCA’s ‘use it or lose it’ mandate, which requires firms to relinquish unused permissions. The goal is to simplify oversight, but for brokers, the effect can be constricting. Brokers often serve clients with mixed profiles – sole traders who also run limited companies. Without the right permissions, brokers might have to steer deals exclusively through the limited company, potentially denying their clients rights that they may have under the CCA. This leads to a perception that the FCA’s approach, whilst well-intentioned, doesn’t fully account for the nuances of commercial credit broking.

The NACFB’s own data from last year illustrates how widespread these challenges are. Among surveyed brokers, nearly half said maintaining FCA authorisation was primarily necessary just to

Brokers may assume they are handling non-regulated business, only to discover that these agreements still need to be reported to the FCA in their RegData submissions

stay on lender panels. Only 43% felt these permissions were ‘very relevant’ to their actual work. Even more striking, 20% reported holding permissions they don’t use, underscoring the need for a more tailored regulatory framework.

Compounding the challenge is a broader perception gap. When NACFB Members were asked about the FCA’s understanding of their operations, only 7% felt the regulator demonstrated a ‘much better understanding’. Nearly 40% noticed no improvement, and 24% felt the FCA’s grasp had worsened. Such disconnect can fuel frustration and undermine confidence in the system.

This misalignment affects more than just brokers – lenders face significant risks when regulatory boundaries become unclear. Although brokers often feel the immediate impact of the uncertainty, lenders must grapple with the consequences of accepting deals that fall into these murky areas. For instance, if a lender processes what they believe is an exempt deal introduced by a non-regulated source, they will inadvertently be in breach of regulation as they have accepted a regulated introduction. This could render the agreement legally unenforceable, creating both financial and compliance challenges.

Many moving parts

Adding to this uncertainty is the evolving regulatory environment. As the government considers reforms to the CCA – potentially raising the threshold amount for regulated agreements – brokers and lenders alike face even more shifting ground. If the exemption threshold increases, more deals will fall under regulation, placing additional burdens on brokers and exposing lenders to compliance risks they may not be prepared to handle due to the compliance requirements of regulated finance agreements. This could potentially increase the FCA’s workload as brokers who have unknowingly relinquished their FCA licences due to not understanding business exemption, requiring them again.

Despite these challenges, the industry is not without a path forward. Brokers must tread carefully, maintaining a clear understanding of their client base and the nature of the transactions they handle. They must also be prepared to articulate the value of their FCA authorisation back to the regulator – not just for regulatory returns, but also for maintaining relationships with lenders. This means having the right processes and record-keeping in place to demonstrate compliance and to show how permissions, even if rarely used, contribute to their overall ability to serve a diverse client base.

For their part, lenders should consider the pressures their panel requirements place on brokers and look for ways to provide more transparent criteria that reflect both compliance and commercial realities. By clarifying their expectations, lenders can help reduce the regulatory guesswork brokers face and create a more stable operating environment for both parties.

At the heart of the matter though is a clear need for greater clarity and understanding. Whilst brokers must adapt and ensure compliance, the FCA must also work to understand how business exemption applies within the sector and how the broker needs the ability to serve both limited companies and regulated customers. A collaborative effort is needed – brokers, lenders, and regulators all have a role to play in aligning their expectations and requirements.

Ultimately, solving the business exemption puzzle will require an active and ongoing dialogue, a willingness to address industry pain points, and a commitment to balancing regulatory intent with real-world practicality. Only through a shared understanding can the industry move towards a more coherent and workable framework, one that allows brokers to thrive whilst still maintaining the integrity of the regulatory environment.

Navigating economic shifts

At the start of the year, the NACFB sat down with Professor Trevor Williams, the Association’s resident economist and a leading authority on the UK economy, to explore the key trends shaping the year ahead. In this exclusive Q&A, Trevor shares his expert insights on the challenges and opportunities facing brokers as they face into 2025.

How do you think the UK economy will fare in the next 12 months, and what should brokers focus on for SMEs?

Despite a slowdown in the second half of 2024, the UK economy grew by 1.4% in the year. Growth may slow this year but expansion will persist, driven by lower interest rates and faster global economic activity. However, risks come from US tariffs on European goods, including the UK, and potential bouts of financial market turmoil from tax cuts in the US that will add to its $35 trillion debt mountain, and its fractious domestic politics. Wage growth from increases in national living and minimum pay levels should boost consumer confidence and spending, benefiting SMEs. Additionally, a recovery in housing market activity from planning reform and lower interest rates should support broker activity throughout the year.

If interest rates drop, how could this affect commercial lending, and how can brokers prepare their clients?

Recent financial market turmoil saw bond yields rise, but swap and mortgage

rates tied to lending remained relatively stable, highlighting the importance of brokers in guiding clients through such periods. Lower UK interest rates, driven by slowing inflation and stronger growth, create opportunities for brokers to help clients invest in reforms from the incoming administration. The government’s stable majority provides a predictable policy environment, offering SMEs and brokers the certainty needed to plan for growth and navigate changing conditions effectively.

Do you think Labour’s NIC plans will change demand for commercial finance among small businesses?

While Labour’s NIC proposals might initially seem to dampen demand, SME borrowing data from the Bank of England shows a more optimistic picture. SMEs have been repaying loans at a slower pace than before, suggesting they are adapting to current and expected economic conditions. Though official surveys may not yet reflect this, the data points to cautious optimism and an increased willingness among SMEs to borrow and invest.

Besides rates and NICs, what other big trends or regulations should brokers watch for SME lending?

Beyond interest rates, SMEs face other challenges, such as increases in the national living and minimum wages. New planning reforms aim to simplify processes for SMEs, helping accelerate

Prof. Trevor

economic growth. Brokers should stay informed about these changes to guide clients in navigating opportunities and securing the right products. As much as the rate matters, understanding the broader context and aligning solutions to client needs is equally critical.

What advice would you give brokers to stay strong, manage risks, and stay competitive in changing times?

My unsolicited advice to brokers is to see the big picture while dealing with the details of the deal in front of them and the issues facing the client. This translates into staying abreast of the changing economic environment, being reactive and proactive to opportunities as they come along, being nimble, and being ready to change the advice and instruments that they offer clients to fit the situations they face. In summary, brokers should deal with the reality of the multiple issues that clients face and adapt to those to help clients deal with them by offering honest advice, and the most appropriate loan for their needs.

The government’s stable majority provides a predictable policy environment

Williams Economist University of Derby

Ready and willing

Opportunities in the specialist finance industry

Omkar Hushing Head of Buy to Let & Specialist Lending Underwriting Market Financial Solutions

Many have already likely written off 2025 in the property market. This is short-sighted. Yes, there are challenges ahead of us. But the coming months are likely to present a surprising amount of opportunity for landlords and property investors.

Supply and demand, despite all the rhetoric, is still the main driving force in any market

The buy-to-let (BTL) market offers a clear case in point. Landlords have faced a bleak reality since at least the 2022 mini budget. But thankfully, it looks like fortunes are about to reverse here. To start with, the broader economic picture is improving.

Bank of England governor, Andrew Bailey, expects four UK base rate cuts this year, which should push costs down across the market. So long as we keep on top of inflation, this shouldn’t be derailed and considering we kicked off 2025 with a surprise drop in the Consumer Price Index, it seems we’re already on the right track. In fact, the investment markets, various economists, banks, and consumer bodies expect rates to fall to between 3% and 4% by the end of the year. At the very least, this could restore a sense of confidence in the market.

Borrowers should be able to benefit, as many experts expect more competitive rates and terms from lenders themselves in 2025. The incentive may be there to utilise these potential deals too.

Despite all the rhetoric, supply and demand remain the main driving forces in any market. And towards the end of 2024, there were 21 people competing for every rental property in the UK according to Zoopla which forecasts that this supply and demand imbalance is set to continue and become a defining feature of the BTL market this year.

This isn’t to belittle the issues landlords have ahead of them. Cost, legislative, and market pressures still abound. The Renters’ Rights Bill, Awaab’s Law, student housing pressures, and more are on the way to make landlords’ lives harder.

But even with all this, rents are set to rise this year and, following a year of growth, BTL yields should remain surprisingly resilient in 2025 according to Simply Business.

Outside of the standard BTL market, other opportunities for property investors are set to emerge. That’s part of the beauty of the multifaceted property market. If one area isn’t working for a particular investor, they have plenty of alternatives to explore.

Take the commercial property market. Across industries, major employees are pushing for a return to the office. JPMorgan Chase, Amazon, WPP, and many more have all called staff back in, and we may be seeing a general reversal of work from home trends.

As such, we could see demand rise for offices across the UK. In fact, the UK office market reported the highest Q3 take-up since 2018 in late 2024 according to Savills, and this could continue over the coming months.

Also, renters, despite their own eye-watering costs, are still holding out hope for getting on the property ladder themselves over the coming years. Some 22% of renters believe that home ownership is within their reach within the next five years, according to Barclays’ Property Insights report. Evidently, property investors who could bring stock to these corners of the wider market could see their efforts greatly appreciated and rewarded.

And it’s the specialist lending market which can help facilitate all this. There is likely to be a flurry of activity over the coming months, especially from landlords.

As challenges mount, we may see many BTL investors rush for the exit signs, which could create opportunities for buyers and their portfolios. These opportunities may not stick around for long though, meaning borrowers will likely need flexible funding that can be issued in mere days.

There may be some hesitancy in utilising bespoke finance, but generally, bridging has come to the forefront of the industry and is clearly no longer thought of as a niche option for a select few. Throughout 2024, bridging went from strength to strength. Bridging loan books hit a record high in Q1 2024, hitting £8.1 billion according to the Bridging & Development Lenders Association (BDLA). From here, they jumped to £8.4 billion in Q2, and then £9.01 billion in Q3 – the first time we’ve ever topped the £9 billion mark.

Regardless of what’s on the way – the good and the bad – our industry is ready. We will be there for whatever investment strategies emerge.

Outside of the standard BTL market, other opportunities for property investors are set to emerge. That’s part of the beauty of the multifaceted property market. If one area isn’t working for a particular investor, they have plenty of alternatives to explore

We’ll do the heavy lifting

Broker Direct lending, now up to £750,000.

After our Broker Direct lending under £500,000 enjoyed results on an Olympian scale, we’re pushing the limit even further. Our bespoke service is now good for requests up to £750,000. Expect the same clear communication from the get-go from our dedicated team – ready for action, Monday to Friday, 9am to 5pm.

Emily Campbell Olympic Medallist

Breaking new ground

Charting the broker-led SME lending landscape in 2024

At the end of 2024, the NACFB gathered extensive survey data from its membership, capturing insights from both commercial finance brokers and lender Patrons. This annual study serves as a crucial barometer of broker-led lending, tracking market trends, appetite, and sentiment at a time when small business finance remains a central pillar of economic growth.

The findings presented in this report are more than just industry statistics – they reflect the role of brokers in driving SME growth, shaping funding accessibility, and ensuring businesses have the capital they need to expand. This is particularly relevant against the backdrop of the Labour government’s growth agenda, where unlocking finance for small businesses is seen as a critical enabler of wider economic ambitions.

To strengthen the credibility and depth of this year’s findings, the NACFB partnered with Freshminds, a leading data and research consultancy. Their independent analysis ensures a robust, evidence-based interpretation, offering a clear picture of how brokers and lenders steered the market in 2024. The NACFB urges brokers, lenders, and industry leaders to use these insights to shape their strategies for 2025 and beyond.

As the intermediary-led SME lending space continues to drive growth and innovation, the vital role of the commercial finance broker has never been more evident.

Planting the seeds

The broker-led SME lending landscape

Brokers were asked to identify the key factors that influenced changes in their service offering in 2024. Their responses highlight a mix of market demand, economic conditions, and industry shifts that shaped the way brokers structured and provided access to finance for their clients. The primary factors cited by brokers were:

Property finance – 61% of total activity

Brokers played a major role in financing property transactions across commercial, residential, and development markets:

Leasing & asset finance – 24% of total activity

Funding for equipment, vehicles, and asset-backed investments remained a key area of broker-led lending:

Business finance – 15% of total activity

Brokers facilitated a range of SME funding solutions, covering working capital, acquisitions, and unsecured lending:

Broker activity in 2024

As part of the NACFB’s 2024 survey, brokers reported the finance types that made up their successfully placed transactions, measured as a percentage of total activity by value. This provides a clear view of where brokers delivered funding across the SME and property finance landscape.

Business sector coverage by NACFB Members

Regional distribution of broker activity in 2024

The 2024 survey data highlights a clear shift in broker-led lending, signalling a move away from its traditional concentration in London and the South East. These regions saw notable declines in market share (-7% and -6% respectively), whilst the West Midlands and South West gained ground (+4% and +1%), reflecting a more regionally distributed lending landscape.

Such decentralisation suggests brokers are adapting to shifting demand, unlocking opportunities beyond the capital. Scotland, Wales, and Northern Ireland also made modest gains, whilst the East of England and East Midlands recorded year-on-year declines.

Reliance Bank prioritise business lending to organisations that deliver positive social impact in the UK.

We provide:

Loans for refinancing

Loans for business acquisition

Loans for property purchase

Loans for refurbishment

Loans for business expansion

We have a specialist understanding of the following key sectors:

Charities

Community

Education

Faith Organisations; Churches, Religious Orders

Health and Social Care

Social Enterprises

Social Housing

Property investment

SME sectors

Reliance Bank wins Award from NACFB Community Lender

of the Year

We outperform high street banks for customer satisfaction

In the 2024 Charity Finance Banking Survey, Reliance Bank achieved first place for Relationship Management.

Helping good people do great things with money

Reliance Bank has been at the forefront of socially responsible banking since 1890, when we were formed by William Booth the founder of The Salvation Army.

Hover your phone's camera over the QR code to read about our Business Loans.

Power to change lives for the better

Reliance Bank aligns its lending practices to the United Nations Sustainable Development Goals (SDG’s) – a global framework for governments, businesses and societies to help reduce poverty, protect the planet’s future and improve lives.

Nurturing growth

Broker activity and lending trends

Average transaction size in 2024

The majority of broker-facilitated transactions fell within the £200,000 to £999,999 ranges, accounting for 52% of responses. The most common individual deal size was between £400,000–£499,999 (12%), closely followed by £300,000–£399,999 (11%) and £500,000–£749,999 (8%)

Lower-value transactions under £100,000 represented 27% of deals, with small business financing still playing a significant role. At the higher end, deals above £1 million accounted for 14% of transactions, but only 0.4% exceeded £10 million

Customer loyalty is critical, with nearly half of all leads coming from returning clients, underscoring the importance of strong client relationships and repeat business. Referrals remain key drivers, with clients and professional introducers being significant sources. Change in average transaction size (2024 vs. 2023)

In 2024, 15% of transactions completed by NACFB Member brokers were regulated, up a single percentage point on 2023’s total. This is down from 17% in 2022 and 16% in 2021.

of brokers reported an increase in average deal size compared to 2023

experienced a decrease, suggesting a more cautious lending environment for some firms 11%

Primary lead sources for brokers

Brokers in 2024: At a glance

£26.5bn

Total value of lending facilitated by just NACFB Members in 2024

of all intermediary-led lending via commercial finance brokers – an estimated £38 billion NACFB Members accounted for nearly three-quarters

The average NACFB Member originated in 2024

165 transactions

220 approximately new clients

were welcomed by each NACFB Member across all finance types in 2024

of SME clients received a different financial solution than initially requested 25%

1,400 SME clients

approximate number on an NACFB Member’s books in 2024

20%

of new SME clients were previously declined elsewhere before securing funding through an NACFB Member

The average business funded via an NACFB Member had

16 employees

of NACFB Members' clients refinanced in 2024 25%

The majority of NACFB Members’ SME clients fell within the £500,000 to £2.49 million annual turnover ranges, accounting for just under half (49%) of respondents. The largest single segment (26%) reported turnover between £1 million–£2.49 million, while 23% fell within £500,000–£999,999

Mid-sized businesses with a turnover of between £2.5 million–£4.99 million made up 11% of clients, whilst only 6% exceeded £5 million in annual turnover. At the smaller end of the scale, clients with turnover below £250,000 accounted for 18% of respondents, reinforcing the role of brokers in supporting smaller and scaling SMEs.

£10,000 – £24,999

£25,000 – £49,999

£50,000 – £74,999

£75,000 – £99,999

£100,000 – £149,999

£150,000 – £199,999

£200,000 – £249,999

£250,000 – £499,999

£500,000 – £999,999

£1m – £2.49m

£2.5m – £4.99m

£5m – £9.99m

£10m – £19.99m

Specialist lenders form the largest group among NACFB Patrons, followed by challenger banks and CDFIs. High street banks and P2P lenders have a smaller presence. This data reflects lender numbers within the NACFB Patron network, not market share or lending volume.

The average broker-facing commercial lending team among surveyed NACFB Patron lenders consists of 58 staff, including underwriters, BDMs, relationship managers, and support staff. Notably, two thirds (67%) of lenders expanded their broker-facing teams last year.

Total lending via intermediaries in 2024

Surveyed NACFB Patron lenders reported a wide range of total lending values via commercial intermediaries in 2024.

£500,000 -

£1m - £1,999,999

£2m - £4,999,999

£5m - £9,999,999

£10m - £19,999,999

£20m - £39,999,999

£40m - £59,999,999

£60m - £79,999,999

£80m - £99,999,999

£100m - £199,999,999

£200m - £399,999,999

£400m - £599,999,999

£600m - £799,999,999

£800m - £999,999,999

£1bn - £1,999,999,999

Lender funding lines sources

Lenders within the NACFB Patron membership utilise a variety of funding sources to support their lending activity. The data below reflects the percentage of lenders that use each funding type, rather than the proportion of total market funding.

This data underscores how deeply intertwined banks are within the UK’s current SME funding ecosystem, not only lending directly but also providing crucial funding lines that support a wide range of other finance providers.

Lenders in 2024: At a glance

The average size of broker-led loans in 2024 compared to 2023, as reported by NACFB Patron lenders

of NACFB Patron lenders’ total UK SME lending last year came via the commercial intermediary channel on average, an estimated 67% NACFB Patron lenders product offerings in 2024 maintained their existing product range 56% diversified by introducing new offerings 36% refined their focus towards more specialised lending 8%

2,400 commercial finance transactions 55% increased 30% unchanged 15% decreased

The average number completed in 2024 via intermediaries per NACFB Patron lender

of NACFB Patron lenders reported an increase in the number of brokers on their full panel in 2024 over 83%

NACFB Patron lenders maintain extensive broker panels, with an average full panel size of

590 brokerages

who have submitted business within the past 12 months

Within this full panel, and on average across all lender types, an actively engaged core of submit business more than twice a year

170 brokers

NACFB Members worked with an average of 80 lenders in their active funding panels over the past two years. For the purposes of this question, the NACFB defined an ‘active funding panel’ as the group of lenders that a broker has successfully transacted business with in the past two years.

Harvesting opportunities

Lender-broker relationships and market dynamics

Lender types, selection trends

Specialist lenders experienced the largest year-on-year increase in 2024 (+8%), further solidifying their position as the dominant lender type, whilst challenger banks (-3%) and own book lending (-2.5%) saw declines in market share relative to last year. High street banks (+2%) maintained steady growth, while P2P lenders (-1%) and other lenders (-3%) declined slightly, with fintech lenders appearing as a new, albeit small, category. 3.1

saw an increase, indicating a selective expansion in lender willingness to fund deals 20%

of brokers reported that lender appetite remained broadly unchanged throughout the year 51%

Types of finance most affected by declining lender appetite

From the surveyed brokers’ perspective, commercial and unsecured finance saw the biggest declines in lender appetite, while trade finance and merchant cash advances remained largely stable.

observed a decrease, suggesting that some lenders tightened criteria or became more risk averse 29%

Broker strategies for adapting to reduced lender appetites

This data highlights how brokers primarily turned to alternative lenders while also adapting their service offerings and strengthening lender relationships.

Worked with alternative lenders

Targeted a broader range of clients

Reduced the number of loans facilitated

Deferred certain funding applications to a later time

focus to lower-risk sectors

Collaborated with other brokers or intermediaries

Broker relationships with high street banks

2024’s survey data indicated a broadly stable relationship between brokers and high street banks, with a slight positive tilt overall despite some experiencing tightening conditions. 3.5

saw an improvement, with 8% noting significant progress and 25% experiencing slight improvements 33%

reported no change in their relationship with high street banks 50%

reported an overall decline, with 14% stating a slight worsening and 4% experiencing a significant deterioration 18%

stated that only a small proportion of cases required alternative lenders 17% relied exclusively on traditional banks 2% of NACFB Members reported that alternative lenders were the best fit for their client needs either frequently (41%) or occasionally (41%) 82%

Broker relationships with challenger banks

The data suggests a broadly positive trend, with challenger banks strengthening their ties with brokers slightly more than traditional high street banks.

of brokers reported an improvement in their relationship with challenger banks, with 16% seeing significant progress and 41% experiencing slight improvements

indicated no change in their relationship with challenger banks

reported a decline, with a further 3% seeing a slight worsening and 1% experiencing a significant deterioration 4%

Broker outlook on alternative lenders in 2025

of brokers expect an increase in their use of alternative lenders, with 25% anticipating a strong increase

foresee no significant change, indicating stable lender preferences for a large portion of the market

expect a decrease in their engagement with alternative lenders 1%

Broker view: Most common reasons for rejected applications in 2024

Last year’s lender rejection patterns highlight a strong focus on risk mitigation, with sector risk (31%) and poor credit history (29%) being the two most cited reasons for declined applications. Stricter lending criteria (25%) and declining appetite for certain sectors (23%) also played a major role in limiting finance availability.

Financial health concerns remain a key barrier, with lack of strong cash flow (18%), high debt utilisation (14%), and collateral shortfalls (10%) influencing decision-making. Additionally, economic factors such as rising interest rates (10%) and high loan-to-value ratios (9%) have added further constraints. Notably, only 7% of respondents stated that no applications were declined, indicating that most brokers faced at least some level of rejection when securing funding for clients.

Assessing broker performance: What matters most

For NACFB Patron lenders, broker performance is measured through a balance of quality, efficiency, and consistency. Surveyed lenders were asked to rank the criteria they use to measure broker performance on their panel.

Lender view: Reasons for declined intermediary-led applications

Lenders were asked to identify the most common reasons for declining commercial finance applications submitted via intermediaries in 2024.

3.12

Impact of October’s commission disclosure ruling

The industry’s move to full commission disclosure and informed consent capture in October has had mixed effects on broker operations, with some encountering significant challenges while others report minimal impact.

The most widely reported challenge is the increased time spent explaining commissions to clients (33%), which suggests that transparency requirements have added a degree of complexity to client interactions. However, 41% of respondents stated they had not experienced any significant challenges, indicating that a large por tion of the sector has been able to adapt smoothly.

on the commission disclosure ruling

The overall reception to the commission disclosure ruling is mixed, with a slight lean towards a positive or neutral stance. Whilst the sentiment is split, the overall takeaway is that whilst the ruling presents some challenges, many in the industry believe it brings long-term credibility and fairness to broker-lender relationships.

Commission models used by brokerages in 2024

The vast majority of NACFB Members (82%) utilise – although not always exclusively – a percentage-based commission model, reflecting an industry standard where fees are tied directly to loan amounts. Notably, hybrid models (14%) are gaining traction, suggesting an evolving approach where brokers secure a blend of both lender commissions and direct client fees.

Tiered commissions (12%) show some level of flexibility in pricing based on client or loan characteristics. Retained commissions (4%), where brokers receive ongoing payments over time, remain relatively rare.

The data indicates that brokerages receiving lender-paid commission on transactions reported an average commission percentage of approximately 2.2% in 2024. This figure represents an average across all finance types, covering a diverse range of lending products, from commercial mortgages and asset finance to unsecured lending and invoice finance.

Impact of future regulatory compliance on brokerages

Brokerages had divided opinions on the potential impact of future regulatory compliance changes. The majority (44%) of respondents feel there will be no major impact, implying that most brokerages may be accustomed to navigating compliance requirements.

Separately, brokers were asked specifically whether the Financial Conduct Authority’s Consumer Duty was impacting the lender/broker dynamic: two-thirds (66%) of respondents felt that the Duty had not significantly changed lender-broker relationships.

Cultivating the future

Challenges, outlook, and confidence

Key factors shaping broker futures

The data highlights the biggest market influences shaping brokerages in 2024. Brokerages are navigating economic headwinds and cost pressures while seeing opportunities in client demand and lender partnerships. Those who can balance cost efficiencies, digital engagement, and market adaptability are likely to stay ahead.

4.2

Biggest operational challenges for brokers

Surveyed brokers were asked to identify the internal and operational factor most impacting their business. Responses highlighted a range of challenges, with client relationship management and lender coordination emerging as the most significant.

Top threats to brokerage success

Brokers were asked to identify the primary threat to their firm. Whilst internal operations play a key role in broker success, external factors often present the greatest challenges. Brokers are contending with lender-driven shifts, from stricter criteria and shrinking panels to evolving risk appetites.

Biggest threats for lenders

Surveyed Patron lenders were asked to identify all of the perceived threats to their organisation. They shared the range of challenges impacting their commercial finance activity; these threats span macroeconomic pressures, market competition, more operational challenges, as well as structural risks.

Confidence in scaling over the next three years

Both brokers and lenders were asked to assess their confidence in scaling operations to meet increasing demand over the next three years. The results indicate a strong sense of preparedness within the sector, with few respondents expressing uncertainty or lack of confidence.

The future of the lender/broker dynamic

Surveyed lenders shared their perspectives on how they feel broker relationships will evolve over the next three years, with most anticipating either a steady role or an increasingly strategic partnership. Their responses suggest an overall positive trajectory for broker-led lending, with over half of lenders (53%) believing that brokers will remain as important, if not more so, in the coming years.

Brokers will play an increasingly important role

The role of brokers will stay the same

Brokers will become less important as lenders engage directly with clients

Brokers will focus more on niche markets or specialised services

Brokers will evolve into strategic partners for lenders

Lenders will rely on a smaller panel of brokers

SME lending market in the next 12 months

Surveyed brokers appear less optimistic about the future than their lender counterparts, with only 18% feeling very optimistic compared to 52% of lenders, while a greater proportion of brokers (12%) express some level of pessimism versus just 5% of lenders.

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Sunil Dial Director of Revenue multifi

Beyond bricks and mortar

Why property finance brokers should explore the booming SME cashflow lending market

The UK economy has begun to stagnate once again. While house prices have rebounded to record highs in 2024, exceeding those seen in 2022 (according to Nerdwallet), Zoopla says that transaction volumes are predicted to remain subdued. Furthermore, the increased national insurance contributions imposed on UK businesses have added significant financial burdens, leading to reduced hiring, spending, and investment, as well as a growing demand for financial support. These developments present a unique challenge for mortgage brokers, who may experience reduced business volumes and increased competition. However, this shift in the lending landscape also presents a prime opportunity: diversification into the thriving SME cashflow lending market.

SME cashflow lending landscape

The UK SME sector is a vital engine of the economy, and the British Business Bank reports that demand for external finance remains strong. Research from Money.co.uk has found that various factors, including the need for business development, investment in new equipment, and expansion within the UK, fuel this demand.

Unlike property lending, which primarily focuses on asset values and loan-to-value (LTV) ratios, business finance requires a more comprehensive understanding of the borrower. According to a fellow NACFB Patron, Market Financial Solutions, brokers need to delve deeper into the business’s operational dynamics, growth

potential, and market position. This includes evaluating factors such as:

• Operational dynamics: Revenue, profitability, cashflow, management experience, and operational efficiency;

• Growth potential: Business plan, market opportunity, scalability, and competitive advantage;

• Digital presence: Online visibility, website traffic, social media engagement, and e-commerce capabilities;

• Technological capabilities: Use of technology to enhance efficiency, innovation, and customer experience;

• Industry context: Market trends, competitive landscape, and regulatory environment;

• Market position: Market share, brand reputation, and customer loyalty.

This shift necessitates a change in brokers’ mindsets. It requires developing expertise in analysing business financials, understanding market dynamics, and evaluating the impact of technology on business operations.

Key success factors

Traditionally, businesses have turned to their banks for assistance. However, securing support through these avenues is becoming increasingly unlikely unless a business boasts a strong historical relationship, an exceptional credit rating, and substantial cash reserves. Moreover, the financial products

offered by traditional lenders often fail to address specific needs, following a “one-size-fits-all” approach.

In the past, businesses or introducers seeking credit typically presented their latest financial statements, management information (MI), and cashflow forecasts for assessment. However, the credit landscape and the methods lenders use to evaluate applications are evolving. This shift can potentially broaden access to credit for more UK businesses.

Advances in technology are reshaping how the business community is supported, offering real-time insights and transforming credit assessment. Open banking has emerged as a key innovation, enabling lenders to access and analyse bank transaction data directly without needing cumbersome attachments. Similarly, open accounting allows lenders to retrieve information directly from accounting software via a simple link, streamlining the process for businesses and introducers.

While these advancements are promising, it is critical to understand how to leverage them effectively. Traditional credit assessment methods may fall short when incorporating data from open sources. Financial accounts, for example, offer valuable historical context on past performance and operational costs but fail to provide the real-time insights necessary to evaluate affordability. A company’s financial health can shift

rapidly in today’s volatile business environment – influenced by unpredictable geopolitical events. This underscores the importance of using open banking data to analyse trends such as seasonality and revenue fluctuations, allowing for more informed decision-making.

Non-financial factors, such as management experience, remain relevant but must be complemented by real-time data, which is often more accurate and transparent. A simple rule of thumb for assessing a business case in today’s dynamic environment is to look for sustained positive cashflow – more inflows than outflows over time. Positive cashflow is a key indicator of affordability and is essential for responsible lending.

The bottom line

Traditional tools like financial accounts remain valuable for understanding a business’s history, but they should be supplemented with open banking data to gain a comprehensive view of current performance. If open banking data is unavailable, bank statements can be a helpful proxy. Positive cashflow is the cornerstone of affordability and a critical factor for supporting businesses effectively.

Cashflow lenders ultimately focus on positive cashflow, which enables better support for more businesses and ensures they have the resources needed to thrive in today’s challenging economic landscape.

Scaling to succeed

NETSOL’s Jason Hurwitz on dreaming big, getting it done, and having fun

It’s the last full week of the year, the windswept streets around St. Paul’s Cathedral hum with festive energy, a mix of hurried shoppers and office workers savouring their final mince pies of the season. Amid the bustle, we find Jason Hurwitz, a man whose career trajectory rivals the cityscape’s own blend of tradition and modernity. Confident yet approachable, Jason greets us warmly, carrying himself with the assured demeanour of someone who’s as comfortable in the boardroom as he is in a food market.

Jason is an intriguing blend of entrepreneur, strategist, and innovator. He’s the European sales director at NETSOL Technologies, one of the NACFB’s latest supplier Partners, which provides software solutions for asset finance and leasing. Their tools are designed to support brokers and lenders in managing finance processes more efficiently.

Jason’s career has already included pivotal positions at Aldermore, Close Brothers Asset Finance, and UBS Investment Bank. Across these roles,

he has a record of combining visionary thinking with a grounded, practical approach to the challenges of servicing modern finance businesses. He also brings a surprising twist to his resume as the one-time founder of Thorne’s Foods, a Brighton-based artisan food venture. Throughout the course of our sit down, this and other detours into the culinary world are seamlessly interwoven with anecdotes from his high-profile roles across UK lending.

Over closing coffees, Jason shares that, from time to time, he exchanges book recommendations with the NACFB’s new CEO, Jim Higginbotham, often exploring themes such as futurology and the power of ideas. It is this forward-thinking outlook that seems to best define Jason’s approach, and it’s what makes him a compelling figure to speak with about the future of brokers, lending, and technology.

Our fast-paced conversation covers a wide array of topics, from the evolution of the UK asset finance market to the balancing act between innovation and tradition – as well as a spot of cheese judging along the way…

Let’s kick-off with your career to date. You’ve held some significant roles, how have these experiences shaped your understanding of the UK broker market and your approach to fostering growth?

My career started in investment banking at UBS, which gave me a solid grounding in strategy, execution and growth. I left to start my own business, an artisan food venture called Thorne’s Foods. Running a small business taught me the challenges SMEs face, especially when it comes to accessing finance. I saw the broker’s role from a customer’s perspective, which has stayed with me throughout my career.

Later, I joined Close Brothers and Aldermore, where I focused on SME lending and the broker channel. At Close Brothers, I worked across both direct and broker-led channels, while at Aldermore, I led strategy and projects to deepen broker relationships, increase specialisation and improve their service offering. These roles gave me a 360-degree view of the broker ecosystem, and now at NETSOL, I’m using that experience to help brokers and lenders adapt to a rapidly evolving market.

How did the NETSOL opportunity arise?

My transition to NETSOL felt natural. Having worked closely with technology solutions as a client at Aldermore, I was already familiar with NETSOL’s capabilities. The chance to lead their European sales strategy was too compelling to pass up. What excites me most is the entrepreneurial culture at NETSOL. Unlike in regulated banking, where implementing innovation can be a drawn-out process, NETSOL’s agility allows us to act swiftly.

Brokers often express concerns about technology replacing their role. How does NETSOL address this scepticism?

That’s a common concern, but it’s misplaced. Technology is not here to replace brokers but to augment their expertise. Platforms like Transcend automate administrative tasks, freeing brokers to focus on their strengths

– relationship building and support services. Brokers shouldn’t be spending hours gathering compliance evidence or managing manual workflows. Instead, tech can streamline these processes, allowing brokers to scale their operations and provide even better client service.

The central message I try to relay is that technology should underpin the human element, not replace it. Brokers play an essential role in navigating a complex funding landscape, and tech enables them to enhance that service and do it more efficiently.

Can you tell us a little more about Transcend and its relevance to brokers?

Transcend is a suite of modular tools designed to simplify the complexities of asset finance. For brokers, the standout feature is Transcend Link, which connects customers, brokers, and lenders into a unified workflow. It’s cloud-based and highly configurable, meaning we can tailor it to a broker’s specific needs and deploy it quickly –often within weeks. Brokers can now access market leading tech tailored to their business without big budgets and big projects.

The platform enhances efficiency by easy management of proposals, on screen performance dashboards, as well as automating document generation, compliance tracking, and communication between parties. For example, brokers can issue fully compliant commission disclosure documents with a single click. This not only helps to meet regulatory demands but also reduces administrative burdens, letting brokers focus on value-added activities.

It’s been the hottest of topics, but the Court of Appeal’s judgment on commission disclosure has really put the broker/lender dynamic under the spotlight. What’s been your take on the developments?

The judgment has undoubtedly created challenges, particularly with its retrospective implications. Whilst

commission disclosure is a positive step toward transparency, for me personally, the expectation that brokers and dealers act as fiduciaries seems too high a bar. Brokers provide expertise and options, but they’re not obligated to act neutrally as whole of market financial advisors.

At NETSOL, we’ve supported brokers and lenders by adapting our cloud origination platform to handle the new requirements seamlessly, within 36 hours. For example, Transcend Marketplace tech enables brokers to issue disclosure documents quickly and maintain a clear audit trail within a smooth customer journey. This capability has been critical in helping our clients navigate the regulatory landscape efficiently and quickly.

The UK broker market is often described as vibrant and diverse. How does it compare to other markets in Europe?

The UK market is unique in both its scale and dynamism. Much of that comes from increased capital requirements post credit crisis and the resulting contraction of retail banks, which led to a surge in highly skilled individuals entering the broking industry. This created a thriving ecosystem that’s unmatched in most European markets.

In contrast, many European markets are more vendor-driven, with fewer independent brokers. That said, European lenders often have a stronger focus on asset management, valuing the long-term worth of the asset rather than just the customer’s credit profile. There’s a lot both sides can learn from each other.

Looking ahead, what other trends do you see shaping the asset finance sector?

Several trends are emerging. First, brokers are becoming more strategic, focusing on scaling their businesses through technology and data-driven decision-making. Second, customer expectations are rising. Clients demand faster, tech-enabled services while still valuing the personal touch brokers provide. Lastly, compliance will remain a significant driver. The ability to

demonstrate transparency and good conduct will be non-negotiable, making technology an essential enabler to doing this without material business disruption.

You talked of ‘scaling a brokerage’, this is a challenge many firms face. What advice would you give to brokers looking to grow their businesses?

The first step is to embrace technology. You can’t scale effectively if you’re managing operations on spreadsheets and email alone. Invest in tools that help automate your processes, track performance, and help you work smarter.

Second, think strategically about your client base. Not all opportunities are worth pursuing. Focus on the segments where you can add the most value and tailor your services accordingly. It’s also important to think about the long-term. If you’re looking to build enterprise value and eventually sell your business, you need to create something that stands on its own two feet and is scalable, not solely reliant on personal relationships.

Lastly, don’t underestimate the importance of partnerships. Work closely with lenders to build strong, mutually beneficial relationships. Collaboration is key to driving growth in today’s market.

What’s your view on how brokers can demonstrate their value to both clients and lenders?

Transparency is critical. Clients need to understand the service brokers are providing and why it’s worth the cost. Brokers should stand tall on the value of the service they bring. Similarly, lenders need to see clear evidence of the broker’s conduct and contribution to the transaction.

One way to achieve this is by leveraging data. For example, brokers can use analytics tools to track the performance of the deals they place and share those insights with lenders. It’s about moving beyond anecdotal evidence to demonstrate tangible value.

At the same time, brokers need to keep the human element front and centre. Technology can handle the admin, but it’s the broker’s expertise and relationship-building skills that set them apart. Striking that balance is the key to long-term success.

Outside of work, how do you unwind?

I’m fortunate to live near the sea in Shoreham, just outside Brighton. It’s a fantastic place to clear my head and think creatively. My wife works in the NHS, which keeps me grounded, and we have three kids and a dog who keep us busy. I sit on the board of a couple of charities which I find extremely rewarding, a chance to make a difference and give back, I’m also a foodie; my time running an artisan food business left me with a deep appreciation for quality

ingredients and flavours. Fun fact: I was once a world cheese judge, which was as delicious as it sounds – at least for the first few hours.

Finally, can you share with our readers what guiding philosophy has helped steer your career?

My approach can be summed up by a simple Venn diagram: dream big, get it done, and have fun. No challenge is insurmountable if you’re willing to roll up your sleeves and tackle it head-on. This mindset has been a constant, whether in my banking career, my entrepreneurship, or my work in the technology space. At the end of the day, I’m passionate about creating value and making a meaningful impact, especially in supporting SMEs and brokers who drive economic growth.

Jobright

Peter Head of Technology 365 Finance

Empowerment not replacement

Leveraging AI to enhance customer experience in finance

Artificial Intelligence (AI) has rapidly become a hot topic across industries, and commercial finance is no exception. While some see AI as a disruptive threat, the reality is far more positive. With the right approach, AI becomes a powerful enabler complementing rather than replacing the human touch in finance. By understanding where AI excels – and more importantly, where it doesn’t – brokers can leverage this technology to streamline operations, improve client outcomes, and differentiate themselves in a competitive market.

Enhancing not replacing

AI excels at tasks requiring speed, accuracy, and data-driven insights. From document verification to credit risk analysis and fraud detection, AI outperforms manual processes in both efficiency and precision. For example, AI-driven systems can quickly process financial documents to identify discrepancies, saving brokers valuable time that can be spent building client relationships.

Another prime example is open banking, where AI-driven platforms analyse transaction data to provide brokers with a clearer picture of a client’s financial health. This allows brokers to craft tailored funding solutions that are not only data-driven but also aligned with the client’s unique needs.

However, AI’s utility isn’t universal. The most critical aspects of a broker’s job such as fostering trust, negotiating complex deals, and understanding the nuances of a client’s goals are best left to human expertise. These are areas where lived experience and the personal touch of a skilled broker remain irreplaceable.

Breaking down misconceptions

A significant barrier to AI adoption is the confusion surrounding its capabilities. Many people equate AI solely with tools like ChatGPT or other Large Language Models (LLMs), which are just one subset of the broader AI landscape. It’s important to differentiate between AI, Intelligent Automation (IA), and Artificial General Intelligence (AGI).

AI refers to systems, often powered by machine learning, designed to perform specific tasks, like analysing data or credit decisioning. IA involves the automation of repetitive processes, such as sending follow-up reminders to clients or performing KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. Unlike current AI, AGI aims to achieve human-like intellect across all tasks – a goal that remains purely hypothetical for now. Understanding the distinctions can help brokers see AI as an ally rather than a threat.

AI as a competitive advantage

AI is not here to replace brokers; but to empower them. By offloading routine tasks to AI, brokers can focus on what they do best: building relationships, solving complex problems, and delivering personalised solutions. Far from being a threat, AI offers brokers the opportunity to enhance their services and position themselves as forward-thinking professionals in an evolving industry.

In the end, successful adoption of AI is not about choosing between technology and human skill – it’s about finding the perfect balance between the two. By embracing AI as a partner, brokers can unlock new levels of efficiency and client satisfaction, ensuring they stay ahead in an increasingly tech-driven world.

Successful adoption of AI is not about choosing between technology and human skill – it’s about finding the perfect balance between the two

BRIDGING WITH MOMENTUM.

The human touch

How brokers can navigate the evolving SME finance landscape

Jake Furman Head of Credit Momenta Finance

SME finance in 2025 is undergoing significant transformations, driven by economic shifts, regulatory changes, and the integration of new technologies. At the heart of this evolution are brokers, who play a critical role in facilitating access to finance for their clients. This article delves into the challenges and opportunities facing SMEs and brokers, highlighting the indispensable value of human-led advice and decision-making in an increasingly technology-driven industry.

Economic outlook and SME growth plans

Despite uncertainties in the near-term economic outlook, some SMEs are showing robust growth plans. According to Novuna Business Finance, 80% of small businesses in the UK are looking to drive growth in 2025 by implementing new initiatives. This trend presents a valuable opportunity for brokers to support SMEs with their financing needs, helping them navigate complex environments and capitalise on emerging trends.

The broker’s role beyond transactional services

Brokers are no longer just facilitators of financial transactions; they have evolved into trusted advisers. Their deep understanding of SMEs’ unique needs and challenges enables them to identify opportunities and secure funding that drives growth. For instance, brokers can assist SMEs in succession planning, strategic investments, and fostering long-term relationships with lenders.

The human element in brokerage services remains paramount. While technology, such as open banking and AI-driven systems, streamlines the application process and enhances efficiency, it is the human touch that provides nuanced judgment and critical decision-making necessary for bespoke financial solutions.

Brokers who invest in their strategy, work closely with lenders and develop deep vertical sector expertise can offer tailored and innovative propositions for their clients.

Market adaptation and evolution

Market conditions and risk profiles are constantly evolving, and lenders must adapt their product portfolios accordingly. Brokers who maintain close relationships with lenders’ business development managers (BDMs) and credit teams can stay updated on these changes and guide their clients through the shifting landscape. This adaptability is crucial for accessing finance in a market where traditional banks may no longer have the same appetite for certain types of lending

Economic confidence and lending prospects

The economic outlook for 2025 is promising, with rate cuts and increased market confidence expected to boost SME lending. Bank lending to businesses is forecast to grow by over 5% in 2025 according to EY. This growth, coupled with the need for £170 billion of loans to be refinanced in the next 12 months (according to Bayes Business School), presents a significant opportunity for brokers alongside lenders to facilitate access to finance for SMEs.

It is the human touch that provides nuanced judgment and critical decision-making necessary for bespoke financial solutions

A trusted partner for business funding

We’re one of the UK’s largest independent SME funders and have been providing specialist and adaptable working capital finance for over 40 years. We support businesses with improving cashflow, investing in new equipment or trading internationally through our Invoice Finance, Asset Finance and Foreign Exchange solutions. Awarded NACFB Factoring and Invoice Discounter of the Year 2024, for the second year running, we are a funding partner you and your clients can rely on.

Increasing energy efficiency

Commercial property EPC update

Marc Callaghan Head of Commercial Lending InterBay (part of OSB Group)

The built environment contributes around 25% of the UK’s total greenhouse gas emissions, according to the UK Green Building Council. Given the estimate that 80% of occupied buildings that will exist in 2050 (planned UK Net Zero date) have already been built, upgrading the existing stock is considered a necessity if the government is to achieve its target, enshrined in law, of a 78% reduction in greenhouse gases by 2035. These targets directly affect commercial property owners and present ongoing opportunities for the brokers and lenders who support them.

To support the reduction in greenhouse gas emissions, in 2018, Minimum Energy Efficiency Standards (MEES) were established to help improve the energy efficiency of commercial and domestic buildings in the UK. Energy Performance Certificates (EPC) are an integral part of the process because they document the energy efficiency and associated emissions of buildings and make recommendations for improvement.

EPCs for commercial property

Awareness of EPCs increased in 2018 because of MEES, with any new leases being required to have a minimum EPC rating of E. Further reform in 2023 added existing leases to the requirements, such that all privately rented non-domestic properties must now have an EPC rating of E or above – except for those properties that are EPC exempt.

As part of a comprehensive risk assessment and to ensure compliance with the regulations, lenders require sight of EPCs when underwriting both commercial and residential loan applications.

EPC assessments must be undertaken by an accredited assessor and the outcome provides a rating for the property from A – G (A being the

best and G the worst). EPCs for non-domestic property differ slightly to their domestic equivalent, entail more detailed inspection and subsequent recommendations. They estimate the cost of powering the property and its related emissions and provide guidance on what improvements can be made. Once complete, a certificate is valid for ten years.

In addition to providing a rating, an EPC recommends the measures that can be undertaken to improve the overall rating. Some of these could be small gains whilst other, larger scale improvements pertinent to commercial buildings may have a significant cost implication. Consideration will need to be given to how cost-effective improvements will be and the long-term benefit both in terms of energy saving but also the value of the property.

CBRE data suggests that tighter regulation is inevitable, and properties with an EPC rating below B are increasingly seen as requiring upgrades in the future. This is going to be a big ask given that across England and Wales only 10% of properties are rated B or above. Major regional cities have a higher share of A and B-rated commercial buildings; Leeds and Manchester have the highest share of ‘energy efficient’ buildings, at 38% and 39% respectively. In contrast, less than 20% of offices in Oxford and Liverpool have an EPC rating of A or B.

It is estimated that there is c.72 million square feet of energy inefficient office space in our regional city centres

space in our regional city centres. Using proprietary CBRE retrofit cost data, it’s estimated the investment required to upgrade energy inefficient office space across regional city centres to EPC A or B is c.£2 billion.

What can brokers do now?

Given government targets for 2035 and 2050, Net Zero is not moving far from the agenda and there is no doubt that energy efficiency improvements will be required to meet them. Savvy brokers are likely to have already spotted the opportunity that this ongoing situation presents in helping clients to:

• Identify existing stock and EPC rating for each commercial property within the portfolio;

• Determine which properties will require improvements to meet upcoming energy efficiency targets;

• Identify the properties where it makes financial sense to implement the improvements, and which might be earmarked for disposal;

• Develop a timeline and costing for improvements and/or disposal, taking into account any necessary finance that might be required;

• Identify the types of finance and/ or lender that may be required to support any property upgrade in the coming years.

What’s next for EPCs?

It is estimated that there is c.72 million square feet of energy inefficient office

In 2021 the government launched a consultation entitled Non-Domestic Private Rented Sector MEES –Implementation of the EPC B Future Target. The consultation proposed milestones leading up to 2030 (EPC C by 2027 and EPC B by 2030 for non-domestic private rented buildings). However, the process stalled at the consultation stage, and the government’s website now lists it as closed, stating: ‘We are analysing your feedback’. We will continue to monitor the situation because any new developments are likely to directly affect commercial property owners and the associated support provided by lenders and brokers.

Always accommodating

Navigating a year of challenges and opportunities in the accommodation-led sector

Scott McKerracher Head of Commercial

Cumberland Building Society

Brokers and finance providers will play a crucial role as they support accommodation-led businesses in navigating what looks to be a mixed outlook for the sector in 2025. While the UK’s hospitality businesses experienced higher room occupancy in 2024 than previous years, bringing it closer to pre-pandemic levels, according to research from VisitBritain, challenges remain.

Challenges ahead

The cost of doing business continues to escalate, with energy prices and operating costs increasing to apply pressure on budgets. This is further compounded by inflation and the cost of living which continues to impact consumer behaviour. The ONS Opinions and Lifestyle survey last August found 60% of adults are spending less on non-essentials, and 44% are shopping around more. The survey coincides with a growing trend among customers who want to see their money stretch further, meaning that businesses must generate valuable experiences which leave lasting impressions.

Staff shortages represent another challenge, with the World Travel & Tourism Council (WTTC) reporting a 15% shortfall in the global tourism workforce in 2023 equating to one in six roles remaining unfilled.

The opportunities

Providers of accommodation-led finance have an important role in helping businesses to navigate challenges and seize present opportunities.

Sustainability is hugely important to travellers, and accommodation-led businesses can capitalise on eco-tourism with green-certified accommodations. Investments in renewable

energy, waste reduction, and sustainable design will also appeal. Meanwhile, expanding offerings to integrate wellness amenities such as mindfulness retreats and nature-based experiences will cater to growing demand for wellness-based tourism from visitors.

Businesses will succeed where they can create memorable stays. Partnering with local businesses and tourism boards to offer curated experiences, such as food tours, can enhance the guest experience while driving a sense of community. Additionally, with guests desiring more personalised experiences, modernising rooms can cater to expectations for comfort, sustainability, and technology integration. However, it’s worth remembering that customers value human interaction, and personal connections will leave visitors more satisfied. Effective consideration of customer expectations will enable businesses in the accommodation-led sector to cater to a diverse range of guests, no matter the reasons for their visit.

As well as building customer relationships, doing the same with employees to ensure they are supported and valued will bolster staff retention, presenting the business as an attractive proposition for those looking to work in the sector.

Brokers and finance providers can support business owners to do this, whether it’s acquiring properties or helping them to build partnerships with local organisations or supporting sustainable initiatives which align with customer values. The coming year presents challenges, but there are huge opportunities too. It’s the role of brokers and finance providers to help those in the accommodation-led sector to seize them.

The coming year presents challenges, but there are huge opportunities too

LOANS

First finance

A growing opportunity for brokers to support start-up businesses

Sean Dennis Managing Director Let’s Do Business Finance

Commercial finance brokers are often a vital first point of contact for entrepreneurs seeking funding for their business dreams. However, the challenges of high-risk lending, time-intensive support, and limited financial reward, often make start-up financing less appealing to brokers.

Despite the growing demand for start-up funding, fewer than 1% of Let’s Do Business Finance’s deals in 2024 came from broker referrals. Community Development Finance Institutions (CDFIs), including us, are working hard to change the situation and recognise there is much to be done building and strengthening relationships with brokers and educating them on the benefits of taking on entrepreneurs and new businesses as clients.

Yes, start-ups often require significant handholding, but they do present a unique opportunity for brokers who are willing to think long-term.

By referring clients to a CDFI, brokers can provide a much-needed lifeline to start-ups that might otherwise struggle to secure funding through more traditional routes. Start-up loans through a CDFI ensure that brokers’ clients can access an attractive product and all the support they may need through the application process. Working this way not only positions brokers as problem-solvers but also lays the groundwork for future collaboration. A start-up that receives its first loan with the support of a broker is far more likely to return for growth financing down the road, creating a potential pipeline of loyal, repeat clients.

As the name suggests, CDFIs typically support businesses in the local community across specific regions. Here at Let’s Do Business Finance, our reach covers both the South East and the East of England.

Lending to start-ups in the South East

For those who are not familiar with the sector, start-up loans of up to £25,000 are available to aspiring entrepreneurs and businesses under three years old to support the launch of their operation. In 2024 we funded 475 loans across the South East with lending totalling an impressive £5,710,295 – that’s an average of just over £12,000 per loan.

With changes in market conditions, a desire for more autonomy and work/life balance, and some instability in the job market, last year we observed a surge in “side hustle” home-based businesses transitioning into full-fledged operations, as well as trading businesses with less than three years of experience moving into permanent premises.

Mobile businesses – such as food trucks or pop-up retail shops – increasingly established physical locations, demonstrating confidence in their growth potential, but a need for capital to support those ambitions.

Interestingly, no particular sector dominated loan applications through us last year. We received interest from a broad spectrum, including professional services, retail, hospitality, and IT. This diversity speaks to the dynamic nature of entrepreneurship, with people from all walks of life chasing business ownership.

For the most part, start-up loans do not fund working capital, instead, they are used for tangible investments that help businesses establish or expand their footprint. Typically, we saw loans used for:

• Securing business premises

• Refurbishment and build-outs (including outhouses at residential properties)

• Purchasing equipment, vehicles, and stock.

Many of these businesses arrive at the doors of a CDFI because they have been turned away by traditional lenders, often due to the high-risk nature of start-up financing. This reality highlights the need for alternative funding solutions and the critical role

brokers can play in connecting entrepreneurs with viable options, and crucially, supporting new businesses at the very start of the journey.

The outlook for financing start-ups

This year, we expect economic conditions, emerging industries, and shifting entrepreneurial motivations will shape the landscape for start-up financing. Anticipated trends include continued growth in sectors such as e-commerce, mobile services, and health and wellness.

E-commerce offers opportunities for start-ups to sell products online with minimal overheads. Mobile services, from pet grooming to food delivery, are likely to expand as consumer demand for convenience grows. Similarly, health and wellness businesses, including fitness studios and holistic therapies, are expected to see increased activity as people prioritise self-care and lifestyle improvements.

When supporting clients with a start-up loan application, we recommend that first, brokers guide clients to improve their credit profile. Once this is achieved, brokers should ensure that clients present a well-thought-out business plan including clear financial projections.

A notable development in late 2024 was the emergence of blended lending. Entrepreneurs often require more than the £25,000 available through the Start Up Loan Scheme. In response, Let’s Do Business Finance and other CDFIs are increasingly combining start-up loans with other funds to create tailored financial solutions. This approach provides an opportunity for brokers to develop client relationships and increase their income from that client.

A start-up that receives its first loan with the support of a broker is far more likely to return for growth financing down the road

Todd Davison Managing Director Purbeck Insurance Services

State of play

Personal guarantees under the spotlight

Personal guarantees can help unlock crucial access to funding for many SMEs, but they also carry significant risks. Here, Todd Davison of Purbeck Insurance Services, puts personal guarantees under the spotlight, sharing how brokers might discuss both the benefits with business owners and what can be done to mitigate the risks.

What trends have you seen in personal guarantee insurance applications in the past year?

Working capital has always been the main reason why small businesses apply for a personal guarantee backed-business loan, but we have noted in the past year that the proportion applying for finance for this reason has grown to its highest level – 38% of loans in Q3 2024 were for this reason.

The other interesting trend we have seen more recently is that loan values have fallen, particularly amongst very young businesses. In our Personal Guarantee Monitor, the average personal guarantee backed loan to a start-up (under two years old) fell in value by 38% year-on-year to £94,265.

Saying all that, application volumes for personal guarantee insurance (PGI) continue to break records each quarter with only a couple of exceptions. There has been a real uptick amongst manufacturers in particular.

In your experience, what does a typical personal guarantor look like?

Looking at our book as a whole, a typical personal guarantor taking insurance from us is 51 years of age, they run a business that is 16 years old, employ 31 people and have signed a personal guarantee of £153,756. To date, 88% of our policyholders have been male, just 12% have been female.

Are there any particular industries where you have witnessed significant growth in taking out personal guarantee insurance?

Definitely. There is a big demand for personal guarantee insurance across construction and manufacturing. We also see a good appetite for PGI from the professional services industry which is currently outperforming many other areas of the commercial sector and driving economic growth in the UK.

Did you notice any changes after the FSB made its Super Complaint to the Financial Ombudsman?

When looking at the loans we have protected that are under £50,000, only a small proportion (7%) were under £10,000.

Generally, there appears to be more awareness of the risks of personal guarantees which can only be a good thing. This seems to be reflected in the fact that applications for personal guarantee insurance are continuing to rise each month

When taking out PGI there are ways to mitigate the risk such as sharing the guarantee with a co-director or guaranteeing part rather than the whole of the loan

Most of the loans we protect (around 76%) are over £50,000 in value, so our experience does not really reflect the lower value loans requiring personal guarantees that the FSB is concerned about. However, generally, there appears to be more awareness of the risks of personal guarantees which can only be a good thing. This seems to be reflected in the fact that applications for personal guarantee insurance are continuing to rise each month.

In September, the Lending Standards Board announced stronger protections for SMEs using personal guarantees. Are you seeing these protections filter through to customers yet?

Yes. This has been a good move; the more that is done to encourage small business owners and directors to seek legal advice before signing a personal guarantee the better and clearly, annual reminders can help to ensure that all parties are cognisant of the guarantee for as long as the loan exists.

While most of the personal guarantee-backed loans we support are for working capital there is still a good proportion of small businesses which take loans to invest and grow. It is these businesses that perhaps stand to benefit from the new protections most. If you are running a successful and viable firm that is on a road to profitability, it is easy to assume the risk of a personal guarantee being called in is minimal. The reality can be quite different.

What should NACFB Member brokers consider when discussing personal guarantee risks with SMEs?

A personal guarantee is not for everyone but quite hard to avoid in SME lending. When taking out PGI there are ways to mitigate the risk such as sharing the guarantee with a co-director or guaranteeing part rather than the whole of the loan. Fundamentally, SMEs should get expert advice before signing on the dotted line. It is also worth bearing in mind that if a guarantor co-own’s their home, their partner will also need to sign the personal guarantee.

If a client wants to think about insurance, protection is available for guarantees for business loans up to the value of £550,000. It is also important to point out that unlike most insurance products, personal guarantee insurance actually helps a business avoid failure and consequently making a claim. So, if businesses do find themselves in financial distress, they must be encouraged to speak to their broker who will work with their personal guarantee insurance provider to offer advice and support. This support extends to the point at which the debt needs to be settled if the business does sadly fail.

Ultimately, we would hope NACFB Members feel able to reassure their clients that they have options and, as long as they understand the risks and mitigation options, should not be put off from taking a loan because there is a personal guarantee attached.

Fuelling financial resilience

How invoice finance has the potential to drive growth in an increasingly cash-pressed economy

Evette Orams Managing Director Hilton-Baird Financial Solutions

Strong cash flow will be critical for businesses of all sizes as they navigate these uncertain times, and invoice finance will have a vital role in helping them achieve that

It is ironic that one of the UK’s most established types of lending should be adversely affected by the pandemic, an event which brought enormous financial challenges to businesses across the country.

Yet this has been the reality for the invoice finance sector, which saw usage decline in the immediate aftermath – largely as a result of businesses’ sales falling and the introduction of the various government-led schemes and initiatives. Within 12 months, the amount of funding being supplied by invoice finance facilities fell by more than a third and the number of invoice finance clients dropped by more than 10%, with lenders allowing clients to hibernate facilities during what became an unprecedented cash-rich phase for many.

Although borrowing has since returned to pre-pandemic levels (UK Finance reported £21.5 billion as at the end of Q3 2024), the profile of the invoice finance sector looks quite different. Clients are now generally larger in size and asset-based

lending – which is typically utilised by larger companies –accounts for a much higher share of overall borrowing than it once did versus traditional invoice finance (factoring and invoice discounting). A number of lenders have adapted their offerings and focus towards the middle or larger end of the market. This appears to be an ongoing trend.

So, might 2025 be the year when client numbers start to increase amongst businesses at the smaller end of the scale? In our view, there are several factors which will determine this.

Cash pressure

The first is demand. There are plenty of signs that the need for invoice finance is growing amongst SMEs, a key indicator being that cash pressure is building amongst that segment (but also wider) once again. While company insolvencies have returned to pre-pandemic levels, Begbies Traynor’s latest Red Flag Alert report (Q3 2024) found that the number of companies facing ‘significant’ financial distress increased by 32% year-on-year.

As cash pressure increases, payment times inevitably lengthen. This has already started to happen according to recent research from Cebr and iwoca, which found the number of B2B suppliers now offering credit terms of at least 60 days has more than doubled since 2020. The cash flow pressure this creates makes invoice finance an increasingly attractive and logical solution for businesses which trade on credit terms.

Second is whether the industry can keep pace with other products. Even before the pandemic, it was clear that invoice finance as a product was not keeping up with newer entrants or similar, reimagined products, in terms of technological innovation and ease of use for clients. Since the pandemic, however, there has been significant investment in this area. Today, we are increasingly seeing new technologies being adopted by lenders, making facilities far more straightforward to operate whilst enabling faster processes and lending decisions. This embrace of evolving technologies, coupled with the human touch, will only serve to further widen its appeal.

The third factor relates to whether the sector can market itself in a better way to resonate with its potential clients. Buyers have evolved, and what once worked and appealed is no longer so relevant and effective, and sometimes only fuels the misconceptions which remain surrounding which businesses benefit from invoice finance. The truth is invoice finance can support businesses at every stage of their lifecycle as well as

when cash becomes tight (irrespective of the reason). Therefore, it’s important intermediaries and lenders work together to highlight the many benefits invoice finance can bring.

Meanwhile, the jargon used needs to be replaced with simpler and more consistent terminology between lenders to improve SME understanding of the various products, their workings and fee structures – which can always be more transparent, especially when it comes to disbursements.

And finally, the elephant in the room: the recent commissions disclosure ruling. In its current form, the ruling has the potential to have a significant (potentially adverse) impact on intermediary-led borrowing, which accounts for a large proportion of the invoice finance sector. Much therefore hinges on the Supreme Court’s decision when the appeal is heard in the coming months. Irrespective of what transpires, it is important to remember the key thing is to do what is right by the sector’s clients.

Renaissance

Although the invoice finance sector has had a challenging few years, economic conditions point to a renaissance that’s fuelled by a growing need and suitability amongst businesses who would benefit from the strong cash flow position products such as factoring and invoice discounting can provide. As intermediaries, we have a central role to play in identifying the signs a business would benefit from invoice finance and providing the information and confidence to explore a solution they may not have previously considered or been aware of.

A strong cash flow will be critical for businesses of all sizes as they navigate these uncertain times, and invoice finance, we’re sure, will have a vital role in helping them achieve that.

The truth is invoice finance can support businesses at every stage of their lifecycle as well as when cash becomes tight

Uncertainty, opportunity and unity

The outlook for UK SMEs and their financing requirements

Michael Mann

Broker Business Development Director Allica Bank

At the end of each year, Allica Bank surveys its network of brokers to get a snapshot of their expectations for the year ahead. 2024’s survey was our largest yet, reaching over 700 commercial mortgage brokers and revealing a fascinating picture of what 2025 could bring. The outlook is a mixed picture with pockets of positivity, plenty of uncertainty and, most of all, an outsized opportunity to add value for clients.

A strong year gone

The first thing to say is that 2024 was good for many brokers. Despite the gloomy outlook and background noise, 62% of brokers reported increased volumes of applications in our summer survey and 70% reported sustained or further growth at the end of the year. After a challenging few years of disruption and uncertainty, this is a welcome bounce back.

Confidence for 2025

Brokers don’t expect the same lofty levels of growth in 2025, but this is as much a reflection of the strength of 2024 as it is a comment on the future.

We asked how confident brokers’ clients are about growth in 2025. 43% told us their clients are ‘somewhat concerned’, 7% are ‘very concerned’, while 18% feel confident about further growth in 2025. Consolidation might be the priority for brokers and SMEs alike.

There are real reasons for optimism, though. With two 0.25 basis point cuts to the base rate in the second half of 2024, and further reductions on the horizon, a more stable interest rate environment could be a boon for brokers and businesses looking to plan ahead.

Of the 30% of brokers in our survey that reported fewer applications last quarter, over half of them cited high interest rates as the reason. For SMEs that have been biding their time before borrowing, the stability of current rates could finally remove this barrier and stimulate greater activity in the market.

A chance for brokers to add real value

The key learning I took from our survey is that there are huge opportunities for brokers to add real value this year. Falling interest rates and key elections now being out the way present a much more stable environment for business owners to invest in.

Come April, increased employer National Insurance contributions will put new pressure on working capital, giving business owners difficult decisions to make. Brokers can make a big impact in helping SMEs offset higher staffing costs by supporting them to refinance onto more affordable lending or unlocking new capital.

This year will be another challenging one, have no doubt about that. But by lenders and brokers working together, we can all do our bit to support the UK’s SMEs and help them to access the finance they need to thrive.

Brokers

can make a big impact in helping SMEs offset higher staffing costs by supporting them to refinance onto more affordable lending or unlocking new capital

investment loans with flexible payment options

Out of the shadows

Bridging, second and equitable charges gaining traction

The CBRE forecasts a 15% increase in investment volumes and its UK Real Estate Market Outlook 2025 report has predicted that economic recovery will gain momentum in 2025, boosted by falling inflation and interest rate cuts.

This is good news at last for landlords who will hopefully have the confidence to start renovating and expanding their portfolios now the outlook is brighter.

Great opportunities for brokers

In turn, this means great opportunities for brokers, particularly those who have bridging finance as part of their arsenal. It’s an appealing option and one that is most definitely gaining traction with the bridging loan market continuing to break records.

According to data from the Bridging Development Lenders Association, the overall size of loan books exceeded £9 billion for the first time in 2024 and though yet to be confirmed at the time of writing, total loan books were anticipated to reach £10.9 billion by the end of the year.

Why the upward trajectory? It’s simple. Bridging is suitable for almost any borrower profile, circumstance and scenario and offers an invaluable solution for borrowers needing fast, flexible funding – all without the need to disrupt existing mortgage agreements.

Given the market forecast, it’s very likely that landlords will now want to access the equity in their existing properties, and bridging loans are a brilliant option should they wish to expand their portfolios, finance renovations or purchase equipment.

Future-proofing properties

ESG requirements including the upcoming minimum energy efficiency standards might also require landlords to future proof their properties with energy efficiency upgrades. A bridging loan can cover this.

There are many bridging lenders in the market right now –and lots of products to choose from – so it pays to be aware of what can be achieved with the right product.

Second and equitable charges

Alongside bridging, second charge loans now make up over 50% of our current lending, as more brokers look to find a solution that allows landlords to borrow against the equity in their properties while keeping existing mortgage arrangements in place. We believe there will be a spike in second charge lending this year, as a viable alternative to first charge mortgages or personal loans, due to the speed they can be arranged, their higher borrowing limits and the fact existing mortgage terms can be preserved, which might have lower interest rates.

Compared to 2023, we have seen an 11% increase on equitable charges (a security interest in a property giving the lender a beneficial interest) being used where second charge loans are not an option. These do not require the main lender’s consent or even notification and borrowers are therefore still able to access the equity in their property.

All are viable alternatives to remortgaging as the sector cautiously steps out of the shadows of the pandemic and onto a firmer footing.

Given the market forecast, it’s very likely that landlords will now want to access the equity in their existing properties

Louis Alexander CEO Somo

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A good exit

Trusted advisers are key to a successful business exit

Kevin Barrett Managing Director, Private & Commercial Banking Arbuthnot Latham

For business owners, exiting their business is one of the most significant transitions they will face. This milestone represents the culmination of years of hard work, sacrifice, and vision. But it is also a deeply personal journey that brings opportunities and challenges.

Our recent study, involving 100 entrepreneurs from across the UK, revealed a crucial insight: trusted advisers are essential for a successful exit. These advisers provide both the technical expertise needed to navigate complex financial and logistical challenges as well as the emotional support entrepreneurs highly value during this transformative process.

It’s important not to underestimate the time and energy needed to navigate the exit process. Trusted advisers can play a pivotal role in easing the stress of exit planning, offering both expert advice and essential emotional support.

Entrepreneurs often find the process overwhelming, particularly during due diligence, where every decision and detail is scrutinised. As one client shared: “Having the right team meant I could focus on the big picture while knowing the details were handled.” Reflecting on this, we recognise the crucial role of the ecosystem of advisers – financial advisers, commercial finance brokers, and banks – who help entrepreneurs achieve successful outcomes.

Commercial finance brokers are instrumental in securing funding to facilitate exits, whether by arranging debt financing for management buyouts, restructuring financial arrangements, or optimising working capital. Working alongside financial

advisers like accountants, who focus on valuations and personal financial goals, and commercial and private banks which provide bespoke long-term financial solutions, these advisers form a seamless system.

Together, we address every aspect of the exit process – ensuring liquidity, aligning the sale with post-exit priorities, and providing the stability entrepreneurs need to confidently transition to the next chapter. In our experience, having your team of advisers in place before starting exit planning is crucial – typically at least two years before an exit. Beyond professional advisers, many entrepreneurs look to peers, family members, and friends for guidance and support. Fellow entrepreneurs who have navigated similar challenges are often seen as valuable resources for practical advice and emotional reassurance. While not typically technical experts, family and friends offer an important sounding board and provide the kind of personal support that helps entrepreneurs stay grounded during the process’s highs and lows. This broader network complements the expertise of professional advisers, creating a robust system that balances technical precision with empathy and trust.

In addition to the importance of trusted advisers, the study uncovers insights into the personal motivations behind exits, from prioritising family and health to achieving legacy goals. It also highlights other challenges entrepreneurs face, such as identity loss and uncertainty in post-exit life and offers strategies for planning the next chapter.

Trusted advisers are essential for a successful exit

Finding your niche

A diverse lending ecosystem offers greater choice for brokers and

borrowers

Ravi Sidhoo Managing Director – Origination Cynergy Bank

TYou can’t be all things to all people, and that applies to banks and lenders

he start of a new year is a fitting time to reflect on the past, as well as looking forward to the exciting opportunities ahead. It’s with that lens that I’ve been considering how much the lending market has changed in the past 10 years – and how it’s shaping up now.

According to Bank of England and British Business Bank data, a decade ago the top five banks accounted for 60% of lending to SMEs (lending to companies with annual turnover up to £25 million), whereas today they account for around 40%. While annual advances to SMEs is broadly similar today as it was ten years ago at just under £60 billion a year, challenger banks have increased their market share by 20% and lend roughly £12 billion more annually to SMEs. Within a decade, those big banks have been disrupted by challengers that used agility, a high-growth mindset and a tech-enabled approach to capture significant shares of the market.

The shift from the high street to online-only challengers is indisputable. In a relatively short space of time, it’s a remarkable movement in the lending market – not just organic growth, but real shifts in market share.

Today those very same challengers are themselves being disrupted by other niche lenders entering the market. There is now an eclectic mix of players, each with different risk appetites and return objectives. This can only be a good thing as lenders must compete for every transaction, it makes the market more vibrant, more competitive and offers brokers and borrowers much more choice.

On the ‘vanilla’ side of the market (that is, sub-£5 million transactions), much of the movement in favour of niche lenders has been down to their tech-enabled offerings, with portals for brokers to enter deals, automated underwriting and no requirement for a banker’s oversight to make a deal happen. On the flip side, it risks a ‘computer says no’ approach to lending and lacks the ability to underwrite and manage complex transactions.

The £5 million-£25 million ‘mid-market’ space is where tech-enabled challenger banks can lead the way due to their complex decision-making abilities, manual bespoke underwriting and a relationship-focused approach, all backed by fintech platform integrations.

Naturally, a shift in focus brings uncertainties, and it is the market – brokers and SMEs – that ultimately determines the success of a new niche. As I look back over the past year and reflect on our strategy to bring focus to the mid-market, it’s clear that the demand from our broker community has confirmed our view: The market is drastically underserved by traditional lenders.

In terms of the numbers, for us the evidence has been striking. A year ago, our average deal size was c.£2 million. Right now, our average deal size is c.£15 million, and this year we want to continue our focus on lending to signature transactions. The market told us that the challenger market had matured and

wanted them to serve more of the medium sized business lending needs – and it’s only by taking a step back to look at how demand for bigger ticket lending has grown, while also understanding where our core competencies and experience lie, that we’ve been able to do so successfully.

It really comes down to one thing: You can’t be all things to all people, and that applies to banks and lenders. You need to understand your USPs and the scale of your market, then choose your niche, rather than spread across the entire value chain – even more so with the increasingly-competitive nature of our industry. For example, while alternative finance lenders have provided significant balance sheet support to the property developer community in recent years, developers are returning to banks for medium- and longer-term support – making development exits a growth area for challengers.

We’re not the only challenger to disrupt the lending market –and I’m sure we won’t be the last – but as the lending ecosystem continues to evolve and lenders shift their focus to their appropriate niches, we will, as an industry, offer even more choice to our customers as we meet the needs of the millions of SMEs in the UK that require funding.

As I move from reflection to anticipation, I can see we’re at a unique point in history; the sands continue to shift, and as the lending market matures it provides more choice and flexibility than ever before. And as we all find our niches and grow together, I’m excited about the future of our industry.

The market is drastically underserved by traditional lenders

Taking care

Lending to care home operators

Phillip Bate Director of Business Banking

Bank UK

With an ageing population, demand for care home spaces across the UK remains strong and is expected to grow over the coming decades. However, a complicated regulatory environment – coupled with financial pressures – means care home operators face a unique set of challenges.

For brokers who may be considering working with clients in this space for the first time, here are some key points to bear in mind.

Reasons for loan requests

One of the most common reasons why care operators seek lending support is to grow their portfolio of homes, but we’re also seeing an increase in requests for funds to invest in retrofitting projects to improve their sustainability credentials. Care home owners recognise the importance of maintaining a warm environment to support the health and wellbeing of their residents, plus the growing cost benefit of a more energy efficient property.

Research by Cushman & Wakefield (Marketbeat Nursing Homes in Europe 2024 report) notes that the energy performance certificate (EPC) rating of a property may affect the price that a care investor is willing to pay. So-called ‘brown discounts’ are sometimes requested for properties with a low EPC rating, reflecting the costs of bringing the building up to a sustainable standard. However, there is often a ‘green premium’ that buyers are willing to pay for care assets that are already highly efficient.

What to look for

When asking about future plans, consider factors such as whether they will maintain the care home’s management

team and what they will put in place to ensure continuity for both staff and residents. What about links to the local community? Given the importance of EPC ratings, have they factored in any work that may be needed to improve the home’s energy efficiency?

The responses to these questions will provide valuable insight on the future stability and economic viability of the home, as well as answering the questions that lenders will pose as you work to secure the finance that works best for your client.

In these challenging economic times, care home operators often struggle to get the financial support they need to achieve their goals, but a lender that shares their values should be more flexible and innovative in structuring a loan that meets their requirements.

The opportunity for brokers

According to the Centre for Ageing Better, the number of people aged 80 and over is set to more than double in the next 40 years, to over six million. Care home operators need support to meet this ever-rising demand and to ensure their homes are sustainable, energy efficient and support resident wellbeing. Finance will play a key role, and therein lies the opportunity for brokers.

There is often a ‘green premium’ that buyers are willing to pay for care assets that are already highly efficient

Triodos

Funding CapEx. Fuelling growth.

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Highlights:

• Loans from £25k – £150k

• Terms from 1 – 5 years

• Supports soft and specialist assets, intangible costs, fit-outs and refurbishments

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*Once approved, if all required info is provided by 12pm

Interested in working with us? Get in touch

FOR INTERMEDIARIES ONLY

Key developments to watch in 2025

The commercial finance landscape never stands still –but commercial finance brokers in our community don’t have to navigate it alone. Here at the NACFB, our expert team is constantly tracking emerging trends, regulatory shifts, and market innovations to ensure our Members stay ahead of the curve. As we look further ahead into 2025, we’ve outlined five key areas worth watching closely, plus a nod to how we’re already tackling them so you can focus on what you do best: supporting your clients.

Consumer Credit Act reforms expected

The ongoing Consumer Credit Act reform process could reshape the jagged regulatory perimeter governing SME finance. Whilst modernising 50-year-old rules is long overdue, poorly defined boundaries risk pulling commercial lending into consumer credit frameworks, imposing unnecessary compliance burdens. As Labour seeks to simplify regulation, reforms will serve as something of a litmus test: can they reduce red tape without undermining our industry’s ability to serve SMEs? We’re actively engaging policymakers to ensure commercial finance retains its distinct regulatory identity and will translate legislative shifts into clear guidance. For brokers, the stakes are clear – preserving agility in a sector where one-size-fits-all rules rarely work. 2

1

Commission disclosure clarity likely

With the Supreme Court expected to rule on commission disclosure obligations by mid-2025, our community faces potential updates to how fees and client consent are managed. Whilst transparency remains paramount, inconsistent guidance could muddy the waters. To ensure Members stay compliant without guesswork, we’ve already developed template documents, collaborated with industry bodies on unified approaches, and mapped out scenario-based guidance. Rest assured, we’ll deliver clear, actionable steps the moment the ruling lands – steering any regulatory uncertainty into business as usual.

3

Streamlining FCA regulatory returns

The FCA’s upcoming changes to data reporting requirements will impact how brokers submit financial and operational insights. Though designed to enhance oversight, adapting to new processes can strain resources. Having already represented Member interests during the FCA’s consultation phase last year, we’re now crafting step-by-step guides and monitoring updates to simplify the final return process. As ever, our aim will be to try and turn regulatory updates from a headache into a seamless part of your workflow.

5

New-look NACFB Expo rolls into town

4

Consumer Duty rolls on...

The FCA’s intensified focus on Consumer Duty means brokers must demonstrate fair value, transparency, and client-centric practices –even in commercial lending. Proactive compliance isn’t optional, but it doesn’t have to be overwhelming. We’re still equipping Members with response templates, fair-value assessment tools, and direct access to regulatory insights. Meanwhile, we’re engaging the FCA to ensure rules remain proportionate for commercial brokers, safeguarding your ability to serve SMEs without unnecessary red tape.

Mark your calendars for Wednesday 11th June 2025: the NACFB’s Commercial Finance Expo returns to Birmingham’s NEC, only this year it has been reimagined as a vibrant metropolis reflecting the energy of UK finance and our growing community. With 150+ exhibitors and 2,000+ delegates expected on the day itself, it isn’t just any old industry event – it’s the jewel in the broker-led lending crown and your annual hub for forging partnerships, spotting trends, and accessing innovations. Search NACFB Expo to secure your place.

Five minutes with

Edward Rixon

Shawbrook Bank – Senior Manager, Growth

What do you like to do to relax?

For me, exercise is the best way to de-stress. I like to go to the gym a few times a week and play tennis when the weather allows.

What was your dream job as a child?

I wanted to be in the army.

What does a perfect day off look like for you?

I’d go to the gym, then to an exhibition at a museum (I’m a history nerd), go to a nice restaurant with my fiancé then off to a wine and jazz bar.

Who is your favourite novel or film character? Are they a hero or a villain?

White Goodman (Ben Stiller) from Dodgeball. He’s a villain but in my view

the funniest film character of all time. Big statement, I know.

Have you checked something off your bucket list? What was it?

Spending three months road tripping through the west coast of America and Canada was an experience I’ll never forget.

If you could speak any language, what would it be?

I can’t speak any other language. Barely mastered my own. I would love to be able to speak Spanish.

What was your first car? Did you name it?

I had a rainbow purple Vauxhall Corsa in my early twenties. Very embarrassing to drive but I was desperate for a car and had a very low budget!

What was your first big splurge?

With my first banking paycheck several years ago I bought a fairly expensive pair of Loake shoes. I still wear the shoes, so they were worth the money!

What was your favourite artist or band when you were at school? What’s your favourite now?

At school, Bloc Party. Now, an Australian metal band called Northlane.

If you have a pet, what is it and what’s its name?

No pets at the moment but I’ll be shortly getting two cats for my birthday. Can’t wait.

What attracted you to work for Shawbrook?

Shawbrook is an organisation that’s willing to push boundaries and be innovative. That has enabled me to drive some really big changes in our proposition over the last couple of years.

What is the best part of your current role?

It’s the empowerment I’m given to make significant changes to our go-to-market proposition.

What is the best work event you have been to? What made it so great?

It has to be the NACFB Commercial Lender Awards 2024! Shawbrook won a number of awards, I met some fantastic people, and the music/food/ entertainment were also excellent.

What professional skills do you think everyone should have?

A ‘can-do’ attitude. Sounds cheesy but if you’re always willing to roll your sleeves up, go the extra mile and be proactive, you can go far.

What was your first job?

I worked at Homebase as a shop assistant at 16. I had no knowledge (and still don’t really) of DIY. I didn’t last long in that job…

What achievement are you proud of?

At Shawbrook I launched a new Unsecured SME Loan to market. Since then, I’ve gradually (and safely) expanded the product to longer terms and higher max loan limits. The product is flying so I’m really happy with how it’s going.

What small thing makes your job easier/better?

My wider team. Full of great people who bring a lot of humour which always helps.