Where fortunes can be made

To an expert in placing CCTV deals
in Cornwall, for example, the thought of closing a vendor deal in
the Tyrol with an Austrian funder, or placing a Bulgarian lease
with a Greek bank, might seem patently insane.

But as the lights go out, one by
one, at the broker desks of the blue chips, perhaps there is an
opportunity for some British introducers to look across the sea to
source and place business.

This does not necessarily mean
entering into the potential nightmare world of cross-border leasing
– in the vendor world, for example, there are many suppliers
operating across the continent with large revenues, but with small
enough in-country volumes to have slipped under the radar of De
Lage Landen, Raiffeisen, UniCredit and the like.

When properly approached and
vetted by a broker, however, these suppliers are often snapped up
by the big networks. Also, in addition to vendor programmes, the
generally lower concentration of brokers to funders in Europe –
particularly in newer markets – means less competition to place
individual deals with lenders.

Opportunities for
companies

Oak Leasing, known for finding
deals on the mainland (and indeed as far away as Tahiti), has found
its highly-visited website brings in a lot of Euro business from
asset finance virgins looking for a solid funder.

Meanwhile, Netherlands broker
veteran Frans Jansen, of Leasing Services, has found success in the
past through working as a source of local knowledge for English
firms looking to split commission on placing a European deal.

By teaming up with a European
broker in this way – especially one with a good spread of contacts
among international network heads – a good deal of business can
become available to any outfit that can bring in-depth asset
knowledge to the table.

In Jansen’s experience, this sort
of arrangement is only worthwhile on deals worth more than around
€50,000, using fairly standard products and involving relatively
standard assets – not an option for brokers looking to find funding
for highly-specialised or unusual assets.

But, although such deals can yield
a commission rate of 5 percent split two ways, most such
arrangements will in reality make a lower return, with one British
broker saying 1.5 percent was an average figure.

However, in the eyes of Stephen
Basset, head of the National Association of Commercial Finance
Brokers’s asset finance & leasing division, Euro business for
UK business hunters is still “a lot of hard work for a relatively
low return”.

Aside from the commissions
situation, he cites the unfamiliarity of some European lenders with
standard British lease products and methods, as well as the very
different level of IT system development in many European
territories, as major obstacles to many continental ambitions.

At the moment, it would seem that
an eye for deals across the channel is something that only a
handful of well-connected and substantial brokers can afford to
maintain. It generally offers fairly meagre rewards, despite the
quality of business available, and as yet this has not been
tempting for many.

But as the increasingly
consolidatory legislative climate of the EU allows greater ease in
cross-border business, and IT systems continue to develop (look to
Scandinavia for an example of a well-developed processing culture),
the legwork involved in looking abroad will continue to
decrease.

When an easier borrowing climate
allows more robust commissions into the equation on top of this,
the work/reward balance may well shift to such an extent that UK
brokers of all shapes and sizes begin looking to extend their local
business by several thousand miles.