A majority of brokers in the asset finance sector believe that in the last year they have lost a substantial amount of business through direct funders approaching customers, according to a survey of 119 brokers from United Trust Bank (UTB).
22% of brokers operating in the asset finance sector said they believed they had lost between £15,000 (19,186.50) and £20,000 in revenue to direct funders in the last year. A further 30% estimated they’d lost £5,000 to £10,000 in revenue and 11% believed the figure to be between £10,000 and £15,000.
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A further 13% suggested they had lost between £2,000 and £5,000, while the remaining 24% estimated they had lost up to £2,000.
Martin Nixon, head of asset finance at United Trust Bank, said; "This research shows how much this trend is hitting broker incomes. £10,000 to £20,000 of revenue lost can be a big problem for a small brokerage and the long term impact on brokers’ businesses can be lasting as well. Customers lost to direct funders can sometimes be very hard to win back."
Nixon said; "The asset finance sector is becoming increasingly competitive with lenders’ direct sales teams now more prominent in the marketplace, and new entrants offering a range of delivery channels. Direct funders in particular are increasingly moving into the small to medium ticket sectors, which has been the traditional home for the majority of brokers over the last few years.
"It is not uncommon now to see prime rates being offered to less than prime borrowers as credit appetite becomes rather more aggressive and rapid growth becomes the priority for many funders. Brokers are subsequently finding it difficult to compete when their customers are approached directly by a funder who will try to price a broker out of a prospective deal.
