New leasing business has dipped 7 percent over the last year
among leasing broker members of the National Association of
Commercial Finance Brokers (NACFB)
Leasing and asset finance sourced by NACFB lease brokers has
dropped by £88 million ($158.4 million) to £1.11 billion, compared
to £1.2 billion for the same period last year, according to its
survey of brokers’ business from June 2007 to June 2008.
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State Securities, which sources all its work through brokers,
has noticed a clear drop in the quantity and quality of deals
sourced.
Sales director, Andrew Bullard, said: “It’s roughly 30 per cent
less busy.”
According to Bullard, economic causes are behind the decline,
and it shouldn’t last long: “My gut feel is that this is only a
short-term blip, how long that will go on for I’m not quite
sure.”
He continued: “Brokers are certainly the way forward for the UK
finance industry. That’s where the dominant part of the finance
sector will be doing its business and, therefore, what’s happening
to the brokers is a reflection of what’s happening in the market,
but things will turn around.”
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By GlobalDataThe survey also reported a fall in business among other members
of the NACFB, resulting in a total loss of £3.7 billion, dropping
from £19.1 billion to £15.4 billion.
The sectors hit hardest were leasing and asset finance, bridging
and short term finance, vehicle finance, and buy-to-let deals which
suffered a 58.8 percent decrease.
Norman Kenvyn, managing director of leasing at St Helen’s
Finance, a City-based lessor, said that although his company had
witnessed a slight rise in the number of deals, the quality of the
deals, such as the type of assets financed, had not improved as
much as anticipated.
“I think when the banks were gradually cutting their facilities
to SMEs in general, there appeared to be a few more deals on the
horizons because customers have to look to other sources to borrow
money and therefore look to leasing deals, but the quality of the
deals isn’t increasing. There was a slight upturn in the number of
deals, but not in quality,” he said.
Factoring and invoice discounting, however, enjoyed a huge
increase of 276 percent, rising from £182 million to £687 million
during the financial year. Commercial mortgage deals also rose by
16 percent and the NACFB reported membership growth of 9
percent.
Adam Tyler, chief executive of the NACFB, commented: “Leasing
business written by members has dipped lightly. However, we are
looking to recruit more leasing specialists to the Association and
offer more to existing leasing members.”
He added that there are now two members of the NACFB board who
come from a leasing background.
“With their assistance we will look at making sure that all
commercial finance brokers are properly represented by their
Association,” Tyler said.
