Commercial finance brokers have reported an increasing number of clients turning to business loans to secure funding.
A survey by Asset Advantage found that 31% of brokers had seen this shift, while 24% said the biggest driver among clients towards business loans was more complex projects that require flexible funding routes.
Nearly two in 10 brokers reported an increase in clients needing support with business acquisition and management buyouts, while 5% of brokers supported more clients in expanding into new markets.
Meanwhile, almost half of commercial finance brokers said they have seen a greater mix of both business loans and asset finance as clients look to fund a broader range of projects.
The survey, which seeks to determine the state of play and changing demands in commercial finance, uncovers the key challenges facing brokers when securing funding for clients, as well as their thoughts on lender appetite and the lending landscape.
Business loans have continued to increase in popularity due to their flexibility, enabling businesses to fund their expansion plans or to support an acquisition or buyout.
Growing project complexity
Philip Knight, credit and risk director at Asset Advantage, said: “Our survey findings certainly mirror what we are seeing on the ground with growing demand for business loans.
“Given the broad growth ambitions of UK SMEs, as well as the climate of the past few years, it’s hardly surprising to hear that projects are becoming more complex. It requires lenders to take a much more holistic view of both the deal and the company to help brokers meet the needs of their clients.”
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.
