Nearly 70% of brokers operating in the asset finance sector have a positive outlook for the future, expecting the market to expand over the next three years, according to a survey carried out by United Trust Bank.
In contrast, only 6% think the market will contract and the remaining respondents expect the market to stay about the same.
The lender also found that nearly 60% of brokers expect to see more lenders entering the asset finance sector whilst 20% predict some lenders will fail or withdraw from the market.
When asked what impact the new FCA regulations will have on their businesses an overwhelming 96% of brokers said it would have no change or just a slight change to their business levels. 56% responded that the slight change would just mean more paperwork.
Martin Nixon (pictured), head of asset finance at United Trust Bank, said: “We’ve had a very busy year to date at United Trust Bank and I agree with the majority of brokers who say that there’s further room for the Asset Finance sector to expand.
“The last two years has seen a lot of new funders start up or return to the sector. Whether this trend continues, or whether there may be some consolidation at some point in the medium term will be of great interest to brokers.
It is also good news that the vast majority of brokers appear to have resolved any initial apprehension they may have had over the new FCA regulations and are now pushing their businesses forward within the new framework. In our experience SMEs are continuing to employ asset finance for a wide range of uses because it can be arranged quickly and lenders such as UTB are able to demonstrate a flexible approach to putting together a deal which suits the customer, the broker and the bank.
SMEs are playing a major role in the recovery of the UK economy and they will continue to need funding for growth. Although the high street banks’ appetite for small to medium business lending appears to be slowly returning, asset finance is growing in popularity and I expect the trend to continue for some time to come. However, we must not get complacent, and it is the responsibility of all of us involved in this sector, both brokers and funders alike, to use every opportunity to promote the use of asset finance for SMEs when they are considering their funding options.”
