Asset finance brokers are overwhelmingly positive on their prospects for growth over the next year, according to a survey conducted by Investec Asset Finance Group.
Of the brokers surveyed, 23pct of respondents expected business volumes to increase by more than 15pct and a further 40pct expect volumes to increase by between 5 and 15 pct. Only 6pct of the respondents expected business volumes to decrease over the next year.
The in-depth analysis is based on a survey of more than one hundred UK asset finance brokers. The results shed light on what those working in the industry expect over the next 12 months, helping Investec to support brokers with their growth ambitions.
When asked how they would achieve their growth targets, the majority (57pct) said that they would expand into new sectors, with potential targets including the fitness industry, recycling and data centre equipment. Industry data supports this trend, as FLA research from Q2 2018 showed that certain sectors had outperformed the market significantly: IT equipment finance grew by 15pct for example, while plant and machinery finance remained flat and business equipment finance volumes shrunk by 2pct.
Furthermore, 37pct expected to shift towards different products, including specialist loans such as VAT finance or those with more complex structures, and many of the finance brokers surveyed were looking at writing more deals with hard assets – an area where Investec has been increasingly active.
Brokers were asked what they saw as the risks to growth. The majority (57pct) pointed to increasing competition in the markets, noting that an overcrowded market was causing difficulties for both lenders and brokers. Downward pressure on prices because of this competition was cited by many. Some named new lenders as a threat whilst others were more concerned about larger banks entering the market.
Economic uncertainty featured very strongly in the feedback, particularly Brexit, and some brokers had noted that clients were still deferring purchases due to the perceived additional risks hurting growth.
Commenting on the findings of the survey, Stuart Hughes, Head of IAF Broker Sales at Investec, said, “It is a good time to be in asset finance – and despite some obstacles ahead, it’s reassuring to see that brokers remain confident that they have what it takes to grow despite an uncertain economy. We remain committed to helping brokers grow in a sustainable way, and although brokers are aware of the challenges that the future holds, there are clearly opportunities for good brokers to flourish over the year ahead.”
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