Commercial finance brokers are experiencing a notable increase in client demands for more intricate projects, according to the latest survey data from Asset Advantage.
Nearly a third of brokers reported a rise in funding requests for soft or challenging assets, while 29% noted an increase in projects involving businesses with negative balance sheets but compelling backstories. Over a third of brokers also indicated growing demand for projects that require a combination of asset finance and more bespoke funding solutions.
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The survey highlighted that nearly 40% of brokers feel funders only occasionally look beyond the deal to assess the broader business context. Almost a third of respondents believe that funders fail to consider the full story behind more complex transactions.
One broker referred to the lack of “story book” funders, commenting: “Many funders are focused on high-volume sectors like the motor industry and lack the resources or motivation to consider deals that require an unconventional approach.”
The findings come from a survey conducted by Asset Advantage, a provider of business finance for small and medium-sized enterprises (SMEs) in the UK. The survey explored the evolving demands of the commercial finance market and the challenges brokers face in securing funding, along with insights into lenders’ appetite for risk.
Philip Knight, credit and risk director at Asset Advantage, commented on the findings: “Client demands are becoming more complex, while larger, mainstream lenders appear to be tightening their lending policies. We continue to see examples of ‘story’ deals where the credit risk is low, but certain aspects of the transaction do not fit within the rigid frameworks used by these lenders.
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By GlobalDataAsset Advantage conducted the survey as part of its 10-year celebration of offering business loans, typically used for acquisitions, management buy-outs (MBOs), and buy-ins (MBIs), as well as for financing assets such as equipment, technology, and refurbishments.
“While it may not always be feasible for larger funders, there is a clear market need to go beyond the headline figures and fully assess both the deal and the business. This has been our niche—understanding the full story behind a proposal to overcome barriers that might deter traditional funders. Our flexible approach allows us to consider a wide range of sectors and assets.”
