With the dawning of the New Year, is the outlook any
brighter for the beleaguered broker? Adam Tyler of the National Association
of Commercial Finance Brokers looks ahead to the next 12

The last year, 2009, was probably one of
the most difficult years ever for brokers across the commercial
finance industry.

Commercial mortgage brokers suffered from a lack of
funding options as lenders tightened their criteria. Leasing
brokers have suffered from an almost complete absence of funders
from their market. At the end of 2009 there was really only one
tier 1 funder still open for business.

Adam Tyler

Vehicle finance brokers were suffering a similar
fate, although there was a time lag of about six months between the
impact on the general leasing market and the specialist vehicle
finance market. Various funders closed their doors to brokers,
citing fears about the quality of business introduced.

Hugely difficult trading conditions have forced
everyone to take a long hard look at the industry as a whole and
the move is towards quality business and a determination that
quantity might not take so much of an upper hand again.

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By GlobalData

As part of this drive to quality, the British
Vehicle Rental and Leasing Association has announced a review to
its broker code of practice to help improve the quality of broker
business. The NACFB reviews its code of practice on an annual basis
to make sure best practice is something which is reinforced among
the membership.

Brokers often face having the finger of blame
pointed at them if the market goes wrong and so it seems to be a
good pre-emptive strike for reputable brokers to put themselves
above the problems by embracing best practice and proving
themselves whiter than white.

Troubled year ahead

So what do the next 12 months hold?
Unfortunately, at least to begin with, I believe the answer is
‘much the same’.

Brokers are a resilient bunch as the past 12 months
have proved. At the time of writing the situation within the
economy, certainly as far as funder liquidity and willingness to
lend among the major players, remains largely unchanged from six
months ago. But looking at the larger economic picture there is
evidence that things are slowly starting to improve.

When the recession (back in the days when we still
called it a ‘credit crunch’) first hit, the impact affected the
residential mortgage market first.

Six months later, commercial mortgage brokers were
feeling the pinch. Six months after that, leasing brokers started
to suffer, and another six months on again, vehicle finance brokers
started to see funders close their doors.

Residential mortgage brokers started to see a
slight improvement in their market at the tail end of last year
and, if the recession retreats the same way it arrived, I am hoping
commercial finance brokers will start to see the gloom lift a
little by the end of the second quarter this year.

The author is chief executive of the