Has the commercial market suffered as much as the residential market?
Yes. It’s a bit more difficult to track because there are no products as such in the commercial market and no specific rates. Dual pricing in the commercial market would have been difficult to spot and impossible to prove.
Only a few months ago the British Bankers’ Association said its members were lending more than ever to small businesses but our members have seen no evidence of this. Leasing brokers who look for finance for equipment rather than property are left with one funder in the prime market and this is one group that is suffering.
Has NACFB membership dropped?
It has fallen by just over a quarter but we have largely maintained our core membership of pure commercial finance brokers. At the end of 2007 residential brokers joined because they were desperate to diversify. Once the recession hit it became impossible to write commercial business unless you were an experienced broker.
A lot of buy-to-let and commercial fraud has been reported, has this tarnished the industry’s reputation?
There’s been a lot of fraud across the board. Unfortunately, desperate times call for desperate measures and when people are desperate there are usually unscrupulous types lurking and waiting to take advantage. We set up the Fraud Intelligence Committee to investigate suspected cases of fraud and have handed evidence to the police.
You’ve recently launched a Commercial Expo – are you shunning the Mortgage Business Expo?
Not at all. The Mortgage Business Expo is a great show and we’re there every year. Although there is some overlap, the markets are different. Commercial finance is not just about mortgages – it includes invoice finance, leasing and asset finance. We wanted a show for commercial brokers.
Do you think mortgage brokers should diversify into commercial mortgages?
If they know what they’re doing, can read a set of accounts and have a good working knowledge of all aspects of commercial finance. The problem is that a business’s funding requirements don’t always start and finish with a commercial mortgage.
An experienced broker can spot where alternative finance might be more appropriate, which is better for clients.
Interview by Natalie Martin