Commercial broking at a crossroad

The commercial finance broking industry stands at a crossroad. Intermediaries have existed for many years but customer loyalty to banks has meant that only a small percentage (about 15%) of commercial mortgage business is written through brokers.

However, customers are becoming more aware that there are other options and we now have the chance to push forward, but we must be cautious. The way the industry turns at this crossroads will advance or set back the commercial broking massively. If we let those whose only objective is to take advantage of the high levels of commission available to get a foothold, customers will soon realise they are being taken for a ride and head back to their bank.

But if we ensure that when customers approach brokers they are given access to the whole commercial market, the reputation of the sector will grow and we may eventually get to the ideal scenario of customers approaching specialist brokers as their first port of call when seeking finance, comfortable in the knowledge that they will receive expert advice and a tailored package.

The key to the future is knowledge and experience. The commercial market holds many pitfalls. The number of lenders and products is vast, the complexity of account- ing information can be mind boggling and with new lenders and products entering the market all the time, the need to keep up with developments is critical.

Intermediaries considering diversifying into the commercial market may not have the time or resources to research the market but this should not frighten them off. The more brokers who make commercial finance available to their clients, the higher profile commercial broking will achieve. And for those who are considering the option, help is at hand.

A number of established commercial finance brokers offer a broking and packaging service to intermediaries, allowing them to offer whole of market access to their clients while avoiding the hassles mentioned above. These specialists will ensure that the client receives optimum terms and the broker gets commission equal to and sometimes better than that they would have received had they approached lenders direct.

Of course, it is important to have some knowledge of the commercial mortgage market. To help gain this knowledge, specialist training organisations provide courses in commercial finance that help brokers gain an understanding of the market they are entering.

The opportunities are there. But we must ensure that we do all we can to lead the industry down the right road and prove to customers that the commercial broking industry is highly professional, effective and a genuine alternative to their bank.