The light at the end of the tunnel is that this increase will affect the tied agent brokers much more than it will the ‘whole of market’ specialists who have access to many lending institutions and who work hard to fully assess a case’s requirements and place it appropriately.
While the current situation in the market will have an effect on lenders across the board, it should also reiterate to borrowers the importance of dealing with a specialist who can fully analyse their financial information and ensure they optimise the terms available to them.
Too many brokers have entered the commercial market with little knowledge and reaped the rewards of high commissions for no real work. These developments will leave these opportunists with a major headache.
The products from the few lenders they process for are not as competitive and they have few other lender contacts and no real ability to analyse a commercial application if anything more than ticking boxes is necessary.
Lending will go back to the days of analysing the strengths and weaknesses of a deal and setting margins on an individual case basis. The importance of working hard for your client to obtain the best terms has never been greater and this is something that the tied agent brokers have neither the ability nor the inclination to do.
Tough times lie ahead, but if this blip also assists in improving the quality of commercial broking then maybe every cloud does have a silver lining.
John Ford
Director
Mustard Commercial Finance Ltd
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