NACFB report highlights increasing lender reliance on intermediaries
Commercial finance brokers played a significant role in supporting small and medium-sized enterprises (SMEs) across the UK, the National Association of Commercial Finance Brokers (NACFB) has revealed in its annual impact report.
According to the report’s findings, NACFB broker members facilitated £26.5 billion in SME lending in 2023, accounting for nearly three-quarters of the £38 billion broker-led market. On average, lenders attributed 67% of their SME portfolios to intermediary-led lending.
“The future belongs to relationship-led lending,” said Jim Higginbotham (pictured), NACFB chief executive. “With 220 new clients per member and £38 billion in intermediary-led lending last year, brokers should not just be seen as intermediaries – they’re growth partners.”
Higginbotham emphasised that brokers are playing an increasingly advisory role in the market. “In a world of algorithms, brokers prove that relationships matter,” he said. “They’re not just navigating change – they’re redefining the role of the trusted advisor.”
The report also highlights the diversification of SME funding sources. Specialist lenders facilitated 33% of broker-led deals, while challenger banks accounted for 28%. This trend aligns with the British Business Bank’s latest data, which shows that challenger and specialist banks now represent 60% of the UK’s gross commercial lending, surpassing the five major high street banks for the fourth year in a row.
Alternative finance is also becoming more prominent, with brokers securing funding for 20% of SMEs that had previously been rejected for finance. The report notes that fintech lenders accounted for 2% of broker-led deals, while community development finance institutions (CDFIs) represented 0.5%.
Brokers also played a role in matching businesses with alternative financial products. According to the data, 25% of SME clients secured a different type of finance than they initially sought. In response to changing demand, 33% of brokers expanded their service offerings in 2024. Repeat business remained strong, with 48% of broker leads coming from returning clients.
Regionally, broker-led lending saw shifts away from London and the South East, which experienced declines of 7% and 6%, respectively. Meanwhile, lending activity grew in the West Midlands (+4%) and South West (+1%), reflecting brokers’ adaptability to evolving economic conditions outside traditional financial hubs.
The NACFB recently reported progress in improving broker-lender agreements. Over the past year, the organisation reviewed 131 broker contracts, leading to changes in 94% of cases to establish fairer terms. The review, introduced in 2023, was led by a contract specialist to address concerns over unclear or one-sided terms that placed disproportionate risks on brokers.
Looking ahead, commercial lenders appear to be increasing their reliance on brokers. The report found that 83% of NACFB Patron lenders expanded broker panels in 2024, while 67% grew their broker-facing teams, which now average 58 staff per lender. Additionally, 36% of surveyed lenders introduced new products to align with brokers’ demand for niche solutions, and 21% view brokers as strategic partners in expanding sector-specific lending.
“Commercial finance brokers are the connective tissue of the UK economy,” said NACFB interim chair Adrian Coles. “Our role isn’t static – it’s evolving. Whether navigating tighter lender criteria, diversifying product offerings, or championing underserved regions, our community is meeting challenges with professional agility.”
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