Opportunities for brokers as SMEs are increasingly open to new funding options

Our September 2016 Index shows SME confidence is down - since 2014 SMEs predicting revenue decline have almost doubled (13 to 24 percent), while those predicting increases have halved their growth forecasts (8 to 4 percent).

However, there has been a 30 percent increase in SME owners planning to fund their growth using specialist non-bank lenders, with one in five now indicating their intention to seek specialist non-bank funding.

With business owners cash strapped and time poor (72 percent worry most about cash flow and 55 percent indicated ‘having enough time’ was a factor keeping them up at night) brokers are in a position to make clients aware of credible funding solutions to the traditional overdraft.

Brokers who can provide SMEs with lending solutions that assist their growth are adding real value.

Our broker introducers view debtor finance as more than a short-term tool to ease cash flow pressures for clients - it is a smart growth strategy for both the client and the broker.

Debtor finance offers funding solutions for various stages of the business life-cycle including turnaround, mergers and acquisitions, bank refinancing and startup situations. There is also trade finance to assist import businesses.

With debtor finance, unlike some other new revenue streams, brokers don’t need a deep knowledge of, or qualifications in, this area as most debtor financiers are comfortable to work with a contact name and number and will pay upfront and trailing commissions to referring brokers. It’s just a matter of talking to clients and identifying those who are a good fit to benefit.

At Scottish Pacific, we’ve developed debtor and trade finance solutions over almost three decades.

Growth Index results confirm to us the importance SME owners place on being able to talk direct to funding decision-makers, and on developing the personal relationships (with their funder and broker) that will help them grow their businesses.

For a free copy of the full SME Growth Index results see www.scottishpacific.com/news/research

Peter Langham is chief executive of national working capital solutions specialist Scottish Pacific Business Finance, which handles more than $10 billion of invoices each year, providing funding lines exceeding $800 million. Originally training as an accountant, Peter has more than 30 years’ experience in the debtor finance industry. He has overseen significant growth at Scottish Pacific, which has consistently outperformed the market over the past five years. Scottish Pacific was named by brokers as Best Cash Flow Lender in The Adviser's Non-Bank Lending Awards for 2014, 2015 and 2016. The group was also named Best Trade Finance Provider at the Trade Finance Global Excellence Awards 2015.