Midlands asset finance has recently become one of, if not the first, of the large finance brokers to launch their own online funding platform. This, coupled with the news of NACFB stalwart, Adam Tyler’s announcement, are we witnessing the beginning of the end for traditional leasing brokers?
The Fintech revolution has not only completely changed the lending landscape but has also heavily influenced the old guard.
Leasing brokers, once the alternative finance method of choice for those outside of the banking system, have since been overshadowed by peer-to-peer platforms, challenger banks and lead aggregators. We can ill afford to focus solely on equipment rentals.
The influx of new lenders, short-termers, factoring providers – and even the platforms themselves – has had a hugely beneficial effect on the existing market leaders, not to mention for the SME’s. Business owners have never had so much choice.
Leasing brokers have had to adapt and diversify their offerings or risk becoming stagnant.
Since the arrival of Funding Circle and others, the asset finance sector has increased its product range significantly to include contract hire, HP, factoring, short term loans, pension based lending, cash raising through equity to bridging and commercial mortgages. This trend continues, and is evolving, and the scope and size of the ‘alternative’ lending sector seems never ending.
Where our industry has perhaps been most slow to respond, certainly when it comes to working with the end user directly, has been on the uptake of new technologies.
Websites and portals for re-sellers are all well and good but the future has to be customer facing. We are now seeing the beginning of a trend; traditional leasing providers morphing into the platforms we have seen develop over the last few years.
Technology is, of course, just part of a larger process of remaining relevant.
The level of exposure that the new wave of services has received is unprecedented amongst leasing companies, especially at a national level. Some of this is down to the innovation on display – but being more media savvy wouldn’t hurt us, and it’s where we perhaps trail behind.
As an industry we help contribute vast sums to the economy and support small and large businesses alike through some very difficult trading periods. We have an immense amount of experience and great resources at our disposal. We need to couple this with the positive changes taking place and learn from the world of Fintech.
Hopefully we will continue to see new players enter the fray, on both sides of the fence, however it seems there are two routes for the established faces, either hit critical mass, drive rates down with own book lending and move away from distribution or tread the line of old school broking whilst combing the innovation we have seen from the likes of Funding options, Funding Xchange and ABF.