The Broker market has grown exponentially over the last decade and there is a significant reason for this. It is now 10 years since the start of the credit crunch.
On the 9th of August 2007, The European Central bank and The US Federal Reserve took emergency action and injected $90bn into the financial markets in an attempt to stimulate more lending between the banks. 41 days later the Northern Rock saw the first run on a bank in 150 years, less than a year later we would hear the fall of large multi nationals including Lehman Brothers who filed for bankruptcy.
This was the start of a decade of significant economic hardship both for business and personal individuals. Ten years later and that uncertainty has arisen again in the name of BREXIT. In the wider scheme of things the broker market and the lending market has also seen its fair share of uncertainty. Astronomical fines given to high street banks for mis-selling / misleading of products created a bubble where no advice was given. (Better to be safe than sorry) Advisors were taken off the road or worse made redundant. Head counts were reduced because loans and overdrafts were no longer in demand.
Then came the launch of the first P2P lender which was 2005. The P2P Crowd funding sector has seen rapid growth. In 2014 we saw a spike in the broker market as more experienced Bank managers were leaving there safe and familiar environment to take a calculated gamble on offering a broker service to their clients.
What does this mean for the customer?
In a nutshell, the broker has become the bank manager offering many varied products without being tied to one particular bank and the difference is that they can offer their banking experience along with it. Many business owners know exactly how their business needs to run and what is required to make it work. What they perhaps are lacking is the Commercial Lending knowhow; whether it be writing a business plan or blending a loan deal securing the facility they require. All this can now be done as part of a service agreement agreed from the outset with their broker partner.
The broker market is varied however a good source of material is to go on the NAFCB website this will let you know who is in your area and if they are compliant. Certain Brokers abide by the Principles of business as set out by the FCA.