European lessors more confident and UK brokers exceedingly buoyant as business surges ahead

Expectations on the level of bad debt remain stable and in line with previous surveys, with the majority of participants in the recent Leaseurope/Invigors EMEA European Business Confidence Survey (79%) forecasting that bad debt will remain unchanged over the coming six months.

Similarly, 51% expect no change in margins, although 33% predict that margins will decrease in their organisations, slightly above the percentage recorded in the previous survey. Nonetheless, 62% of respondents anticipate that net profit in their organization will increase over the next six months, while only 17% believe that this will fall.

Over 40% of those surveyed thought that competition from new entrants was more likely in their home market with the percentage of those perceiving new entrants as a competitive threat increasing steadily over the past three surveys. Also expectations of merger and acquisition activity are changing with 41% predicting this will increase over the rest of the year, a marked rise on the 28% recorded in the previous survey.

Overall the latest June findings highlight an overall optimistic outlook for the European leasing business in H2 2015, with most of the survey’s measures maintaining the positive sentiment identified in the previous survey conducted in December 2014.

Commenting on these results, Invigors EMEA Partner Richard Ryan (pictured above) explained: “This latest Business Confidence Survey suggests that 2015 is likely to be another good year for the European leasing industry. Growth is forecast to continue for the remainder of the year, while the balance of opinion on other key performance indicators is generally favourable.

“Nearly 60% of respondents in the June survey are more optimistic about the prospects for their business in the second half of this year, while only 6% thought that their business prospects would worsen.”

Meanwhile business booms for UK brokers

In the UK small business lending via members of the National Association of Commercial Finance brokers (NACFB) has increased 31% to £15.982 billion in the year ended 30 June 2015.

Vehicle finance showed massive growth for the second year running, exceeding £1 billion for the first time since 2008 and setting a new record at £1.244 billion.

Invoice Finance was also up by more than 40%, from last year’s £658 million to a new high of £946 million in 2015.

Leasing and Asset Finance performed very strongly – it reached £4.017 billion, up from £2.721 billion in 2014.

Adam Tyler, chief executive of NACFB (pictured above), said: “Furthermore, lending levels by new types of business finance such as peer-to-peer and crowdfunding continued to rise, from last year’s level of £624 million up to £847 million. This means our brokers are on target to exceed £1 billion in the alternative finance field by this time next year (2016).

“The number of lenders working with us has increased from 45 during the recession to a record 128 lenders in 2015 and total business written by NACFB members has now risen 62% in just two years.”

The NACFB takes its annual broker survey every summer, and 2015’s results show this year’s lending total is more than double the £7 billion that NACFB lenders facilitated during the depths of the financial crisis in 2009. The NACFB is on target to match the pre-recession high of £19.1 billion by this time next year.

Tyler added: “Whilst we have seen a steady increase in Lending throughout the last 12 months this year’s survey has provided us with  expected results, but with a swing towards traditional lending such as commercial mortgages and asset finance.

“The market continues to diversify at an incredible rate and we continue to attract high numbers of new and established lenders who see our brokers as the best and busiest in the industry. This survey data, and the written and verbal feedback we have been getting from our 1500-strong membership, certainly backs up that perception.”

He concluded: “Recent developments such as the acquisition of 140 new brokers from our patrons at Hitachi Capital, coupled with our findSMEfinance website’s inclusion on the final shortlist for the government’s Bank Referral Scheme, are all helping to keep finance flowing through the best channels to the SMEs who need it the most.”