SME lending propels accreditation push

NACFB research shows its members facilitated £38bn in SME lending last year, a 16% drop from 2022’s all-time high of £45bn, which the trade body attributed to uncertain economic conditions and lower lending appetites.

“As banks retreat from the high street, we see brokers filling the void and becoming the equivalent of the modern-day branch manager, someone an SME can turn to act as a funding pathfinder. One of our primary roles as an independent broker-led body is to help our members demonstrate their professional standards to clients and lenders,” Chambers said.

Chambers shared that the NACFB has carried out approaching 2,500 broker reviews since it introduced a form of accreditation nearly a decade ago designed, in his words, to provide “a robust assessment of regulatory adherence across the whole intermediary-led commercial lending”.

NACFB membership figures have been swelling at a rate of 11% per year, with approximately 35% of the current 2,500 members provided some form of service offering in the leasing and asset finance business. Of the 128 Appointed Representatives (ARs) of networks who joined the NACFB in 2023, a quarter (24%) operate in the leasing and asset space.

Chambers describes the assessment process as “putting our arms around the broker”, in a bid to encourage an inclusive approach. Intermediaries are initially required to work through an 80 point-plus checklist. The NACFB maintains a template library of documents available on its website ranging from compliance and data protection statements to a pack covering Consumer Duty, a guide to recent motor finance developments, plus CPD materials, all of which brokers can draw on.

“It’s a remedial partnership, with the aim of reinforcing the consistent implementation of regulatory standards,” Chambers explained.

In return, accredited brokers can display their NACFB certification to SMEs as assurance they adhere to a code of practice and share standardised information with funders outlining that they meet the compliance test requirements of the industry trade body.

Chambers argues any approach to sector-wide accreditation should be viewed as a win/win for all parties. He also outlined that the trade body’s mission is not to segregate but to elevate. Chambers backed an approach that seeks to lift those not meeting the mark to industry best practice, rather than sideline them: “It’s this remedial partnership with brokers that has not only advanced the sector but has also reinforced the crucial importance of regulatory standards,” he noted.

As regulatory pressures grow, with the FCA’s focus on motor finance only the most recent example, so does the demand for an industry-wide consensus on what best practice looks like.

Against this background, Chambers says he broadly welcomes the FLA’s recent announcement of a specific asset finance broker accreditation scheme, noting “that they have a lot of catching up to do”.

“We’re confident in the hard yards we’ve already run. When it comes to intermediated commercial lending, the NACFB stands ten years ahead of the curve. Our track record speaks volumes – no one knows this space better, and no one has been a louder advocate for brokers than we have.”

Asset Finance Connect are launching a unique and important webinar series for the UK asset finance community focusing on how brokers and lenders can collaborate to protect the broker channel for the benefit of its customers.

The first in this new series of webcasts for the UK broker industry will be held on 21st March at 1pm (UK) providing an online analysis of the FLA’s new accreditation scheme for asset finance brokers with a unique opportunity for brokers and lenders to ask their questions direct to the FLA team. Register now at https://www.assetfinanceinternational.com/index.php/994-digital-events/autofinance/23582-new-webcast-series-for-uk-brokers-two-digital-events-covering-the-fla-s-new-accreditation-scheme-and-next-gen-tech-for-brokers