The Intermediary – February 2025 - Flipbook - Page 45
SPECIALIST FINANCE
Opinion
Why brokers want
bespoke pricing for
business clients
A
new year is a time for
many of us to make
resolutions, to outline
the things we want to
see in the 12 months
ahead. Brokers are
no different, and have been sharing
their thoughts with us through our
quarterly small to medium enterprise
(SME) Pulse survey about the
developments they would love to see in
2025 which would boost the prospects
for their commercial clients.
It’s no huge surprise that top of the
wishlist for brokers is lower interest
rates. Price is a crucial consideration
for any business considering raising
funds, and the more competitively
priced that funding is, the easier it
will be for the business to make the
sums add up.
The prospects appear positive on
this front. Inflation seems to be more
under control than in recent years,
and that is translating into base rate
reductions. While those cuts may
be taking place more slowly than
anticipated – or perhaps hoped –
pricing for commercial loans looks to
be heading in the right direction.
However, it’s not just pricing that
brokers suggest is key. They also want
to see beer lines of communication
from lenders, being more open
about not only the progress of cases
but also the types of cases that they
can support.
In addition, brokers pointed to
accessibility, calling for lenders
to make it easier for their clients
to secure the funding they need,
for example through more
straightforward processes or relaxed
lending criteria.
This is particularly notable, as
once again, our Pulse survey for Q4
suggested that accessibility is a cause
for concern. While a majority of
brokers report no issues in arranging
finance for their commercial
clients, the proportion of brokers
experiencing problems has increased
consistently over recent surveys,
reaching 33%.
Clearly, if lenders want to win
commercial business and build
stronger relationships with brokers,
it’s crucial to combine competitive
pricing with greater transparency
and flexibility.
Recognising individuality
Another of the factors picked out by
commercial brokers on their wishlist
for 2025 that really stood out to me
was a keenness for bespoke pricing.
I know from my conversations with
our broker panel that the current
approach employed by many lenders
– of cookie-cuer pricing irrespective
of the business case – can lead to
frustrations.
The reality is that each business is
different, with its own circumstances
and needs, and providing what is
essentially an ‘off the peg’ product may
not be best for them.
If the business is to achieve its
ambitions, then it really needs
funding that is actively designed with
them in mind.
It’s something that we believe
in strongly at Atom bank, with
all business borrowers benefiting
from bespoke pricing based on their
circumstances. Brokers also have the
option of obtaining a Quick Quote,
giving the client a decent idea of what
their funding is likely to cost through
our portal.
There is no reason why providing
a more personal service needs to slow
things down, if you have the right
processes in place.
For brokers wishing for a busier
2025, the Pulse survey provides some
DAVID CASTLING
is head of intermediary
distribution at Atom bank
reasons for optimism. Once again, a
majority of brokers reported seeing
demand from their commercial clients
increase, compared with just 5% who
suggested that demand was dropping.
The Budget caused some concerns
among brokers, as their clients
elected to hold off on borrowing plans
over concerns around potential tax
changes, but it would appear that
some are content to push on now.
This increased activity is boosting
the confidence of brokers, too, with
two-thirds stating that they feel
optimistic about their prospects
for 2025.
What lies ahead?
It’s genuinely encouraging to see so
much optimism among commercial
brokers for the future.
Advisers don’t need me to rehash the
challenges that they and their clients
have had to face head-on over recent
years. Understandably, this has meant
that some businesses have held off on
taking the steps which might lead to
growth and expansion down the line.
Nevertheless, our Pulse survey
suggests that a growing number of
businesses have decided that the time
is right to push on – and to raise the
funding required to support that
development.
The ball is now in the lender’s court.
We know that the demand is there,
and that brokers want to build strong,
fruitful relationships with lenders
they can trust. It’s up to the funding
sector to meet that demand, to deliver
not just an eye-catching rate but an
experience to match. ●
February 2025 | The Intermediary
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