Commercial finance brokers and their role in the CBILS Dear Chancellor, The National Association of Commercial Finance Brokers (NACFB) continues to provide market feedback on behalf of commercial brokers with the British Business Bank, UK Finance and HM Treasury. Whilst the Association is supportive of the CBILS arrangement, we have identified three key areas that we feel, if addressed, would increase the chances of the initiative having the desired effect: •
We encourage the Treasury to do more to promote the intermediary-led route to market. This would alleviate pressure and fast-track quality applications. Under-resourced CBILS accredited lenders are being inundated with business finance applications. The commercial broker community is best placed to help triage these applications by ensuring that each application is met with professional guidance and sector expertise before a funding enquiry is made.
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The scheme should be extended to include more alternative and non-bank lenders. Currently the scheme is open to the relatively small number of lenders that were already authorised under the existing Enterprise Finance Guarantee (EFG) scheme, some of whom do not even lend to businesses. Without access to the liquidity provided through CBILS, many lenders will not have the ability to lend in this market - some may even be forced to exit altogether.
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The Government should work alongside the valuation and surveying communities to seek alternative measures to help secure the necessary assessments that will otherwise stall SME finance applications. The stalling of valuers and valuations will cause a backlog of applications waiting to be authorised. The valuation forms a core component of any commercial finance deal. Social distancing measures have meant that few, if any, in-person valuations are currently being undertaken. Alternative ways need to be found.
Our trade body consists of a 2000-strong membership of commercial finance experts, responsible for originating nearly £15 billion worth of funding last year alone. They remain ready and able for virtual deployment in support of SMEs stricken by the impact of COVID-19. The NACFB holds a unique vantage point. Over the last 28-years, our sole remit has been to foster engagement and dialogue between UK commercial lenders and their intermediary counterparts. As such, we are well placed to spot potential challenges the CBILS initiative may face. We believe the issues outlined above will severely impact the placing of credit to those businesses that need it the most. We would urge you to review and assess our considerations. We want to work with you to help accelerate funding applications, ensuring British businesses receive the right finance, in the right areas, at the right time. Yours sincerely,
Paul Goodman
Graham Toy
Chair, NACFB
CEO, NACFB