Brokers boost small business lending to £45bn in 2022 – NACFB

Brokers facilitating lending to small businesses has increased by 10% to £45bn in 2022 – up from £40.9bn in 2021, according to the latest annual survey results from the National Association of Commercial Finance Brokers (NACFB), published on 15 February 2023.

The survey found that the average loan size for small businesses grew by 23% to £563,000 last year – this was an increase from £459,000 in 2021 and £391,000 in 2020.

Around 29% of the small businesses funded in this way had been refused capital elsewhere.

NACFB chair Paul Goodman said the association’s “results demonstrate clearly the value of intermediary-led lending to UK PLC” and that “small businesses looking to access finance are often better served by enlisting the support of a commercial broker”.

For commercial lenders that operate both direct and broker-led business models, 70% of their business came via the association’s broker channel last year.

Generating the largest proportion of loan enquiries in 2022 were the property (44%), construction (13%) and manufacturing (9%) industries.

Lenders that view small businesses as “too risky” commonly declined loan applications last year.

“With many lenders withdrawing their high street presence, commercial finance brokers have firmly stepped into the role of the modern day bank manager – but with the added benefit of providing a wider array of funding solutions to their clients,” Goodman added.

NACFB collated data for its report across 2022 - it surveyed 1,100 commercial brokers and 165 commercial lenders from its membership last November. 

‘Source of origination’

Andrew Griffith, economic secretary to the Treasury, added: “We welcome the significant contributions of brokers in connecting small and medium enterprises with lenders, which will support these businesses to grow and thrive.

“Access to finance is vital for the growth and investment plans of British businesses, helping to achieve the prime minister’s pledge to grow the economy and create opportunity across the UK.’’

The NACFB’s findings further revealed that 88% of UK enterprises that borrowed money via an intermediary were driven by growth ambitions – compared to 12% that borrowed for reasons suggesting distressed factors.

Bernie Skivington, head of origination and relationship management, guarantee and wholesale solutions at the British Business Bank, said: “It’s encouraging to see so many businesses securing funding through the NACFB’s network of brokers.

“These broker members are a vital source of origination for many of our delivery partners and we look forward to building on our positive relationship with the NACFB as we work together to facilitate better access to finance for smaller UK businesses.”

NACFB, launched in 1992, is the UK’s largest independent trade body for commercial finance brokers.