Brokers optimistic about 2020
Asset finance brokers are poised for another year of growth in 2020, according to a survey conducted by Investec Asset Finance Group. Despite a year of political uncertainty fuelled by changing Brexit deadlines and general elections, 41% of brokers surveyed said they had increased their business volumes over the last 12 months, compared to 34% in 2018.
The annual survey was completed by over 100 brokers to gain insight into what those working in the industry can expect over the next 12 months, helping Investec to support brokers with their growth ambitions.
Brokers are optimistic that business growth will continue. Of those surveyed, 145 remained confident that business volumes would increase by more than 155, whilst a further 365 of respondents expected business volumes to grow by between 5% and 15% over the next year. Only 11% of brokers believed that business volumes would fall over the next twelve months.
An increased focus on marketing, growth and new hires was frequently cited as the primary reason brokers felt confident that business volumes would increase. Both client relationships and a potential Brexit resolution in 2020 also ranked highly.
Brokers cited market conditions as the biggest challenge looking ahead, with 77% of respondents selecting it. Competition from big banks came second, with 53%. In terms of brokers’ client concerns when looking to secure finance, rates came top, selected by 57% of respondents, with speed of decision second on 23% and clear terms/deal structure third on 20%.
Construction sector leads the way
Focus sectors for brokers looking to grow business in 2020 were construction and transportation and storage, which sharply increased their positions as the number one and two answers in the survey, with construction cited by 68% (2018: 48%) and transportation by 64% (2018: 50%). Production, TMT and leisure also ranked highly for brokers looking to the sectors they believe will drive business growth best in 2020. For the first time the survey included Renewables, which scored well with 26% of brokers saying it would be a focus area, placing it in the top half of the table, above retail, health and finance.
Commenting on the results of the survey, Stuart Hughes, head of broker sales at Investec Asset Finance, said:
“The asset finance sector has shown its resilience in 2019, despite difficult market conditions including uncertainty about the UK’s exit from the EU. What’s also clear is the extent to which asset finance has established itself across the UK economy, in sectors like renewable energy as well as more traditional areas like construction. Brokers are in an optimistic mood as we look ahead to 2020, which will only be enhanced now that we have political clarity at last.”