The National Association of Commercial Finance Brokers (NACFB) has released new research highlighting the pivotal role brokers play in the UK’s SME lending market. According to the study, brokers facilitate nearly £26.5 billion of the total £38 billion in SME lending, representing approximately 67% of commercial lenders’ portfolios.
Brokers are increasingly recognized for diversifying access to SME funding. The data reveals that 33% of deals are managed by specialist lenders, while 28% are handled by challenger banks. This trend is mirrored by findings from the British Business Bank, which reports that challenger and specialist banks now account for 60% of UK commercial lending, surpassing the big five high street banks for the fourth consecutive year. Brokers have proven instrumental in tapping into a broad ecosystem of lenders, ranging from emerging fintechs (2%) to Community Development Finance Institutions (CDFIs) (0.5%), to secure vital funding for clients. Notably, 20% of SMEs managed to obtain funding through NACFB brokers after being initially turned away.
The survey also underscores brokers’ focus on providing customized solutions, with 25% of SME clients receiving alternative financial products to those originally requested. Reflecting growing demand, 33% of brokers expanded their services in 2024. Loyalty remains a key aspect of the broker-client relationship, with 48% of all broker leads last year coming from repeat clients, demonstrating the trust built during challenging economic times.
A notable shift in broker-led lending was observed in the 2024 data, with a decline in market share for London and the South East (-7% and -6%, respectively). In contrast, the West Midlands and South West saw growth (+4% and +1%), highlighting brokers’ ability to respond dynamically to regional economic shifts and seize opportunities outside traditional financial hubs.
Looking to the future, brokers are set to strengthen their influence as commercial lenders invest further in broker channels. According to the NACFB survey, 83% of Patron lenders expanded their broker panels in 2024, and 67% increased their broker-facing teams, with an average of 58 staff per lender. More than a third (36%) of lenders diversified their product lines to meet broker demand for niche solutions, while 21% now view brokers as key partners for scaling sector-specific lending.
Jim Higginbotham, CEO of the NACFB, emphasized the growing importance of relationship-driven lending. “Brokers should not just be seen as intermediaries – they’re growth partners. Their ability to match SMEs with the right solutions is why two-thirds of commercial lender portfolios flow through brokers.”
Adrian Coles, the NACFB’s interim Chair and a finance broker, added, “Commercial finance brokers are the connective tissue of the UK economy. Our role is evolving, meeting challenges with professional agility and helping UK SMEs turn a ‘no’ into a ‘yes’ when accessing finance.”
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