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Brendan Wright, CEO at FAST highlights the opportunities that SMEs can bring to brokers and offers some top tips to win their business.
In March this year, the Scottish Pacific SME Growth Index showed that 58% of SMEs are in a positive growth mode. It’s an encouraging sign for all brokers looking to service SMEs as these businesses will be undoubtedly be looking for financing to support their growth aspirations.
An additional opportunity was also revealed by the index - the majority of SME respondents are still not making use of the broad range of commercial finance options available to them. For example, two-thirds of small business leaders said that they dip into their own pockets (often using personal credit cards) to fund growth, with almost one in five doing this regularly.
FAST has been focusing on the SME market for some time now, and our number one priority is supporting our brokers to cater to their needs. With over two million SMEs out there today, it’s a sizeable market and as the survey reveals, it’s largely an underserviced market, they are clearly in need of the tailored support and service that brokers can provide.
As any broker who writes business loans will know, SMEs certainly don’t need to feel constrained when it comes to accessing finance, funding growth and managing cash flow. There are many solutions available for them. SMEs are however, largely unaware of the financing options available to them, and anyone who can help them navigate these difficulties, is going to be exceptionally well-received.
Small businesses are showing a greater willingness to look beyond their main bank to fund growth. An alternate bank or specialist non-bank provider to fund their business growth. And as SMEs broaden their horizons and realise the wider range of options available to them, they’re also more likely to open up to the opportunity that brokers offer.
Usually accounting for a substantial chunk of a broker’s existing database – anywhere between 10-30 per cent – SMEs are an opportunity well within reach. And by building out your business to cater to their needs, you’ll not only be broadening your opportunities to earn revenue, you’ll be helping our small business community.
Brendan’s top tips for capturing SME businesses
- Take one step at a time – you can capture the SME market gradually. Think about referral models to help you get familiar with asset finance and commercial loans before taking these services in-house.
- Engage – there’s a strong chance as many as 1 in 3 of your client are small business owners. Make sure you are capturing this sort of information at each client meeting and identify ways you can help them with their business needs.
- Look at the big picture – make sure you are aware of the pockets of growth in the market place and take the training steps to allow you to advance your skills in some new areas of your business.
Brendan Wright will continue to help brokers across the country learn how to unlock their potential in this blog series.
