The National Association of Commercial Finance Brokers (NACFB) has released its annual impact report, underscoring the essential role of commercial finance brokers in helping SMEs secure funding, bridging regional finance gaps, and fostering innovation in the UK’s financial ecosystem.
According to the report, brokers facilitated nearly three-quarters (£26.5 billion) of the UK’s £38 billion broker-led SME lending market in 2024. Lenders also attributed 67% of their SME portfolios to intermediaries, reinforcing brokers’ central position in commercial finance. The survey was conducted in collaboration with research consultancy Freshminds.
Jim Higginbotham (pictured), CEO of the NACFB, said: “The future belongs to relationship-led lending. With 220 new clients per member and £38 billion in intermediary-led lending last year, 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.”
“In a world of algorithms, brokers prove that relationships matter,” he added. “They’re not just navigating change – they’re redefining the role of the trusted adviser, becoming the modern-day bank manager who blends human insight with market expertise to help drive UK plc forward.”
SHIFTING SME LENDING LANDSCAPE
The NACFB report highlights brokers’ increasing role in diversifying SME funding access. Specialist lenders accounted for 33% of broker-led deals, with challenger banks making up 28%. These trends align closely with data from the British Business Bank, which found that specialist and challenger banks now provide 60% of UK gross commercial lending, surpassing high street banks for the fourth consecutive year.
Brokers’ flexibility in securing finance solutions was evident in the report, with fintech lenders accounting for 2% of deals and community development finance institutions (CDFIs) facilitating 0.5%. Notably, 20% of SMEs that initially faced funding rejections successfully secured finance through NACFB brokers.
A REGIONAL SHIFT IN BROKER-LED LENDING
The report also signals a shift in broker-led lending activity away from London and the South East, which saw declines of 7% and 6% respectively. Meanwhile, the West Midlands and South West gained market share, increasing by 4% and 1%. This trend reflects brokers’ ability to adapt to local economic conditions and unlock opportunities beyond traditional financial hubs.
Brokers’ focus on tailored financial solutions was another key theme. A quarter (25%) of SME clients ended up with financial products different from their initial requests, and 33% of brokers expanded their services in 2024 to meet growing demand. Client loyalty remained strong, with 48% of all leads last year coming from returning customers.
THE EVOLVING ROLE OF BROKERS
Looking ahead, brokers are set to play an even greater role in SME lending. The NACFB report found that 83% of NACFB Patron lenders expanded their broker panels in 2024, while 67% increased their broker-facing teams, now averaging 58 staff per lender. Additionally, 36% of surveyed lenders diversified their product lines to align with broker demand for niche solutions, and 21% now view brokers as strategic partners for scaling sector-specific lending.
Adrian Coles, interim chair of the NACFB, emphasised brokers’ evolving role in the financial landscape. “Commercial finance brokers are the connective tissue of the UK economy. Our role isn’t static – it’s evolving. Whether navigating tighter lender criteria, diversifying product offerings, or championing underserved regions, our community is meeting challenges with professional agility.
“We don’t just facilitate transactions; we help build relationships that turn a ‘no’ into a ‘yes’ for UK SMEs seeking access to finance.”
