A poll conducted at the NACFB Commercial Finance Expo today (14th June 2023) found that 91.3% of broker respondents have seen a drop in commercial finance lending appetite from high street banks.
The poll was taken during a panel debate, titled ‘Is the power of high street lenders waning?’.
In response, James Holian, managing director, business banking and international retail at NatWest, said: “NatWest has registered no change in lending appetites, and this is consistent across the major banks.”
However, he suggested that what was being seen as a change in willingness to lend was actually a shifting approach to affordability in the current market environment.
Roger Fenwick, director, trading business finance at Mantra Group, said: “The high street lenders would never say they’re not open for business, but when you look at the actual lending, it’s clear that some are essentially not open.”
When asked whether high street banking was a decreasing power in the market, Holian said that this was a matter of normal waxing and waning.
He added that NatWest had in fact seen its lending increase in the commercial finance sector by approximately 20%.
Charissa Chang, head of sales, commercial mortgages at Allica Bank, said: “There is space for all in this market but there has been a shift to challengers and specialist lenders, as high street banks – rightly – have taken steps back to stabilise.”
Chang added that the shift was also the result of customers becoming more aware of the alternative options, and that while the high street was able to benefit in areas such as cost of funds, there was space in the market for challengers able to be more nimble from a lending perspective.
Fenwick said that high street banks were also able to provide a broader product range compared with many challengers and specialists.
He added that with the market as it is, challengers would have to keep growing, while the high street would need to focus on making it easier for customers to borrow.
Fenwick said: “High street banks can be more difficult to deal with from a lending perspective, and getting the customer what they want.
“What lenders are looking for has become more of a grey area, driven by economic uncertainty and instability in the market.”
