All posts by NACFB

Patrons Day 2017 – “An Association built by members, for members”


The second NAFCB Patrons Day took place in London on the 26th September. Following on from last week’s Members Day representatives from 50 NACFB Lenders joined chief executive Graham Toy, managing director Norman Chambers and members of the NACFB board at a forum designed to outline the Association’s progress and look ahead to future development.


The opening words of Chairman Paul Goodman outlined that such days are part of a journey the NACFB is taking in efforts to become “more transparent, inclusive and engaged”. This is a journey that the Association wants to take hand in hand with Members and Lenders alike, and the ideas and feedback received will help shape, steer and structure positive future changes.


Graham Toy used the forum as a platform to discuss key issues face-to-face, and in the Association’s 25th year, roadmap a plan for future growth with the support and understanding of the Lenders our Member brokers engage with.


Patrons collectively recognised the positive changes the NACFB has made in the last 18-months and looked forward to seeing a continuation on the same trajectory. As with the Members Day feedback the week before, Patrons also expressed their desire to have greater clarity of communication from the NACFB and more distinctly tailored messages to each sector. 


Engagement was the word on everyone’s lips, and Graham was eager to relay that improving engagement levels across all channels is top of his priority list. This will take consistent effort on the part of Association to deliver ongoing value and communicate more clearly the mission statement of the NACFB.


The open and frank discourse between the head office team, NACFB board and Patrons offered some lively debate and constructive feedback. When asked what Patrons viewed as a priority for the NACFB it was clear that compliance matters are very much on high on the agenda. Whilst Patrons conduct their own due diligence checks with the brokers they engage with there were further calls for the NACFB to encourage all its Members to be fully compliant ahead of upcoming regulatory changes.


Following roundtable discussions Patrons fed back to the room that there is still demand for more brokers and greater broker education. Educating brokers more thoroughly on the full spectrum of available Lenders and their products, as well as risk appetite awareness is an area where Patrons feel the NACFB can improve.  The commercial finance sector is changing rapidly whilst attracting new talent, it was suggested that the benefits of becoming a broker as a career option should also fall with the NACFB’s remit.


We view the NACFB as an Association built by members for members” offered one Patron echoing the same sentiments from last week’s broker session. But there are key areas where the NACFB can improve; namely in the variety of sponsorship opportunities available, the strategic use of survey data, and enhancing the visibility of the Association across the UK – further decentralising from London.


Vice-Chairman Adrian Coles spoke of the Association’s internal governance structure review. Adrian spoke of an ongoing process and the bid to gain a better grasp of what Patrons want to see from the Association in the future, as well as how board restructuring can benefit an NACFB that is growing in both scale and complexity. An area that was met with enthusiasm was the notion of having greater board diversity, one suggestion put forward by Patrons was to “taper in” specialist board members, creating an opportunity for legal and Patron board representation in the future.


This was only the second Patrons Day in 2017 but similar opportunities will form part of the NACFB’s events calendar in 2018. How can the NACFB work better to help our Patrons? Were you unable to attend and feel like offering your own perspective? Get in touch, the NACFB is not just receptive to feedback on Members and Patrons days – you can reach us any time by contacting any member of our team via phone or email.

When imitation isn’t the sincerest form of flattery


Upon hearing of a spate of fraudulent impersonation attempts in the sector, Norman Chambers, Managing Director at the NACFB examines this rising imitation game and advises on how to protect your business


Last month the fraud prevention body Cifas warned that identity fraud has now reached “epidemic” levels – with almost 500 cases reported every single day in the UK alone.

The first six months of this year saw a record 89,000 cases of identity fraud, which typically involved impersonation in order to steal people’s money, buy items or take out loans or auto insurance in their name.

In the pre-artificial intelligence era, the bread and butter of our businesses relies on people interacting and sharing sensitive information daily. In our world of Commercial Finance Brokering these relationships are nurtured and built over many years, but how can you be sure the person you just received an email from is the same one you saw the day before?

Sadly, cyber-criminals are relentlessly targeting consumers and businesses, and the vast amounts of personal data that is available either online or through data breaches is only making it easier for fraudsters. Financial fraud losses in the UK totalled £768.8m in 2016, up 2% on 2015, according to Financial Fraud Action UK.

Fraudsters need just three pieces of information to steal your identity – and most can be found on Facebook and other social media websites – we must all be alert to this threat and do more to protect personal and business information.

To this end, we have highlighted common scams we think our Commercial Finance Broker members should be mindful of:

  1. Sometimes fraudsters will pose as a boss of a company instructing staff to make a wire transfer into the fraudster’s account. These attempts will often happen on a Friday afternoon pressuring staff to make a quick decision before the weekend begins.
  2. Fraudsters can also pose as the IT services department of a Lender saying they want to make a test transfer – but it is rarely a test. If Lenders ask for such information speak with your familiar contact first before issuing any funds.
  3. Fraudsters claim to be a supplier and ask for outstanding invoices to be paid into a new bank account. If it’s a new bank account that funds will be transferred to, a combination of due diligence and common sense can prevent costly errors.
  4. You and your employees should always be aware of clicking on links within emails. Such phishing scams often containing malware which authorises many small payments to the fraudster’s account.

The NACFB encourages all of its member Brokers to remain vigilant, only issue payments to trusted sources, and if you have even the remotest element of doubt – trust your instincts.

Your NACFB is listening – London Members Day 2017

The first of three NAFCB Members Days took place in London on the 19th September. Representatives from 40 NACFB member firms joined chief executive Graham Toy, managing director Norman Chambers and members of the NACFB board at a forum designed to outline the Association’s progress and look ahead to future development.

This was only the second Members Day in 2017 and precedes similar forums taking place in Birmingham and Manchester in October. These events form part of a journey that the NACFB is taking in efforts to become “more transparent, inclusive and engaged” Chairman Paul Goodman outlined.

The London Members Day therefore provided a platform to discuss key issues face-to-face, and in the Association’s 25th year, roadmap a plan for future growth with the support and understanding of the membership.

The open and frank discourse between the head office team, NACFB board and members provided lively debate and constructive feedback. Some matters could be quickly addressed, such as offering more time at the end of the annual AGM for members to ask questions. Other matters that arose are in the process of being addressed; Members expressed their desire to have a greater clarity of communications from the NACFB and more distinctly tailored messages to each broker sector. To this, the NACFB have brought in a new communications manager who is tasked with helping narrow any messaging gap between the NACFB and its Members whilst increasing engagement levels.

The event provided an opportunity for members to express how they saw the role of the NACFB in relation to their businesses. “The most important thing for me is that the NACFB helps us not to screw up” proposed one member, another saw the role of the Association as “…protecting the broker market, and speaking clearly on behalf of broker members.” The team and board acknowledged that the NACFB needs to more clearly communicate how it benefits brokers whilst rethinking the tone of voice used in correspondence – a kindly reminder that we are, and will remain, a member-driven Association.

With GDPR on the regulatory horizon, compliance matters prompted much discussion among the members. Members agreed that an increasing FCA squeeze is a genuine cause for concern. Norman Chambers addressed these concerns and directed members to the NACFB Compliance Services team and their workshops, specifically designed to help support and advise our broker membership. There are a further ten such NACFB Compliance Services workshops scheduled in 2017, be sure to register your attendance and stay ahead of the regulatory curve.

Vice-Chairman Adrian Coles further developed on the announcement at this year’s CFE that the Association has completed a review of its internal governance structure. Adrian spoke of this ongoing process and the bid to gain a better grasp of what Members would want to see from the Association in the future, as well as how board restructuring can benefit an NACFB that is growing in both scale and complexity. The board is enthusiastic to implement the review findings to form part of a succession plan, new blood and fresh faces bring new ideas and insight to the Association.

How can the NACFB work better to help your business? The team are listening and would welcome your thoughts and feedback at the next Members Day in Birmingham (9th October) and Manchester (24th October). The events are free and you can register online via

The NACFB Blog 8/8/17

As I settle into my new role, my commute from Liverpool St Station to Hamilton House takes me right past Bucklersbury House where I started my career with Barclays forty years ago.

Having spent the following four decades learning the art, science and nuances of commercial lending in all its guises, I am fascinated by the prospect of putting all that experience and knowledge into a role and organisation which plays such a vital role in the provision of commercial lending.

In a changing and uncertain economy there is much to consider and our organisation has to be agile and appropriate to fulfil the needs of our membership. There will inevitably be more changes ahead but I want to make sure that the course we navigate will deliver tangible benefits that will make a valuable contribution to the success of our members and their operations.

I’d like to thank Rob Lankey for his sterling work over the last six months as Interim CEO. There is no doubt in my mind that a significant amount has been a achieved in a comparatively short space of time.

The other call out is the hard work and commitment of the team at Hamilton House. First impressions are often said to be the best and I have seen and heard activity that assures me that this organisation is working hard and professionally for the benefit of the members and patrons, six of whom have submitted articles for this July newsletter.

The depth and breadth of lenders wanting to work with the NACFB remains impressive, and I look forward to working closely with them all in the very near future.


Graham Toy


CFE 2017 – a review

The NACFB’s Commercial Finance Expo set a new record for attendance and exhibitor numbers on Wednesday 21st June.

With 1091 visitors and 884 exhibitors, the total number of attendees reached a total of 1975 people under one roof. We like to think we raised the bar this year and provided a fresh look and feel to the Expo. The feedback we received from brokers and lenders suggests we met our aims.

What value-for-money looks like

How closely do you look at supermarket shelves?

Supermarkets these days have to display a “price per 100g” (or per litre or equivalent) under the unit price of certain goods. It gives the shopper the option of being guided by price, or by value. They can choose what’s important, but the unit price is invariably bigger than the cost-per-weight because I suppose deep down we’d all prefer to judge by price, not value.

Warren Buffet’s famous quote “Price is what you pay, value is what you get” works to disassociate the two nouns. But even after you’ve left the supermarket it’s price, rather than value, that grabs the attention of the buyer.

In part, that’s because price is easy to compare across a range of providers; value is harder to pin down. You can go to an artisan market and pay four pounds fifty for a loaf of bread; its value is defined as much by its location as by anything else. The NACFB regards its membership as something like the artisan loaf, but at a Co-op price. We are now charging an attendance fee for some of our events (specifically, the Compliance ones). This puts us in new territory and sometimes leaves us explaining to our members why we feel the fee constitutes good value. Which we do, because we’ve been independently told that’s the case.

What the FCA makes clear is that shopping by price alone is not smart. To be fully compliant, a broker can’t simply demonstrate that he or she has chosen the cheapest option up front, nor the cheapest in the long term, necessarily. “Best” doesn’t even have to mean “best value” … because loans are not sold by the gram……. Is this loans or loaves?

The Compliance events charge comes about because we’re adding these on top of the usual annual programme. They don’t replace anything we would otherwise have been doing. They’re added on, and as such, the usual events budget won’t cover them. And they’re designed to help our brokers, directly and specifically. We can tell them exactly where they are falling short, by highlighting the most likely areas and checking those first. For example, some require help around Training & Competence and evidencing client outcomes. So you can see that these are being tailored specifically for the need of the Broker.

This is due to something we might call “racehorse in a zoo” syndrome. The kind of person who has a passion for his or her brokering business is unlikely to be creatively inspired, or even satisfied, by sitting down with someone else’s training programme. Or drawing up template documents for events that probably won’t happen. Or reading a 248-page book for what appears to be a tangential qualification … one which your client might not attach any meaning or weight to. If you put an entrepreneurial individual in a repetitive administrative role – even if only for a few hours per week – you won’t get them at their very best. So, they are going to need a nudge, or a focused event, to get it right.

Tailored advice for each broker is key, in exactly the same way as a broker needs to tailor his or her advice to each and every client. This means that when push comes to shove, the good broker will have no choice but to disassociate “price” and “value”. There are days for the value 800g white loaf, and there are days for the hand-baked spelt-and-rye. Whether it’s the NACFB selling a product to a member, or the member sorting out a loan for a customer, the fit is everything.

The NACFB Blog 1/6/17

Two years on from the FCA taking over from the OFT and I am still hearing the same phrases.

Some brokers say, I don’t need to be regulated. I am a Commercial Finance Broker and everything that I do is unregulated; all the products are unregulated.

While its true that most of the products are unregulated, it’s the activity that is regulated. In PERG (2.7.7E) and the FCA’s Definitions, the FCA provides a broad outline for Credit Brokering. This outline makes it clear that anyone effecting an introduction to an individual, which includes sole traders or partnerships of 3 or less for finance, needs to be FCA Regulated. They must hold as a minimum some level of credit brokering permissions.

So, what about the lenders and funders? How well have they adapted to Regulation? Some have opted not to be regulated and when I ask them about that decision, they explain to me that everything they do is unregulated and that all their products are unregulated. That is when I ask them who introduces business to them and what due diligence they undertake. Surely they need to make sure brokers are not trading illegally?

The most common response I receive is that the lender will only lend to limited companies, which means that lending is out of scope. Then we address the hypothetical issue: if an unregulated broker is introducing limited companies to one lender but then introducing regulated deals to another funder, or to a broker who is regulated is this not illegal?

You might not know that here at the NACFB we still receive enquiries from individuals wishing to join as Unregulated Members because all they do is introduce business for limited companies, yet when questioned about their activities it becomes clear they are looking to avoid adhering to the rules of the regulator. Unregulated Brokers having a website that says they can provide lending solutions to SMEs can be misleading.

Take a look also at Invoice Discounting and Factoring Brokers; yes, I know this part of the market is not regulated, but when a sole trader deal is introduced to a funder; you cannot then subsequently introduce the clients banking requirements which includes outstanding loans. Equally the funder should not be accepting this if the broker is not regulated.

We humans are fascinated with trying to bend the rules. How often do footballers try to steal a few extra yards for a throw in when the ball is kicked off? We are now in Wimbledon season where the standards are that players must play in whites but there will still be players pushing the boundaries with different shades of colours in the hope they can get away with it! These acts of rule-flexing are relatively visible. Brokers have less obvious ways of pushing at the boundaries of what is acceptable.

Let’s look at accountants that are not part of Designated Professional Bodies (DPBs); they still believe they can introduce clients who are sole traders and partnerships direct to lenders because that is what they have always done. Well the simple fact is that they can’t do that, because it’s a breach of regulation. They must hold Credit Brokering Permissions and what’s worse some funders continue to accept the business. The same can be argued for surveyors and valuers who are not part of DPBs.

While you’re here on the new website, please have a look around and let us know what you think. A few features you are used to seeing have been hidden away for the short term so we can finish building them.

If you need anything that’s not there, we have an office full of staff who can help and send you what you need or guide you to it. We also have Phase 2 plans, so if you ask us for something that isn’t there, we might be able to make it happen.

Warm regards, Norman Chambers, MD

Five easy pieces: review of March 2017


March was a very interesting month for our industry, and just in case you missed anything we thought we’d pull together a little recap of the five most important changes we saw over the month.

The Controversial Budget…

Hammond’s latest budget was seen by many as an attack on Britain’s entrepreneurs. Perhaps if there was one quote we could use to sum up the general consensus among small business owners it would be that of Mazars’ Tim Davies, who labelled the spring budget as “not a nice budget for SMEs”. Hammond set out plans to increase Class 4 National Insurance contributions for the self-employed from 1% to 10%, whilst also reducing the dividend tax free allowances for small business owners. Not only would these changes increase the tax burden on the self employed, they would also break one of the party’s key manifesto pledges, leading to a substantial amount of criticism from some big names in business…

The Controversial U-Turn on the Controversial Budget…

After coming under fire for breaking Cameron’s “Five-Year Election Promise”, Hammond abandoned his plans, admitting they “breached the spirit of the manifesto”. Like the budget itself, the U-turn split opinion, with a number of back-benchers left embarrassed after vigorously defending the NIC changes. We must now wait until the autumn budget to find out how the Chancellor will fill the 2 Billion-pound void left by the move.

Changes in Our Insurance Cover…

In case you missed the news, we’re now offering unrestricted insurance cover for Peer-to-peer lending. Here’s what our CEO, Paul Goodman, had to say on the changes:

“This makes NACFB’s exclusive cover the only policy in the market specifically designed for commercial finance brokers which covers an unlimited amount of brokered loans with peer-to-peer lenders”

“Peer-to-peer lending is booming and it’s fantastic that our members can now use it as much as they like, safe in the knowledge that they enjoy protection arranged by NACFB Insurance Services.”

 The Rise of the Midlands…

A recent survey from Rightmove showed the East Midlands as having the fastest pace of house price rises in the UK, up by 5.7% year-on-year. The price of property coming to the market in the region is at a record high, breaking through the £200,000 barrier for the first time to £200,620. The West Midlands region has the second highest annual increase with prices up 4.2% and matches the East Midlands’ 2.1% monthly rise.

Rightmove data also demonstrates that two areas have seen asking prices fall compared to last year. In Wales, the average asking price is down 0.6% year-on-year, and in the north east of England asking prices are 1.1% down from last year.

Article 50 Was Triggered…

On 29th March we saw the delivery of Theresa May’s letter to President Donald Tusk, signalling the official triggering of Article 50 and setting the wheels of Brexit in motion. The delivery of the letter was followed shortly after by a statement from Mrs May to the House of Commons, where she stated that now was “the moment for the country to come together”. In terms of what this means for the industry, we’ll start to get more of an idea after June, when negotiations with other EU countries are expected to start.

Membership fees: what is an “RI”? February 2017

Many years ago, the NACFB charged its members according to the size of the company. We did this by counting the number of people actively working for the company, and on top of that, because we had a large number of sole traders, we asked for an indication of the company’s income, and based our fees on a combination of those two elements. It sounds magnificently equitable, given that we have to charge our members something.

Free membership would commit us to surviving on and therefore hiking up Patron fees, and then fielding inevitable accusations of being entirely in the pockets of the big banks, which we are not. Every member of our Board of Directors is an active, practising, committed commercial finance broker.

The trouble was, it was never easy to give a straight answer to the question “What’s the fee?”, so we simplified things. Brokers don’t have to tell us about their income any more. We just want to know how many people work for them – signing deals, advising clients – and we base the fee on that because there is a link between fee income generated and affordability. We also cap it so that we don’t end up quoting telephone-number fees. Now in a sense you might say this is like a tax cut for the rich, but we just don’t feel a broker should be paying the same kind of fees as a lender, so we stop counting employees at fourteen.

There is a hitch here which we have to acknowledge; it would be in the interests of a broker’s bank balance if that broker were to under-report the number of people working for the company, and in a sense we’ve made that easy to do, by treating differently the many types of staff that a broker could employ or work alongside. We use the terms Registered Individuals, Appointed Representatives, and Agents, and as of now, we charge each of them the same sum, in the same way. But as with any newfangled terminology, it’s easy for a broker to say “well, I don’t think of him/her as an Appointed Representative because (insert specific objection here).”

Let me use this space, then, like a little glossary so that we are all literally on the same page.

An employee of a firm who generates income by dealing directly with customers and giving advice will qualify as a Registered Individual. Support staff and deal coordinators will not fall within the definition of a Registered Individual.

A Registered Individual (“RI”) is our own term for an employee of the firm who generates income for the firm by dealing directly with customers and giving advice. Support staff and deal co-ordinators are not RIs.

An Appointed Representative (AR) is different. An AR is an individual (or a firm) who has been appointed by the broker firm to undertake the sale of financial products, or to give advice on financial product to commercial and retail customers. The broker firm will not need to register the AR with the NACFB so long as the AR’s primary activity is neither credit broking nor related to financial services. They must not actively discuss with, nor give advice to, the customer.

An Agent, Franchisee, Associate or Introducer (henceforth brought together under the umbrella term of Agents) is an individual or firm that acts on behalf of the member firm and transacts business through the member firm. They may use the member firm’s trading style or they may instead trade under their own style. Agents will potentially deal directly with the customer, but utilize the funding lines of the member firm. Introducers who fall within the definition above will be treated as agents and need to be registered, but if the Agent is already a member of the NACFB under their own name, they won’t need to be registered again under the member firm. And any party which is not registered with the NACFB must not use the NACFB logo on marketing material.

Anyone who thinks they fall between cracks between any of these definitions should bring it to our attention because the fact that any of these definitions seems to mostly apply to an individual most likely means that we regard it as fair that the member firm in question ought to have this individual reflected in their fee structure.

There is also the small matter of Professional Indemnity Insurance to consider. If a member is telling their insurance provider one thing and us another, that’s not cricket, but the real risk is when someone acts in one role and reports to their insurer that they do something different.

That might undermine their insurance altogether, rendering it invalid. And we think that is too much of a risk for anyone to take.

Second Charge Mortgages from Business Money Feb 2017

Over the past five years, the number of commercial finance lenders in the UK has doubled. It is a relatively easy time to set up as an alternative lender. Ever-lower interest rates are currently inspiring high net worth individuals to think laterally when considering their investment options.

The three things any lender has to arrange are source of funds, means of accessing borrowers, and the interface to bring the two together.

The first of those has become easier of late, and a growing number of people have the technical knowhow to handle the third point. This leaves just the second as a hurdle to trip over.

Some lenders see the NACFB as being a likely conduit, given that we have marketing and overview data on the commercial marketplace. Some of those lenders, furthermore, have a grip only on the third part of the equation, and they ask us whether we can give them any help in organising the second point (where we can help) and the first point (where we can’t). Not only is the process of matching investors with lenders some way outside our remit, but it even starts to look something like a conflict of interest. You can’t be an effective regulator of business if you don’t stand at a certain distance from it.

Finally, once all three criteria have been fulfilled, the lender has to establish itself in a niche or outcompete its rivals in a busy market. More and more, they are targeting niches and that way they retain some control over their own chances of success.

To give you an example, I’ve started hearing the term “blended commercial finance” a bit more often, as one of the funding solutions our brokers might want to offer clients. Running a lead generation site we try to reach out to SMEs and listen to what they want. They never ask about “blended commercial finance”. I’ve never seen the phrase typed into the notes or heard it in the phone calls SMEs make. This does not, of course, mean that it is not one of the possible answers to the question of funding.

It can take multiple properties and multiple lenders to arrive at a satisfactory solution. Business restructuring can also add time pressures. What second charges can do is behave as a facilitating product to make the rest of the deal work. Sometimes a straightforward second charge can provide the solution to a deal that otherwise won’t fit.

Borrowers often have greater available equity in their home, and so there’s more opportunity to raise capital with regulated seconds. We’re aware of fourteen lenders offering second charge products on buy-to-let properties. There are even lenders offering non-status business loans on a second or third charge basis.

Sometimes second charges are being used to make up the shortfall when the primary restructure can’t raise the full amount required. Without the extra cash raised by the second charge, the overall deal would simply fail. Our brokers report that they are working with clients who are raising capital via a second charge loan secured on a residential or buy-to-let property for deposits on a new buy-to-let, business expansion, to settle tax bills or to repay other business debts.

A second charge bridge may work out far cheaper than taking out the existing first charge, and if affordability is not an issue, the borrower might usefully consider a second charge term loan instead. That way, they will get far higher LTVs. And not all lenders charge early repayment charges on unregulated loans.

Blended commercial finance is on offer from more than one of last year’s new intake of patrons, and each of them touts itself as an expert in the field. When new lenders’ lending strategies fail to extend much beyond “middle man”, we don’t sign them up. The middle-man strategy is short termism. It may work fine for a few months, but we ask them where their investors are coming from in 2018, or how well set up they are to deal with defaulters, or just borrowers with questions, and they don’t know.

It is simply not enough for a new lender to have a contact book full of high net worth individuals, and a little website-building skill.

The most recent changes to the market have been in the emergence of FinTech – a term that embraces any attempt to interpose user-facing technology between the client and the lender. By its nature, Fintech makes it easier for a borrower to bypass the services of a broker, and by doing so, potentially removes a source of advice and expertise from the funding process. And of course, as a trade body representing commercial brokers, we are wary of the effect such a trend would have.

This has all happened sufficiently fast that the FCA admits it is having to work hard to keep up with the pace of change it anticipates in 2017, because it’s possible to read current regulations and construct a lending strategy that falls outside of them.