Fred Crawley of Leasing Life asks, “is now the time for UK introducers to venture into unchartered territory on the continent?”

The UK broker market, having developed in part to fill the void left by the decline of branch-based bank sales, relies for the most part on local connections and regional expertise to thrive.

To an expert in placing CCTV deals in Cornwall, for example, the thought of closing a vendor deal in the Tyrol with an Austrian funder, or placing a Bulgarian lease with a Greek bank, might seem patently insane.

But as the lights go out one by one at the broker desks of the blue chips, perhaps there is an opportunity for some British introducers to look across the sea to source and place business.

This does not necessarily mean entering into the potential nightmare world of cross border leasing – in the vendor world, for example, there are many suppliers operating across the continent with large revenues, but with small enough in-country volumes to have slipped under the radar of De Lage Landen, Raiffeisen, UniCredit and the like.

When properly approached and vetted by a broker, however, these suppliers are often snapped up by the big networks. Also, in addition to vendor programmes, the generally lower concentration of brokers to funders in Europe (particularly in newer markets), means less competition to place individual deals with lenders.

Oak Leasing, known for finding deals on the mainland (and indeed as far away as Tahiti), has found its highly-visited website to bring in a lot of Euro business from asset finance virgins looking for a solid funder.

Meanwhile, Netherlands broker veteran Frans Jansen of Leasing Services has found success in the past through working as a source of local knowledge, for English firms looking to split commission on placing a European deal.

By teaming up with a European broker in this way – especially one with a good spread of contacts among international network heads – a good deal of business can become available to any outfit that can bring in-depth asset knowledge to the table.

In Jansen’s experience, this sort of arrangement is only worthwhile on deals worth more than around €50,000, using fairly standard products, and involving relatively standard assets – not an option for brokers looking to find funding for highly specialised or unusual assets.

But although such deals can yield a commission rate of 5 percent split two ways, most such arrangements in reality will make a lower return, with one British broker saying 1.5 percent was an average figure.

In the eyes of Stephen Basset, head of the NACFB asset finance & leasing division, Euro business for UK business hunters is still “A lot of hard work for a relatively low return.” Aside from the commissions situation, he cites the unfamiliarity of some European lenders with standard British lease products and methods, as well as the very different level of IT system development in many European territories, as a major obstacle to many continental ambitions.

At the moment, it would seem that an eye for deals across the channel is something that only a handful of well connected and substantial brokers can afford to maintain, offering fairly meagre rewards despite the quality of business available.

But as the increasingly consolidatory legislative climate of the EU allows greater ease in cross-border business, and IT systems continue to develop (just look at Scandinavia for an example of a well developed processing culture), the legwork involved in looking abroad will continue to decrease.

When an easier borrowing climate allows more robust commissions into the equation on top of this, the work/reward balance may well shift to such an extent that UK brokers of all shapes and sizes look to extend their local business by several thousand miles…

Contributed by: Fred Crawley, Reporter – Leasing Life & Motor Finance