Exploring Opportunities with Fallen Angels: A Broker’s Perspective



As banks continue to tighten their lending criteria, a window of opportunity is opening for brokers to tap into businesses that were once deemed highly bankable and beyond the reach of most brokerage operations.

In a recent study conducted by Secured Research of nearly 5,000 smaller companies that had previously financed equipment with a bank since 2018, revealing insights surfaced, including:

  • 45% of respondents expressed a preference for equipment vendor options.
  • A surprising 22% indicated they wouldn’t even attempt to apply for bank financing at present.
  • 36% stated they would explore financing options with their bank and at least one alternative non-bank source.
  • Remarkably, almost 70% of respondents showed reluctance to seek funding from their bank currently, underscoring the lingering challenges banks face.

These data points illustrate a compelling opportunity for brokers to step into a void rapidly being vacated by traditional bankers to cater to these credit “fallen angels.”

Who exactly are these “fallen angels”?

According to insights from Secured Research, the sectors rapidly pivoting away from traditional bank financing include:

  • Small Professional Services (Legal, Accounting, Engineering)
  • Multi-Location Restaurants
  • Medical
  • Manufacturing
  • Agriculture

What was once considered off-limits may now represent fertile ground for new business discussions for brokers. Brokers who are positioned to offer a diverse array of capital solutions tailored to unique needs can seize this opportunity without the cumbersome processes typically associated with traditional banking channels. The stage is set for brokers to engage in meaningful conversations and unlock new avenues for business growth.

The opportunity awaits. Are you ready to embrace it?

 

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Terry Mulreany
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Susie Angelucci
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