The National Association of Commercial Finance Brokers (NACFB) has successfully reviewed 131 broker agreement forms from lenders over the past year, addressing systemic imbalances in contractual terms that disproportionately burdened brokers. The initiative, spearheaded by a dedicated contract specialist, has led to amendments in 94% of broker agreements, ensuring fairer risk-sharing and clearer obligations across the commercial finance sector.
In 2023, the NACFB introduced a contract review role to tackle growing concerns over opaque and inequitable clauses in broker-lender agreements. These reviews revealed widespread issues, from ambiguous dispute resolution processes to overly punitive liability terms. By collaborating directly with lenders - including 98 existing Patron lenders and 33 new entrants - the NACFB has rewritten or clarified clauses in nearly all agreements reviewed.
The NACFB’s head of compliance, Sarah Cunningham, explained the initiative’s origins: “The NACFB observed how brokers were increasingly bearing risks beyond their control, stifling their ability to serve SMEs effectively. We dedicated specific resource to ensure agreements align with regulatory standards and mutual accountability. Our efforts have not been about diminishing broker responsibilities – more about creating greater fairness and clarity so all parties can thrive.”
“By standardising notice clauses and refining monitoring requirements, the trade body has sought to reduce procedural friction. The NACFB’s model prioritises partnership over confrontation. Lenders receive tailored recommendations to amend terms, with some even adopting the trade body’s own template to pre-empt inequities,” Sarah added.
Jim Higginbotham, NACFB CEO, highlighted the broader impact: “Fair agreements are the foundation of a healthy commercial finance ecosystem. When brokers and lenders share risks transparently, SMEs gain faster access to capital, fuelling economic growth. We’re really proud of this work, it underscores our role as a unifying force - ensuring no party is unfairly disadvantaged.”
“With the Supreme Court ruling on broker commission disclosure and informed consent expected in the first half of the year, commercial lenders will likely look to make further addendums to their introducer agreement. The team will be on hand to review any changes through the appropriate lens to ensure fair and transparent expectations for brokers,” Jim concluded.
Key outcomes
- 94% of annual lender agreements required amendments to ensure greater fairness;
- 5% of lenders adopted the NACFB’s free, pre-approved template agreement, embedding best practices from the outset;
- The top amended clauses focused on data protection, audit processes, complaint resolution, and intellectual property rights - all critical for reducing disputes and regulatory risks.
Any NACFB Patrons looking to utilise the service who have not yet, can contact the trade body’s compliance team for direct support.
