Leading aggregator Vow Financial has reported significant growth in its commercial lending arm, with Vow’s head of commercial and leasing saying it will continue to be a prosperous space.
Vow Commercial and Leasing has recorded growth of 35% year-on-year, the aggregator announced at its second annual Commercial Conference this week.
Speaking to Australian Broker
, head of Vow Commercial and Leasing, Glenn Mitchell, said growth has been driven by more choice and competition in the market for brokers to access.
“What I’m seeing is there are more lenders coming into the broker market in particular. I can think of three just off the top of my head that have set up channels in their business to support brokers in the last six months. That means they are making a firm commitment that this is a part of the business they want to grow,” Mitchell said.
According to Mitchell, lenders have witnessed the success the third party channel on the residential side, and now want to leverage that same success in commercial lending.
“Now, because the brokers obviously drive the residential side – with market share into the mid-50s now – the lenders have sat back and are looking at their slice of the pie and where their getting it from and how they can access that,” he told Australian Broker
“There’s a great opportunity for them to tap into the brokers that are keen in this space.”
But Mitchell said the construction and development section of the commercial market will continue to be a challenge, despite the increased activity and focus on commercial lending.
“At our annual conference late last week and all of our 18 lenders on our panel raised concerns around construction development. A lot of the lenders have all seemed to have looked at their risk appetite and it seems to be a concern for a number of brokers because it restricts the developers being able to access funding at the higher end,” he told Australian Broker
“I have found that just in the last month the risk appetite by certainly the four majors have had a dramatic change.”