Commercial and leasing will be the biggest opportunity for brokers in 2016, the chief executive of leading aggregator Vow Financial has said.
Speaking to Australian Broker
about the moderating property market as 2015 begins to wrap up, the chief executive officer of Vow, Tim Brown, said brokers should look to diversify into commercial lending.
“I think commercial and leasing will the biggest opportunities for brokers [in 2016]. At least three or four out of every ten clients the average broker will deal with will be self-employed,” Brown said.
“Financing their car or their equipment and leasing are the obvious ones, but to add to that, the self-employed can potentially have an overdraft or some sort of cash flow challenge at different times – and these are great opportunities for a broker to sit down and help them with that.”
In September last year, Vow appointed Glenn Mitchell to fill the newly created position of head of commercial and leasing, in its commitment to invest in its commercial arm. Since then, according to Brown, the aggregator’s commercial arm has seen growth of 35%.
“We feel that growth will also double over the next 12 months as the focus moves away from residential and into the commercial space,” Brown told Australian Broker
According to Brown, most brokers currently only refer to its commercial arm – and while he expects that to grow, he also says he expects more brokers wanting to upskill in commercial lending and do it themselves.
“Most brokers at this stage are happy to refer but what I think they will find is that as more opportunities present themselves, then they start to want to learn a little bit more about the commercial side of business,” he said.
“I have no doubt we will see growth in this space and growth in brokers wanting to actually do it themselves.”
Vow offers intensive commercial training and development programs for brokers who would like to learn commercial lending.
“It is not difficult to learn it but you have got to make the time. A lot of the skills you use in residential are transferable to commercial but you also have to understand cash flow, balance sheets and depreciation, which are all important aspects of commercial lending,” Brown told Australian Broker