“Lender accreditation can often be the first hurdle a broker faces so you should make specific enquiry about this before you attempt to lodge applications, as the volume of commercial business a broker intends to write with a lender will likely determine if the sometimes onerous accreditation requirements are worth the time and effort. There are some lenders with reasonably simple, even automatic, accreditation processes for commercial lending offering their product training with live applications on the fly,” he said.
When looking for commercial customers, however, Bannister said brokers should first look at their existing database.
“Brokers should mine their CRM to identify clients who already hold commercial property and see if there is an opportunity to refinance it for them, particularly if they have held the property for some time. We often see untapped equity sitting in a customer’s Asset and Liability statement tied to commercial property,” he said.
A deeper look into their CRM may help brokers see potential commercial clients who don’t yet hold commercial property, Bannister suggested.
“The next step would be to look for self-employed clients, and approaching them to see if they are interested in purchasing premises to conduct their business from, possibly even in an SMSF
structure whilst the opportunity remains. This is where brokers can work in well with Financial Plan
ners in providing overall solutions for the client,” he said.
And in looking outside their database, Bannister said brokers can turn to referral relationships to find potential clients.
“In terms of lead generation, apart from the broker’s existing database, which we would recommend brokers start with initially, we would suggest brokers align themselves with complementary partners such as financial planners or accountants who are often a good source of referral for commercial transactions,” he said.
But, perhaps most importantly, Bannister said brokers should start small when engaging in commercial lending for the first time.
“We recommend brokers start with reasonably small non-complex commercial transactions and use lenders who are willing to assist them throughout the process. This is where a close working relationship with a supportive and solutions based lender becomes imperative.”
La Trobe Financial is a credit specialist fund manager with over 60 years’ experience covering $10 billion of institutional and retail investment mandates.
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