National aggregator Australian Finance Group
(AFG) has announced the future soft launch of a newly developed SME loan platform.
Called AFG Business, the commercial broking platform was discussed at the aggregator’s financial results on Friday (25 August). Initially to be rolled out for commercial mortgages in the second quarter of 2018, it will later be extended to include asset finance and unsecured finance throughout the rest of FY18.
“We’ll be building an initial panel of up to 10 lenders aimed at the core SME market. There will be simple training and direct accreditation for AFG brokers to help deliver streamlined, efficient business finance solutions,” said chief executive officer David Bailey
Even unexperienced AFG brokers who undertake basic training through the platform will be automatically accredited to write commercial lending, he added.
AFG is also investigating white-label or manufacturing opportunities to leverage this commercial business platform.
The aggregator’s financial results included an increase in residential settlements from $33.8bn to $34.3bn between FY16 and FY17. Its total loan book grew by 11% to $133.3bn which included $126.5bn in residential and $6.8bn in commercial mortgages.
Settlements at AFG Home Loans increased by 38% from $1.9bn to $2.7bn which grew the division’s loan book by 44% from $3.8bn to $5.5bn. Lodgments are also up 50% on July FY17 with AFGHL now used by more than 10,000 retail customers.
Across all its products, AFG currently has a panel of over 45 lenders with more than 3,400 individual products (up from 1,450 in April 2015). This shows the increasing complexity that brokers and customers have to deal with, Bailey said.
“Increased regulatory intervention in the market has driven more complexity in the market which shows a greater need for broker expertise.”
“Another indication of this complexity is the visits to AFG’s Broker HQ Knowledge Base – which is what our brokers use to assess and understand the market at a greater, in-depth level – has increased from around 28,000 a month in 2015 to over 53,000 currently.”
Broker numbers continue to increase, moving from 2,650 on 30 June 2016 to 2,875 a year later.
“Victoria and New South Wales have both experienced strong growth which places us in good stead for the year ahead,” Bailey said of changes in the broker network.
The aggregator also originated more loans from the non-majors with 35% coming in through the smaller banks in Q4 2017, up from 29% in Q4 2016. One in 11 Australian residential mortgages currently come through an AFG broker.
Finally, AFG’s normalised net profit after tax increased by 33%, rising to $30.2m for FY17.