Brokers expect pick up in lending next year

by Gerv Tacadena17 Dec 2020

Commercial and business finance brokers are becoming increasingly optimistic about their business outlook for next year, according to the latest study by FAST.

The study showed that brokers have become less concerned about the negative impacts of the COVID-19 outbreak on their businesses, especially given the signs of economic recovery.

Brendan Wright, FAST CEO, said brokers started seeing demand rebound across industries as restrictions continue to ease and the economy begins to recover in response to fiscal stimulus.

"Mortgage and finance brokers are critical to the flow of finance through the Australian economy and continue to help businesses achieve their goals. With strong fiscal stimulus, record low rates and an easing of social distancing restrictions, brokers and their clients have plenty to be excited about in 2021," he said.

While settlements for commercial and business lending continued to fall during the September quarter, brokers are expecting a pickup in commercial lending in the coming year. According to the study, 49% of brokers are expecting to write more commercial investment property loans over the next six months.

"One of the largest areas of growth expected over the next six months is financing for business growth. Brokers are actively working with SMEs to grow their businesses organically or through acquisitions, a sure sign that there are pockets of strength throughout the Australia’s small business community," Wright said.

Furthermore, brokers are reporting increased demand for commercial investment and owner-occupied commercial property. Wright said the current market conditions are creating an opportunity for business to secure their own premise or purchase an investment property.

"For those businesses for which COVID has been a time of growth, this lower interest rate environment, together with the softening of some segments of the commercial property market, has seen opportunities," he said.