Lender creates commercial training for resi brokers

by Madison Utley12 Jul 2019

Next month, a non-bank lender is launching training to help mortgage brokers transfer commercial knowledge into actionable strategies for engaging customers and growing their businesses.

According to Pepper Money's newly appointed head of commercial, Malcolm Withers, interest is strong.

“There’s been a lot of interest, especially from brokers who are wanting to have better, deeper conversations with customers. In a lot of cases, they understand commercial in what it is, but they don’t know how to start the conversation.”

The training is a natural extension of the commercial lending division as a whole, launched earlier this year, and structured to feel familiar and approachable to mortgage brokers.

“We wanted to ensure that brokers who wanted to come into commercial had a set of products, processes and systems that looked and felt like a home loan process, that was simple and easy to work with,” said Withers.

Pepper embraced technology to further set itself apart from other commercial lenders in the market by approving loans in as quickly as three days, as opposed to the banks, which often take more than a week before even getting to a file.   

Decreasing friction and delivering faster outcomes is key to drawing brokers in who are on the fence about diversifying - a cause that Withers champions.

“I’m a big believer that all brokers should offer commercial and make their customers aware that they have it available,” he said, going on to explain that it not only allows for more holistic solutions to be presented to borrowers, but is crucial for unlocking the full potential of a broker’s business. 

“The more you can support and fulfill the needs of your customers, the better relationships you have with them. It actually creates a stronger value within your business, because it becomes a lead generator rather than just a trail revenue business.

“If you’re not having broad conversations and locating leads from within to create opportunities for your business, you’re really diminishing the value of what you’re building,” he added.  

While diversifying into the commercial space may seem intimidating, Withers feels it comes down to finding confidence rather than necessarily learning new skills. He says ‘commercial’ is a broad term that contains a spectrum of complexity, but certain types of transactions in the sector have a considerable amount of overlap with residential lending.

Withers explained, “[Mortgage brokers] have the information they need by doing the customer’s home loan to do a small business commercial loan for someone wanting to buy a property to operate their business from.”

“If you ask a broker about their first home loan, they were very nervous about being able to deliver that outcome for the customer. It’s the same fear, but it’s all about taking that first step into the unknown and doing a commercial loan.”

If brokers are worried about establishing legitimacy when first entering the commercial sector, Withers pointed out that there is no greater reference than having already provided excellent service in the residential space.

He continued, “Once you’ve done a great outcome for a customer with their home loan, you’ve opened up an invitation to go back and talk to them about their other needs, to talk to them about their business, their story, what they want to achieve, and what they need to be successful.

“You’ve already created that comfort with the client to have that conversation.”

Over the last several years, even predating the royal commission, there has been a considerable amount of education made available to brokers interested in expanding into commercial, whether it be lender-driven, facilitated by associations, or obtained through a Commercial & Asset Finance Brokers Association (CAFBA) certification.

“The training and education are there. Brokers just need to take the [first] step and seek it out,” said Withers.