Pepper and Aussie unite to make play for mortgage brokers to shift over to SME

by Mike Wood08 Oct 2021

Two of the biggest names in the industry, Pepper Money and Aussie Home Loans, have come together to give mortgage brokers a unique opportunity to diversify their businesses into the SME space.

Pepper will launch its commercial property loans scheme across the Aussie lending panel, giving Aussie brokers access to them, with a streamlined process to help mortgage brokers to have an easy point of entry to the commercial lending world.

Barry Saoud, the new general manager mortgages and commercial lending at Pepper, was previously at Aussie and said that the linkup would be a boon to brokers looking to find new income streams.

“I was at Aussie for over 10 years in a number of different roles, from being their general counsel to being head of product and mortgages,” he said. “It’s really exciting to bring this commercial offering that caters for small business clients and property investors into the Aussie brokers.”

“It’s very important for brokers to be able to diversify their income, not only for themselves but also to help provide more products to their existing customer base.”

If you read the recent MFAA report, in the 6 months to March 2021, there was over $10 billion in commercial loans settled by brokers, so it’s a growing market.”

“What we’re hoping to do through this product offering is to support brokers to diversify their income, grow their portfolio into this space and to help them to identify their self-employed customers and commercial property investors from their existing base, and try to create that holistic approach to lending that looks after not only their residential needs but also their commercial needs.”

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“There is a misconception that commercial loans are complex and hard. When you have a look at it, there are some complex SME that require more effort, but what we offer at Pepper Money is support throughout the end-to-end process.”

“Our commercial product offering is catered for the ordinary residential broker who wants to expand into this space. What we’ve done is align the commercial application to the residential application.”

“There’s only three subtle differences from the mortgage application, which are all around security type: that’s the fundamental difference around income verification. Apart from that, it’s like you’re writing an ordinary application.”

“The potential for brokers is huge: if you’re a mortgage brokers that has never written a commercial loan before, or whether you’re used to writing complex commercial deals, this product suits you.”

“What’s also important is that the Pepper offering has been developed with that kind of broker and customer in mind: it looks not only at the traditional forms of income and documentation, but also alternative documentation and flexible income evidence.”

“Coming out of Covid, that’s important. What we know coming out of the pandemic is that a lot of the traditional SME customers probably haven’t kept their tax returns up to date, they don’t have all their verifications of income, so they’re looking to non-bank lenders to support them and help their future growth potential.”