Preparing for the big jump into commercial

Here are some tips on how to find a new customer segment

Preparing for the big jump into commercial


By Mina Martin

A slowdown in the housing market, alongside a switch towards refinancing, has motivated a growing number of residential brokers to explore more opportunities in commercial lending. But before they jump in, they need to equip themselves with the right knowledge.

Commercial lending may not be the same as writing home loans, but not to worry because non-banks have robust support tools and people in place to guide new players as they find their feet.

John Mohnacheff, group sales manager at Liberty, said that there are nuances in a commercial home loan, but this shouldn’t be a cause of worry for experienced residential brokers.

“If you’ve been doing home loans for a number of years, writing a commercial loan may not be difficult,” Mohnacheff said.

Lenders like Thinktank and Liberty as well as most aggregators offer training sessions to help brokers build a knowledge base and get some practical tips.

“It’s valuable for brokers to engage with fellow brokers to discuss the outcomes of different credit applications,” said Peter Vala, general manager for partnerships and distribution at Thinktank. “During these discussions, they can share insights on key risks identified in submissions and explore potential mitigations to address those risks.” 

Having a strong relationship with a lender can also help prioritise the loans that are most likely to succeed.

“Collaborating with knowledgeable relationship managers helps brokers efficiently evaluate the viability of a loan up front, saving valuable time and resources that can be redirected towards more promising opportunities,” Vala said.

It’s also worthwhile to build a strong reputation in your local community.

“When it comes to seeking new clients, relationships are key,” Mohnacheff said. “By affiliating themselves with local accountants, financial planners, or even experienced business bankers, brokers can create a mutually beneficial flow of customers.”

Another tip from Vala was to cultivate accountants as key contacts.

“Brokers should leverage their existing network of self-employed clients and ask for introductions to their accountants,” he said.

Some measures showed that clients looking to finance seek accountants at around twice as often as traditional banks and nearly four times as often as lawyers.

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