Residential mortgage brokers are passing up opportunities from their small business clients by not making an effort to know about their commercial needs.
The opportunity to earn more income from these clients is clearly there, but often brokers are not getting the conversation going into their clients’ business situations, said Yannick Ieko, a senior lending strategist at SMSF Loan Experts.
“They have the client, the relationship, the information. They have done 90% of the work.”
Ieko said that making that little extra effort to know the business needs of these customers opens the door to opportunities in commercial lending.
“If you’re writing a loan of $400,000 for residential clients, you can easily double your money or earn a lot more by talking to them about their commercial needs.”
However, many residential mortgage brokers are not aware of the solutions they can provide to the businesses of their self-employed or small business clients. Some may think commercial lending is too complicated an area to get into.
But Ieko said many of the commercial lending transactions are straightforward to put together.
To get brokers started in the commercial space, Ieko suggested that they speak to their aggregators to see what solutions are on the panel, and then get the accreditation and training they need.
It also helps to speak with lenders that have flexibility in understanding customers’ needs and specific circumstances.
Matt Heinnen, manager of commercial operations at Liberty, said that to help brokers, his team works closely with them to discuss business plans for clients and build a comprehensive view of their financial opportunities, all with an accountant’s help.
Liberty also gives brokers direct access to its loan assessor and makes sure the application process is easy to complete. The company offers various levels of financial verification, including full-doc, lease-doc and other alternative-doc options.
“We understand that our business partners are fundamental to our business growth, so we continue to provide experienced salespeople with national coverage and a dedicated and comprehensive commercial scenarios service,” said Heinnen.
Liberty’s commercial value proposition considers both credit profile and LVRs to establish the rate. This means a fairer result for the applicant, he said, adding that the company offers upfront valuations and pre-approvals to help brokers quickly determine if a deal is plausible.
With an initial comprehensive assessment, Liberty is able to provide long-term solutions without the arduous annual reviews and paperwork, said Heinnen.
“This is a really popular ‘set and forget’ facility for the customer.”
Ieko said his company uses Liberty for the flexibility and pragmatism of its credit team.
“They’re really trying to get the deal done versus trying to find reasons to reject it,” he said. “They’re driven by the outcome and not the process, and that makes a world of difference.”
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