In today’s challenging economic climate, mortgage brokers are increasingly seeking ways to diversify their services.
To meet the growing demand for fast financing before the end of the financial year, mortgage brokers are turning to non-bank lenders, who serve as commercial lending specialists. These specialists may provide valuable support to brokers and their SME clients, helping them navigate the commercial lending landscape with expertise and efficiency. This blog explores the rise of commercial lending among mortgage brokers, the advantages of working with non-bank lenders, and the strategies available to seize opportunities in the lead up to EOFY.
Increasing Demand for Commercial Loans
According to data from the MFAA, mortgage brokers settling commercial loans reached a record high of $17.2 billion, marking a remarkable 28.6% year-on-year increase between April and September 2022. This surge demonstrates the growing interest among brokers in expanding their services to include commercial lending. Diversifying into commercial lending, particularly for those who may be unfamiliar with the commercial lending landscape, is a must for brokers in the current climate.
The Urgency of EOFY
As the end of the financial year approaches, small businesses rely on their brokers to act swiftly and capitalise on available tax breaks. However, traditional banks’ adherence to stricter standards often leads to prolonged loan approval processes, causing missed deadlines. Many businesses may not meet the requirements set by banks due to reasons such as lack of property backing or outstanding ATO debts, so while tax breaks may be available, small businesses frequently require funding to take full advantage of deductions like temporary full expensing.
Supporting Brokers on Multiple Levels
When a broker is securing a loan for a small business to acquire a commercial property and the property valuation falls short, a bridging finance solution becomes essential. There are commercial lenders that fill this gap effectively. Additionally, when a business is acquiring another property and has drawn funds from its own operations, it may face a thin cash flow buffer.
The Potential for Broker Expansion
Commercial finance presents a significant opportunity for mortgage brokers to expand their service offerings for both existing home loan clients and new clients. A recent survey revealed that 60% of businesses expressed a willingness to consider using a broker for future financing needs. However, many brokers perceive a high barrier between mortgage lending and commercial lending. Nonetheless, when brokers collaborate with non-bank lenders and specialised finance partners, the transition becomes more seamless and manageable.
If your client requires confidential debt help or credit file repair in order to get a loan approved, contact the team who have been in the business since 2009, Princeville Credit Advocates, on 1300 93 63 63 or email help@princeville.com.au
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