Considering expanding your repertoire to include commercial deals? Kevin Eddy explores how – and assesses if it’s worth it
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Of all the diversification options available to residential brokers, getting into commercial lending often seems to be the most obvious. After all, it’s still lending, and therefore easier to transfer your existing skills across to, rather than selling insurance or real estate. Or so it seems. The reality is that commercial lending is much more than just crossing out ‘residential’ and inserting ‘commercial’ into the loan purpose field. Ranjit Thambyrajah of Acuity Funding, MPA’s top commercial broker for 2011 and 2010, says it’s much more complex. “Unlike residential, every transaction is unique,” he says. “You need to develop skills over time to properly service those needs.” That’s not to say that “crossing over” is impossible: you just need to be willing to put the work in.
THE SIMPLE OPTION The simplest way of handling commercial deals is to simply refer them onto either a commercial broker or lender.
Loan Market commercial broker Grant Rheubens reckons that 40% of his business comes from referrals from residential brokers within the group – both direct and through the aggregator. In return, he pays a referral fee. Most aggregators run a similar kind of ‘hub’ model that enables these referrals. You can also ‘spot-refer’ direct to lenders. ANZ’s commercial wing encourages brokers with little experience with commercial deals to pass details direct to its team: in return, it will pay a one-off referral fee of 50bps on business loans up to a maximum of $20,000.
Industry insider “Brokers gain a reputation based on how they represent applications and transactions. The better they’re presented, the quicker it is for us to process and approve.” Cosi De Angelis, head of commercial broker, ANZ
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