MPA 24.02

TAPPING INTO COMMERCIAL FINANCE All you need to know about business lending

MPAMAG.COM/AU ISSUE 24.02

NON-MAJOR BANKS ROUNDTABLE Second-tier lenders invest in broker partnerships

TOP COMMERCIAL BROKERS 2024 Revealing the sector’s best performers

THE POWER OF KNOWLEDGE Top commercial broker loves to teach others

Thomas Tang AUSUN Finance

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MAY 2024

CONNECT WITH US

CONTENTS

Got a story or suggestion, or just want to find out some more information? twitter.com/MPAMagazineAU facebook.com/Mortgage ProfessionalAU

UPFRONT 02 Editorial

Why brokers should look to commercial lending for growth

12 FEATURES

COMMERCIAL LENDING GUIDE

39

Get to grips with what’s happening in the world of business finance

04 Statistics

The latest data on Australia’s booming property market

06 Opinion

Brokers play a key role in the success of SMEs, says COSBOA head

FEATURES 14 Commercial property

Demand for industrial space is on the rise in the sector

20 SMEs lending

Small businesses seek brokers’ expertise to navigate tough market

SPECIAL REPORT

TOP COMMERCIAL BROKERS 2024 MPA reveals Australia’s best-performing commercial finance brokers and they share their tips for success

48 FEATURES

NON-MAJOR BANKS ROUNDTABLE

BIG INTERVIEW

THOMAS TANG

How non-major banks are working with brokers to build better partnerships

AUSUN Finance partner and co-founder Thomas Tang, who was named MPA’s Top Commercial Broker for 2024, talks about his career journey to date and why he is so dedicated to learning new skills and passing his knowledge on to others

08

70 PEOPLE

BROKERAGE INSIGHT

Cristian Fedrigo talks about what motivated him to set up Equipped Commercial Finance

26 Asset and equipment finance A recovery is underway in the sector, providing opportunities for brokers

34 New app unlocks data

Aussie’s new mobile app provides instant access to property data

PEOPLE 72 Other life

Broker Tom Uhlich looks back at the years he spent competing in triathlons

MPAMAG.COM/AU NOW ONLINE: Our daily newsletter. Keep on top of property market trends, business strategy, and what industry leaders have to say.

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UPFRONT

EDITOR’S LETTER

All signs point to commercial

T

he latest broker market share figures released by the MFAA provide a compelling reason why mortgage brokers can’t afford to ignore commercial lending.

Mortgage brokers wrote 71.8% of all new residential home loans between October and December 2023, breaking the quarterly record for market share. The previous highest figure was 71.7% in the September 2022 quarter.

The MFAA rightly points out that this record market share is due to brokers’ outstanding service to their customers, their commitment, professionalism and the trust clients place in them.

But it also reveals the highly competitive nature of the home loan space and how many brokers are competing with each other for lending business, rather than with the banks.

Conversely, the world of commercial finance, which covers loans for commercial property, small businesses, asset and equipment, has far less broker involvement.

There are no definitive figures on the total number of brokers writing commercial loans, although the MFAA Industry Intelligence Service 16th edition report, covering the six-month period from October 2022 to March 2023, showed that the proportion of mortgage brokers also writing commercial loans is less than 30%, or just under 6,000 brokers.

There’s still a massive gap in the market, with many potential commercial clients dealing directly with lenders Clients are well served by highly specialised commercial brokers focusing solely on this sector but there’s still a massive gap in the market, with many potential commercial clients dealing directly with lenders.

This presents an enticing opportunity for mortgage brokers to expand and strengthen their customer base by offering commercial lending. Brokers often say ‘‘if you don’t offer a service to your client, they’ll go elsewhere’’.

But taking a leap into the commercial sector requires patience, guidance and the need to acquire the necessary knowledge and skills. So how should brokers go about it?

MPA’s May edition takes an in-depth look at commercial finance, with features on commercial property, SME lending and asset and equipment finance.

We dissect how lenders and aggregators assist brokers to embrace opportunities in commercial lending and explain why diversification is so important.

In this issue, we also reveal the much-anticipated Top Commercial Brokers for 2024. In addition to a comprehensive report on the winners, our cover story features a fascinating interview with the No.1 commercial broker Thomas Tang, who has a passion for education and mentoring.

I hope you enjoy reading the May issue of Mortgage Professional Australia magazine.

Antony Field, editor, MPA

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www.mpamag.com/au MAY 2024 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher Claire Tan

Writers Kim Champion, Mina Martin

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UPFRONT

STATISTICS AUSTRALIAN REAL ESTATE IN NUMBERS

MARKET VALUES SURGE NATIONWIDE

PORTION OF SUBURBS HOUSES REGION

Suburbs analysed

Quarterly rise #

Sydney

559

401

Melbourne

381

130

Brisbane

312

293

Adelaide

286

284

Perth

294

293

Hobart

44

13

Darwin

35

29

CoreLogic’s analysis revealed 88.4% of the national house and unit markets experienced value increases over the past year, a significant rise from 52.9% in July and 39.1% in February.

$10.4trn

New record high for residential real estate in February

1.3%

Quarterly rate of home value growth to February, from 1% in previous quarter

Canberra

81

42

Regional NSW

469

334

Regional Vic

192

77

Regional Qld

420

369

Regional SA

73

55

Regional WA

129

114

Regional Tas

53

24

Regional NT

9

9

Combined capitals

1,992

1,485

Combined regionals

1,345

982

National

3,337

2,467

APPROVALS DECLINE CONTINUES

8.9%

Dwelling approvals dropped 1% in January in seasonally adjusted terms after falling 10.1% in December, driven by a 9.9% decrease in private house approvals, ABS reported.

DWELLINGS APPROVED: JANUARY KEY DATA

Annual home value growth, highest since FY 2021-22 (10.8%)

Number of dwellings

Monthly change

Yearly change

Seasonally adjusted Total dwelling units approved Private sector houses Private sector dwellings excluding houses

38

Median days on market for properties in February

Source: CoreLogic Monthly Housing Chart Pack, March 2024

4

12,850 7,461 5,238

-1

4.8

-9.9 19.5

-4.7 22.6

-1.3

-6

-2.1 -0.2

-5 -6.1

Trend Total dwelling units approved Private sector houses Private sector dwellings excluding houses

13,225 8,026 4,993

Source: Building Approvals, Australia, January 2024

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TIGHTLY HELD SUBURBS CHALLENGE BUYERS

RECORDING ANNUAL RISE IN VALUES UNITS Quarterly rise %

Annual rise #

Annual rise %

Suburbs analysed

Quarterly rise #

Quarterly rise %

Annual rise #

Annual rise %

71.7

551

98.6

308

204

66.2

299

97.1

34.1

344

90.3

243

93

38.3

199

81.9

93.9

312

100

167

166

99.4

167

100

99.3

285

99.7

74

69

93.2

73

98.6

99.7

293

99.7

105

105

100

105

100

29.5

22

50

13

1

7.7

3

23.1

82.9

15

42.9

15

12

80

7

46.7

51.9

63

77.8

40

21

52.5

14

71.2

369

78.7

112

80

71.4

40.1

77

40.1

41

28

87.9

415

98.8

144

75.3

69

94.5

88.4

121

45.3

In suburbs like Killarney Heights, with an average 20.1-year hold, owners rarely sell, making these areas highly sought-after and challenging for new buyers.

SUBURBS WITH THE HIGHEST AVERAGE HOLDING PERIOD Suburb

State

Region

Average holding period (years)

35

Kilarney Heights

NSW

Greater Sydney

20.1

81

72.3

Clarinda

VIC

Greater Melbourne

19.2

68.3

20

48.8

Fairfield Heights

NSW

Greater Sydney

18.8

121

84

135

93.8

Point Lonsdale

VIC

Rest of Victoria

18.3

2

1

50

2

100

93.8

14

12

85.7

11

78.6

Kareela

NSW

Greater Sydney

17.8

25

47.2

9

7

77.8

7

77.8

Cherrybrook

NSW

Greater Sydney

17.7

100

3

33.3

1

1

100

-

-

Berowra Heights

NSW

Greater Sydney

17.6

74.5

1,885

94.6

965

671

69.5

867

89.8

Glen Alpine

NSW

Greater Sydney

17.6

73

1,079

80.2

323

250

77.4

256

79.3

Caulfield

VIC

Greater Melbourne

17.6

73.9

2,964

88.8

1,288

921

71.5

1,123

87.2

Watsonia North

VIC

Greater Melbourne

17.4 Source: PropTrack

Source: CoreLogic Monthly Housing Chart Pack, March 2024

WOMEN LEAD IN HOME OWNERSHIP

NATIONAL VACANCY RATE DECLINES

CoreLogic survey showed that 67.9% of Australians own homes, with women’s ownership slightly higher at 68.2%, compared with 67.4% for men.

The national vacancy rate fell to 1% in February, declining 0.1% from the previous month, with total vacancies at 30,161, down from 32,108.

SHARE OF DWELLING OWNERSHIP BY GENDER

VACANCY RATES – FEBRUARY

Female

Does not own any dwelling

Owns at least one dwelling as either a residence or investment

31.8%

68.2%

Male

32.6%

67.4%

Total

32.1%

67.9%

Source: CoreLogic Women and Property Gender Equity in Property Ownership, Australia, 2024

City

February 2023 vacancies

February 2023 vacancy rate

January 2024 vacancies

January 2024 vacancy rate

February 2024 vacancies

February 2024 vacancy rate

Sydney

9,301

1.3

9,114

1.3

8,137

1.1

Melbourne

5,545

1.1

5,859

1.1

5,288

1

Brisbane

2,802

0.8

3,327

1

3,213

0.9

Perth

839

0.4

775

0.4

776

0.4

Adelaide

821

0.5

783

0.5

830

0.5

Canberra

1,069

1.8

1,061

1.7

936

1.5

Darwin

378

1.4

445

1.7

395

1.5

Hobart

237

0.9

278

1

326

1.2

National

32,040

1

32,108

1.1

30,161

1

Source: SQM Research, National Vacancy Rate, February 2024

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email antony.field@keymedia.com

Brokers enable SMEs to thrive

Commercial and asset finance brokers help small businesses succeed, but government and banks must also play their part, says COSBOA CEO Luke Achterstraat

FINANCE IS the enabler of business growth and the ability for Australia’s 2.5 million small businesses to access finance has never been more important.

The work of commercial and asset finance brokers in providing solutions for small business plays a vital role in ensuring the engine room of our economy can access the equipment and productive capital that drives their success.

For many small businesses, 2024 will be a crunch year. Latest data from the Australian Small Business Ombudsman indicates that 43% of small business owners are not generating a profit, and most are paying themselves below-average weekly earnings.

The cost of doing business in Australia has become intolerably high, with small businesses facing a perfect storm of rising energy, rent and insurance costs.

Unfortunately, governments continue to increase the regulatory burden on small operators, particularly in areas like industrial relations where the impact on small businesses is often disproportionately high.

However, Australian enterprises remain resilient and continue to be the largest private employer in the country despite an increasingly complex environment.

When green shoots emerge, small businesses need to be able to execute quickly and with certainty.

The ability for time-poor small to medium enterprises to benefit from the services of brokers who bring expertise and market understanding cannot be understated, which is why over 75% of SMEs utilise a commercial broker to access the right facility.

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Whether it is funding for new equipment, machinery or vehicles, these brokers are critical growth enablers.

There are at least two ways the federal government could better support brokers to support small business.

Firstly, the government should increase the instant asset write-off in this year’s federal

business is adhering to a serviceable payment plan with the ATO. It seems arbitrary and unfair, because it is.

Banks should update their lending practices to ensure that small businesses are not unfairly prevented from accessing muchneeded capital – which in many cases would be used to not only clear their tax debt but also open the door for future growth.

Financing of tax debt by banks, rather than the ATO, puts more money into the economy by making the ATO less reliant on funding its own debtors. This would be a win-win-win for taxpayers, small business and brokers alike.

As we move into 2024 the work of brokers will have an impact on small business success, for owners to not only survive but also thrive.

I have enjoyed engaging with the Commercial & Asset Finance Brokers Association of Australia (CAFBA) over the past year, including a productive day in Melbourne meeting with the board.

The ability of time-poor SMEs to benefit from the services of brokers who bring their expertise and understanding of the market cannot be understated budget from its current dismal $20,000 to a more appropriate $150,000.

Australia’s projected productivity growth has declined from 1.5% to 1.2% per annum over the next 40 years, which means lower living standards for future generations.

Boosting the asset write-off threshold will help boost productivity and is a proven behavioural driver of businesses investing in their own productive capacity.

It is such an obvious thing to do; the Senate has already passed a motion in favour of lifting the threshold to $50,000, which is a good start.

Secondly, we are missing an opportunity to deal with the perverse effects of tax debt.

The Australian Tax Office (ATO) reminded small business that debt accumulated during COVID cannot be retained forever.

Yet many banks have indicated that they will simply not lend to small businesses that have an ATO liability. They will not lend even if the

As well as CAFBA being a staunch supporter of Australian small businesses, the work it does in promoting careers in broking and ensuring right-sized regulation such as the Professional Standards Scheme is vital.

As many residential mortgage brokers seek to diversify into commercial lending, I would highly recommend these practitioners join CAFBA as the national peak professional body and utilise its education and training platforms to increase their skill level so they can compete and provide the right outcomes.

On behalf of COSBOA, I commend the commercial brokers that support Australian enterprise and thank CAFBA for its ongoing leadership and advocacy.

Luke Achterstraat is the CEO of COSBOA and has 15 years’ experience in advocacy. As CEO, he advocates on behalf of small businesses to ensure their voice is heard in Canberra.

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PEOPLE

BIG INTERVIEW

THOMAS TANG: EMPOWERING OTHERS THROUGH EDUCATION Top Commercial Brokers winner Thomas Tang talks about the importance of great mentors and why he is so passionate about passing on his skills and knowledge to other brokers

KNOWLEDGE IS power, but for Thomas Tang, Australia’s Top Commercial Broker for 2024, sharing that knowledge with brokers and customers so they can flourish is where the real power resides.

The dynamic and highly successful broker, who settled more than $471 million of commercial loans to take the No.1 spot in MPA’s Top Commercial Brokers, is a partner at brokerage AUSUN Finance.

Tang has amassed an impressive set of skills

He started his career in finance in 2012, working as a marketing assistant for a big bank, and then moved into a personal banker role in the branch network.

After taking on the role of lending manager for just a few days, Tang left the bank in July 2015, deciding that it wasn’t for him and chose broking instead.

“I didn’t want to be put in a box in a big machine,” says Tang. “I want to find out what’s best for the customer, but as a residential

“In the past eight years, I have coached more than 20 brokers from non-industry experience to more experienced brokers” during his career, including property development and investment and all aspects of commercial and residential lending. He also wrote a book, Retire on Rent, providing tips on how to achieve financial freedom through property investment.

He has shown his leadership capabilities as a lieutenant in the Australian Army Reserve, as co-founder of AUSUN Finance, and as a mentor to other brokers.

Tang is clearly passionate about mentoring and “paying it forward” after learning so much from others.

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lending manager I can only offer one product.”

Tang praised his mentor Jun Sun, the managing director and founder of AUSUN Finance, who helped him become a successful broker and was ranked No.3 in Top Commercial Brokers 2019.

Tang says Sun assisted him immensely.

“When I was in uni I established two student societies – I was very good at networking, marketing and hosting events. Finding customers is for me never a struggle, but delivering a solution is a struggle for new brokers.”

Sun provided Tang with one-on-one coaching for the first few years. “He would sit down with me in the appointments and we would see customers together.”

While Tang would do the research and data entry, Sun would assist with compliance and risk management, checking files and negotiating loan deals.

With Sun as his mentor, Tang says he was able to leverage his experience to deliver high-quality solutions to clients and mitigate risk.

He describes Sun as being approachable 24/7, reliable and fair, with a strong commitment to grow the AUSUN team.

When AUSUN started in 2015, the brokerage consisted of Sun and two assistants, with Tang joining as a partner.

Now the business has 30 licensed brokers, with two offices in Melbourne and locations in Sydney, Adelaide, Brisbane and Perth.

Tang says one of the big lessons he learnt from Sun was the difference between knowledge and experience.

“Knowledge you can learn quickly, but experience comes with time – this is why you need to leverage someone else’s experience to ensure that the client’s expectations are met.”

When it comes to his own ongoing professional development, Tang says he’s very willing to “pay and learn”. He has spent

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PROFILE Name: Thomas Tang Title: Co-founder and partner Company: AUSUN Finance Years in the industry: 11 Career highlight: Going from a bank teller to No.1 commercial broker in 10 years, being an active army reservist, doing small property developments on the side and JVs with clients to grow together. Leveraging the team to provide success for many Career challenge: There is a real scarcity of learning opportunities, including mentorships and partnerships. Putting systems in place and building your own community for long-term success

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PEOPLE

BIG INTERVIEW $300,000 in fees in the past 10 years to take part in mentorships and joint venture projects, learning “different things from different people”.

His mentors include business coach Mark Creedon, broker business coach Jason Back, former Telstra CEO Andrew Penn, Hotspotting founder Terry Ryder, Robert Kiyosaki, Michael Yardney and Tony Robbins.

Creedon has helped him to understand processes and his business ideas have led to fast growth that remains sustainable.

Tang has also studied short courses to learn how to manage property developments and commercial property investments.

He also mentors other brokers at AUSUN Finance through an MFAA accredited program.

“I have mentored others from day one,” Tang says. “As soon as I learned something, I would share it with others in a systematic way. In the past eight years, I have coached more than 20 brokers from non-industry experience to more experienced brokers.”

Four of Tang’s mentees have won trophies in MPA’s Rising Star awards, including Kiki Feng (2021), Lee Hao (2022), Christine Hong (2023), and Carl Hou (2024).

“And I will keep that track record,” says Tang.

Through his business consultancy service, Tang also teaches brokers about running their businesses like a branch or business centre, and about staff recruitment, training and retention.

Tang says it’s important that brokers know more than just lending policy. Knowledge of tax, legal issues, the commercial property market, valuation risk, technology and money psychology can all affect lending outcomes.

To help answer new brokers’ basic questions, Tang is developing his own ChatGPT software called Ask Thomas 24/7.

On top of that, he runs an education program to teach people how to do small-scale developments, including a project manager and an architect.

Tang is proud of his involvement in the Army Reserve, now eight years and counting.

“I treat it as my free MBA degree – when I was in uni I didn’t have the money to do an MBA. I have learned a lot in the army’s leadership program – they teach you about how to manage stress, how to make quick decisions strategically, how to look after your people.”

These skills have been useful in his broking career and he encourages other brokers to consider joining the Army Reserve.

Tang says by the time an officer in the army

TANG’S KEY LEARNINGS A solo broker has market information limits due to volume and bargaining power in front of multiple lenders. More brokers are grouping together to achieve sustainable growth Partnership and system integration becomes the next challenge for a group of brokers, such as compliance standards, commission splits, marketing directions, culture value, and management style Only consistent, growing staff can retain a client’s consistent growth. Creating a platform for the team is a higher priority than attracting clients. My success comes from the team behind me Commercial lending is a big learning curve. Team up with an experienced accountant or financial planner for business loans, and a good project manager, builder, architect, valuer, QS and property channel agent to make a project successful Getting support from lenders can be a challenge.

Channel conflict still exists. Demonstrate your experience and loyal client relationships, otherwise the lenders may provide their best efforts and compete with you on deals

“Knowledge you can learn quickly, but experience comes with time – this is why you need to leverage someone else’s experience to ensure that the client’s expectations are met” Tang wants to help as many clients as possible but says his time is limited.

“So I want to coach other brokers to help them earn money, enjoy work life as a broker and enjoy their growing relationships with customers.”

Those brokers he mentors go on to mentor others.

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graduates, it has invested about $1 million in taxpayers’ money into that person. “It’s very appealing and I have no regrets.”

He has also invested in software that generates feasibility studies for development projects.

“I’m keen to launch to the market for all commercial brokers and lenders in coming months.”

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01/05/2024 9:59:04 am

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01/05/2024 9:59:37 am

FEATURES

COMMERCIAL LENDING GUIDE

TIME TO PIVOT TOWARDS SMEs FOR GROWTH 12

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Australia is a nation powered by small and medium businesses, so it makes sense that brokers should look to them to diversify their income streams, attract new customers and bolster existing client relationships. Unlike the home loan market, which is highly competitive, much of the commercial lending sector remains untapped by brokers. MPA’s Commercial Lending Guide provides valuable insights for brokers wanting a piece of the action IN A competitive and constrained residential lending market, it’s a no-brainer that brokers should also offer commercial loans as part of their overall suite of services.

While the home loan refinance market has quietened down considerably since the record levels of 2023 when banks were ferocious in their pursuit of new clients, offering cashbacks of up to $6,000, there’s still plenty of competition for residential mortgage customers.

More often than not mortgage brokers are now competing with each other for customers, rather than with lenders. The latest research from the MFAA, released in April, revealed that 71.8% of all new residential home loans were written by mortgage brokers, the highest result observed since the measure has been recorded.

While this is great news for the sector, there’s greater competition among brokers for a ‘smaller slice of the pie’ as the number of home loan applications falls on the back of 13 interest rate rises and stubbornly high inflation.

The Equifax Quarterly Consumer Credit Insights report for March 2024 showed that mortgage applications fell 4.5% for the quarter, compared to the March 2023 period.

The property market continues to break records across the nation, and this, combined with slow wages growth and higher interest rates, means lower borrowing capacity for mortgage holders.

In a tight residential mortgage market,

brokers can look to the commercial lending sector to boost their bottom line and strengthen their relationships with existing customers.

The 16th edition of MFAA’s Industry Intelligence Service report, covering the six months from October 2022 to March 2023, showed that less than 30% of mortgage brokers (28.8%) were also writing commercial loans, a drop of 4.1% compared to the previous six months.

This means there’s a big gap in the market – many SMEs are going directly to lenders for their finance requirements, without the help of a broker.

Brokers can gain a competitive edge by offering commercial loans, becoming a ‘onestop shop’ for their clients’ finance needs.

To explain the advantages and opportunities of commercial finance, MPA is proud to present its 2024 Commercial Lending Guide.

In this comprehensive report, brokers can learn about market trends in three segments – commercial property, SME lending and asset and equipment finance.

Lenders and aggregators discuss the importance of diversification, how they ensure application and credit decisioning processes are fast and efficient for brokers, and how they work with brokers to provide the necessary training and skills to write commercial loans.

The guide also looks at predicted future growth in commercial lending when inflation improves and interest rates are reduced.

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FEATURES

COMMERCIAL LENDING GUIDE COMMERCIAL PROPERTY

Demand for industrial space on the rise as stresses ease Despite various economic pressures, the outlook is improving in the commercial property finance sector as inflation eases and interest rates stabilise. Non-bank lenders say the sector remains strong, especially with SME demand for industrial property

THE CURRENT state of the commercial property finance sector is like looking out of the window – there’s a few grey clouds but clear blue skies are on the horizon.

Commercial property has suffered a variety of problems, including higher interest rates and inflation, rising building supply costs, and labour shortages.

This has made it difficult for businesses to “make the numbers work” and secure finance, but there are positive signs this is turning around.

The latest ABS business finance figures for February 2024 show loan commitments for construction finance rose 31.4%, after a rise of 5.9% in January.

Herron Todd White’s Month in Review March property report predicted another robust year for industrial property, a sector preferred by many investors.

To gain some insights into the sector and the opportunities for brokers and their clients, MPA spoke to Zeb Drummond, chief operating officer at Gateway Bank, David Smith, chief distribution officer at Liberty, Michelle Whateley, NAB’s specialised business bank executive commercial real estate, and Belinda Wright, head of partnerships and distribution at Thinktank.

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Commercial property market trends Whateley says the commercial property market continues to go through a period of adjustment.

“We are still seeing good activity across the sector, but it is off its peak,” Whateley says.

“There remains good demand for industrial property. Development activity is continuing and still seeing some rental growth, which has also resulted in owner-occupiers moving to purchase their premises.”

Whateley says activity in the retail property market has improved after a period of reset.

“Office is still in a period of readjustment. We see a flight to quality assets. There is leasing activity, but incentives are high.”

NAB has also seen a softening of yields across valuations for all sectors.

“Residential development activity has significantly decreased, with pressure on feasibilities and builder uncertainty. Sales have been impacted by interest rates and confidence in the delivery of projects.”

Smith says as inflation stabilises and the interest rate environment settles, Liberty

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NEW BUSINESS LOAN COMMITMENTS BY PURPOSE Construction (seasonally adjusted)

Purchase of property (seasonally adjusted)

Construction (trend)

Purchase of property (trend)

10

8

6 $bn

expects business confidence to improve.

“SMEs are well positioned to adapt quickly, creating more opportunities for brokers to provide support,” says Smith.

“At Liberty, we’re seeing both SMEs and investors looking for larger, modern spaces to help meet demand and allow for business growth. These commercial borrowers need trusted guidance, which presents an ideal occasion for brokers to expand their offering and their network.”

Drummond says given the ongoing interest rate environment, Gateway Bank is continuing to see strong demand and enquiry from borrowers looking for more favourable terms.

“Most often this is purely a simple rate decision, but we’re increasingly seeing enquiry from borrowers looking at our longer – up to 30-year – loan terms, which are helping ease financial burden and freeing up working capital for other areas,” he says.

4

2

0

Feb 06

Feb 09

Feb 12

Feb 18

Feb 21

Feb 24

Source: ABS Lending Indicators, February 2024

“We see our commercial property lending offering being a fairly natural diversification option for brokers.

Our experienced commercial banker can support brokers through the process step by step” Zeb Drummond, Gateway Bank “Our portfolio is targeted at the smaller end of the market and we’re continuing to see enquiry related to industrial units and retail properties.”

Wright says the past year has been challenging due to inflation, rising interest rates and a changing economic environment, all of which have affected consumer sentiment and the business sector.

“However, despite these generally negative influences, we have continued to see solid commercial property lending activity across

Feb 15

different property asset classes.”

Thinktank remains conscious of numerous challenges facing the commercial office market and of the significant revaluations being revealed. Wright says Thinktank’s latest Monthly Market Focus report focuses on the industrial property space.

“Our view is that this sector remains strong, primarily driven by structurally supported demand leading to exceptionally low vacancy rates. While the prospect of lower interest rates may exert pressure on commercial property

yields, industrial properties have largely offset this through positive rental dynamics.”

Wright says vacancy rates have consistently fallen across all Australian states, with average net face rents experiencing quarterly increases in Q4 2023.

“The underlying supply-demand disparity, coupled with the ongoing demand for modern warehouse spaces, continues to support upward pressure on rents for the more sought after properties and areas.”

Diversification opportunities Drummond says it is pleasing to see increased demand from residential brokers wanting to become accredited to offer Gateway’s commercial products.

“We definitely see our commercial property lending offering being a fairly natural diversification option for brokers.”

Drummond says it opens up a new segment of the market for brokers with business owners, commercial property investors, be it individuals, companies or trusts. Often the

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FEATURES

COMMERCIAL LENDING GUIDE CAPITAL CITY PROPERTY MARKET INDICATORS - INDUSTRIAL Sydney

Melbourne

Brisbane

Adelaide

Perth

Hobart

Darwin

Canberra

Rental vacancy situation

Shortage of available property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Severe shortage of property relative to demand

Shortage of available property relative to demand

Shortage of available property relative to demand

Over-supply of available property relative to demand

Shortage of available property relative to demand

Rental vacancy trend

Tightening

Tightening

Steady

Steady

Tightening

Steady

Steady

Tightening

Rental rate trend

Increasing

Increasing strongly

Stable

Increasing

Increasing

Increasing

Stable

Increasing

Volume of property sales

Declining

Steady

Declining

Declining

Declining

Declining

Steady

Increasing

Stage of property cycle

Starting to decline

Starting to decline

Starting to decline

Starting to decline

Approaching peak of market

Starting to decline

Start of recovery

Rising market

Local economic Situation

Flat

Flat

Flat

Contraction

Steady growth

Contraction

Flat

Steady growth

Value difference between quality properties with national tenants, and comparable properties with local tenants

Small

Significant

Significant

Large

Small

Significant

Large

Small

Red entries indicate change from 3 months ago to a higher-risk rating Blue entries indicate change from 3 months ago to a lower-risk rating Source: Herron Todd White Month in Review – March 2024, Commercial (Industrial)

client’s residential mortgage tends to come with the commercial [loan], offering brokers opportunities in both segments.

“We’ve had brokers provide feedback that they’ve avoided commercial because it can be too complex. While there can be more complexity than a vanilla home loan, on the whole once you’ve been through the process brokers tend to find that the basics of a commercial deal are very similar to that of a home loan.”

Drummond says an experienced commercial banker at Gateway can support brokers through the process step by step.

Gateway Bank, in keeping with its Pocket & Planet purpose, offers a discounted green commercial property loan and a suite of fixed, variable, P&I and IO commercial property loans, up to $10 million for business owners

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“SMEs are well positioned to adapt quickly, creating more opportunities for brokers to provide support. We’re seeing both SMEs and investors looking for larger, modern spaces to help meet demand” David Smith, Liberty and investors for purchase and refinance with limited cashout.

Wright says brokers who offer a wide range of solutions to their client base will cultivate stronger and deeper relationships while creating new advocates.

“Expanding into commercial loans, and

SMSF loans which support a growing proportion of commercial property purchases, also unlocks potential new revenue streams.”

Thinktank was originally established nearly 20 years ago as a specialist commercial lender, and so it has deep commercial experience, says Wright. It offers education sessions designed to

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COMMERCIAL LENDING GUIDE

empower brokers to successfully diversify into commercial.

The property lending specialist’s product range is available exclusively through mortgage brokers. It includes full, mid and quick doc, SMSF and lease doc options with loan amounts up to $8 million, maximum LVR at 80% and loan terms up to 30 years with no annual reviews or regular covenant compliance requirements.

“We can provide finance solutions for investors, owner occupiers, PAYG, self-employed and SMSFs using retail, industrial, office space and professional suites along with specialised securities such as boarding houses… our loan terms and serviceability requirements are not restricted by a WAULT or WALE,” says Wright.

Whateley says there has never been a better opportunity for brokers to help business customers with their banking needs.

“Higher interest rates and a slowing economy presents both opportunities and challenges for SME owners,” she says. “Because of this they are increasingly choosing the broker channel as their pathway to a lender.”

This provides brokers with a huge opportunity to lend the assistance and advice that SME owners seek. However, Whateley says this comes with responsibility and brokers choosing to work with business customers must have the skills required.

“Mortgage brokers who are considering moving into the business lending space should invest in their own strategy to ensure that their firm has the capability to offer customers the most professional service possible.

“Support for brokers is available from their aggregator and/or industry body, who can provide the necessary guidance.”

Whateley says mortgage brokers should be open-minded about the options on the table, ranging from personally upskilling through to hiring the services of a former business banker.

“Regardless, the customer experience and the matching of the right advice is paramount.”

Smith says having an open mind to try new

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AUSTRALIAN OFFICE MARKET OVERVIEW Q4 2023 Three out of six of Australia’s CBD markets recorded negative demand over Q4 2023 with Australia’s CBD net absorption totalling -58,700 sqm over the quarter

Negative demand and new office completions pushed the national CBD vacancy rate up from 14.2% in Q3 2023 to 14.9% in Q4 2023

Face rents continue to show resilient growth, although this growth was counterbalanced by an uplift in incentives in some CBD markets

There was an uplift in Q4 2023 office transaction volumes ($1.75bn) when compared to the previous quarter ($1.14bn), with signs that the bid ask spread for prime asset sales campaigns has narrowed over the course of 2023

Source: JLL Australian Office Market Overview Q4 2023

“Higher interest rates and a slowing economy presents both opportunities and challenges for SME owners. Because of this they are increasingly choosing the broker channel as their pathway to a lender” Michelle Whateley, NAB approaches and tools will prove vital for brokers looking to unlock options for business customers.

“By embracing the solutions offered by commercial lending, brokers can deepen relationships while expanding the range of customers they can serve,” he says.

As a specialist lender, Liberty has a broad range of commercial solutions which are straightforward and complementary for residential mortgage brokers.

Smith says Liberty’s commercial lending products are highly flexible, with prime, non-prime and low doc choices.

It also offers multiple income verification options and a streamlined application process,

making it easier to gather the required customer information.

“Even when customers have more complex scenarios, the Liberty has the widest credit capacity to provide creative solutions.”

Partnerships with brokers Wright says Thinktank’s relationship manager team has extensive industry experience, and each member is available to provide guidance from workshop to settlement.

“We recommend establishing a partnership with your Thinktank relationship manager and reaching out to them in the first instance.

Engaging with a trusted partner who can quickly workshop a loan application, then take

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“We can provide finance solutions for investors, owner-occupiers, PAYG, self-employed and SMSFs using retail, industrial, office space and professional suites along with specialised securities such as boarding houses” Belinda Wright, Thinktank that all the way through to settlement can make all the difference.”

The Thinktank team also understands the various nuances of structuring required for commercial loans, such as special purpose vehicles (SPVs), trust structures or SMSFs, and can help guide the collection of appropriate information required to support any loan application.

Drummond says Gateway prides itself on its collaborative approach to lending with brokers and maintaining responsive turnaround times.

“This approach is delivered in the commercial space through our broker team and our specialist commercial banker, who works through deals with brokers to help deliver great outcomes for brokers and their clients.”

The bank’s dedicated commercial banker has proved valuable for residential-focused brokers looking to diversify into commercial or those with a commercial opportunity coming across their desk for the first time.

“We’re able to assist with initial assessments and support brokers in delivering for their clients as they gain exposure and experience in the category,” says Drummond.

Gateway has also enabled commercial lending through Apply Online, giving brokers easy and convenient digital lodgement.

Smith says Liberty prides itself on working closely with brokers to quickly understand the needs of customers and any critical timelines.

“Recognising there is often more to a customer’s story than what is found in their credit file, we assess each application on a

case-by-case basis,” Smith notes.

“This ensures we are in a great position to support brokers to achieve better outcomes as the application progresses. Encouraging direct communication with our credit assessors and supported by our experienced sales team, this focus provides real comfort for our business partners.”

NAB is one of the largest commercial property lenders in the market, says Whateley.

“Our large team of BDMs are well versed in our appetite. We have the greatest number of business bankers and spread across all parts of the nation.

“Our bankers hold their own delegated lending authorities and are supported by an experienced specialised credit team who are available to workshop the larger transactions in a responsive manner.”

Whateley says that whether the project involves industrial land, an office complex or a medium-size multi-residential unit development, NAB is a staunch supporter of the broker channel and has appetite for lending to commercial property customers.

Predictions for the next 12 months Smith says he’s confident more brokers will help more commercial customers than ever before in the coming year.

Brokers have continued building networks and referral channels into the business sector and it is up to lenders to “make sure we can support them with this positive momentum”.

“Liberty’s free-thinking approach and consistent performance positions us well to

meet borrowers’ changing needs and work with businesses throughout their growth cycles,” says Smith.

Whateley says ESG considerations will become more prevalent, particularly the carbon emissions of commercial real estate.

“This will be a focus for tenants, purchasers, investors, financiers and will impact valuations,” she says.

Given the housing shortage in Australia, and the recent Housing Australia Future Fund applications, affordable and social housing will also be an active sector.

Looking ahead, Whateley says confidence is expected to rebound when there is more certainty around interest rates, which will create further uplift in activity across the property sector.

Wright says Thinktank maintains the view that interest rates have reached the top of the cycle and momentum is positive for the cash rate to fall in the next 12 months.

“We expect to see stable to good performance in key sectors including industrial, and well supported segments such as childcare and student accommodation,” she says.

“However, due to the flow-on effects of tighter monetary policy, we anticipate some weakness in pockets of retail and strata office.”

Drummond says if the “last few years have taught us anything, it’s making predictions can be a thankless task”.

“That said, much will depend on the interest rate environment, if and when the RBA feels in a position to cut rates and how lenders respond to the predicted cuts will be key.”

If there are, as predicted, two to three cuts in the next 18 months, Drummond says optimism will rise among investors and owners.

“Lenders willing to pass on any rate cuts may be able to win share in this increasingly competitive space.

“If the current trend of growing commercial accreditation continues, more brokers will be able and willing to offer commercial lending to their client base, which will only support growth of the sector.”

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COMMERCIAL LENDING GUIDE SME LENDING

Businesses seek expertise of brokers during tough times Australia’s small businesses have shown their resilience during a difficult economic period. While overall credit demand is lower, SMEs are still reaching out to brokers and lenders to help them grow and navigate challenges

RESILIENCE AND adaptability – these are the traits small business owners must display as they grapple with a variety of pressures.

It’s tough for SMEs in the current economic environment.

Consumer spending is down and interest rates have risen considerably, while burdensome regulations and the higher costs of doing business have also taken their toll.

SMEs are also finding it difficult to secure finance from mainstream banks as their credit appetite for more complex lending wanes.

But in a nation dominated by small and medium businesses, owners have shown they can survive and adapt to new challenges – the recent COVID pandemic being a case in point.

Equifax’s Quarterly Commercial Insights – December 2023 report revealed that overall business credit applications reduced by 0.9% in Q4 2023 when compared to the December quarter in 2022. Business loan applications fell by 4.1%, compared to the December 2022 quarter.

However, non-bank lenders are seeing a rise in SMEs which have adapted to rising interest rates, are wanting to grow and need a range of finance options to do so.

To gauge the SME lending market and the opportunities for brokers, MPA sought the views of two non-banks and an LMI provider:

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Prospa director of sales and partnerships Roberto Sanz, Dynamoney CEO David Verschoor and Helia chief commercial officer Greg McAweeney.

Challenges facing SMEs Sanz says macro-economic factors, including rising operating costs and inflation, are continuing to place pressure on SMEs, which has forced lenders to re-evaluate their credit risk appetite.

“As a result, there has been a decrease in overall business credit applications,” says Sanz. “However, Prospa has seen significant growth in partner engagement, with the number of partners actively submitting leads up 22% year-on-year, which suggests that SME lending demand persists.”

Sanz says in direct response to the challenges contributing to the fall in credit applications, many small business owners may feel their eligibility for finances is

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COMMERCIAL CREDIT DEMAND – DECEMBER 2023 QUARTER 3-month rolling average indexed to Dec-19

Overall business credit applications fell by -0.9% compared to the same time last year

Dec-19 index

Asset finance applications increased by 8.9% compared to the same time last year Dec-19 index

Business loan applications decreased by -4.1% compared to the same time last year

Dec-19 index

Trade credit applications decreased by -0.4% compared to the same time last year

Dec-19 index Dec-19

Jun-20

Dec-20

Jun-21

Dec-21

Jun-22

Dec-22

Jun-23

Dec-23 Source: Equifax Commercial Credit Demand Index – December 2023 Quarter

increasingly complex to understand.

“As a result, SMEs have been actively seeking advice from brokers to navigate these challenges and secure the funding they still demand,” Sanz says.

McAweeney says the decline in business credit demand has predominantly been driven by the construction, retail and hospitality industries.

“This is largely due to the decline in business activity and consumer spending and the rising interest rate environment,” says McAweeney.

“While overall business lending has declined in NSW and Victoria, the recovery of the mining sector has led to an increase in the demand for business credit in Queensland, South and Western Australia, as identified in the recent Equifax Quarterly Commercial Insights (December 2023).”

Verschoor says 2023 was a tougher year for SMEs, with increasing interest rates and the high cost of doing business being major themes,

“With business lending being the second largest lending market in Australia after residential lending, catering to SMEs presents an excellent opportunity for brokers to diversify and expand their business” Greg McAweeney, Helia “but we’re seeing the sector adapt to these challenges”.

“Although the market may have seen falls, Dynamoney has experienced growth thanks to the launch of new products and securing additional funding for more loan capacity.”

SMEs usually maintain more direct relationships with their customers and suppliers, which allows them to work together on mutually beneficial solutions to challenging market conditions.

Verschoor says SME application volumes at Dynamoney have risen this year. “Asset finance solutions and business loans are the most sought after, showing a desire to invest in growing a business rather than refinancing previous loans.”

The non-bank lender has launched its Business Overdraft Mastercard Account, the first business overdraft account to come with an interest-only Mastercard credit card, giving SMEs maximum flexibility when accessing financing.

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Market growth Verschoor says SMEs are adjusting to the new interest rate landscape and looking to grow again.

“We’re seeing increased application volume for a number of our products, and encouragingly, from a wide range of industry sectors spanning transport and renewable energy, through to IT and retail.”

The applications, strongest across business loans and equipment financing, signal that SMEs are investing in expansion and growth instead of refinancing.

Verschoor says SMEs still require simpler access to capital to guarantee free cash flow.

“Dynamoney’s asset finance solution means you can purchase almost any business asset imaginable.”

Sanz says as challenging market conditions persist, Prospa has identified an SME growth opportunity called the Established Small Business segment, for SMEs with at least two years trading and an average monthly turnover of $100,000 plus.

“These businesses are more likely to explore the value of alternative lending through a financial adviser and are generally able to service greater loan amounts,” he says.

“We have attributed an increase in the average loan value of 14.7% written by Prospa Partners, year-on-year, to this segment.

“On top of this, we’re continuing to see a lot of traction within the professional services, retail and hospitality industries.”

As a lenders mortgage insurance provider, Helia currently offers an SME residential product which is being assessed by lenders, says McAweeney. It enables SMEs to use their existing residential property to access funding.

“These offerings can be structured either as a single upfront payment or as a monthly premium, mirroring the approach taken with Helia’s traditional residential LMI.”

Opportunities, partnerships McAweeney says Helia has engaged with a range of business brokers and lender

22

partners to assess the credit requirements of SMEs. This identified a growing demand for enhanced access to credit, allowing banks to broaden their lending capacity by extending limits on LVRs and loan sizes.

“Helia’s collaboration with brokers in the

loans coming soon, just in time for EOFY.” Verschoor says SME financing is built to fit the lives of SME decision-makers, meaning it is decentralised and easy to access, so it’s convenient for business people always on the move.

“Brokers are very accustomed to working

“Prospa has seen significant growth in partner engagement, with the number of partners actively submitting leads up 22% year-on-year, which suggests that SME lending demand persists” Roberto Sanz, Prospa SME lending space expands their market reach and allows them to offer innovative products and services to a wider audience of small to medium-sized businesses to support them in achieving their goals and drive economic growth,” says McAweeney.

Sanz says broker partners can tap into SME finance opportunities by building awareness, creating appetite, and providing access to funding solutions to their network of existing and new self-employed business clients.

“We have a dedicated team of BDMs that get to know your clients’ businesses and provide fast, tailored solutions, and offer resources to help partners find and win more business in the market.

“We understand the value of relationships in finance and the 22% growth in partner engagement, year-on-year, tells us the support we offer to our partners is working.”

Sanz says Prospa remains committed to empowering its partners to strategically engage with clients and grow their business.

“We are continuing to invest in the broker channel, with a new tool to improve and ease the experience of writing of business

with clients in an agile way, so Dynamoney has always invested in developing the most effective online lending platform in the market to fit both client and broker needs.”

Verschoor says the non-bank’s products are listed with most aggregators, and “we are always investing in education initiatives to help mortgage brokers expand into SME lending services”.

“Our lending platform is safe, convenient, fast, easy for brokers to use, and we’re constantly enhancing it, having just added new security and application processes that further reduce loan approval times.”

Loan approvals take a few minutes, and Dynamoney’s large BDM team can help brokers with their applications.

Broker diversification Sanz says SME lending offers brokers an easy path to understanding and writing business loans and building protection around their existing loan book.

He says many small business-owners feel their finances are complex and are more comfortable dealing with a broker than with a bank or finance company.

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“Our lending platform is safe, convenient, fast, easy for brokers to use, and we’re constantly enhancing it, having just added new security and application processes that further reduce loan approval times”

“Leading lenders, like Prospa, provide tailored support and experience-driven advice to help brokers tap into hidden value, creating stickier relationships, and building new revenue streams.”

McAweeney says given the dynamic nature of business lending, brokers can leverage their relationships with borrowers to offer holistic finance support.

He says diversifying into SME lending is compelling for brokers for a number of reasons, including: • expanded market opportunities. There’s a growing demand for financing solutions tailored to suit unique SME needs, and brokers can tap into this large and under-served market segment; • additional revenue streams; • expanded existing client base – many SMEs already have established relationships with brokers for other financial services. By offering SME lending, brokers can deepen these relationships and become a trusted partner for their client’s financial needs; • providing value-added services to their clients beyond traditional mortgage brokerage services; and

David Verschoor, Dynamoney • competitive advantage – brokers who offer SME lending services can differentiate themselves from other brokers solely focusing on residential.

“With business lending being the secondlargest lending market in Australia after residential lending, catering to SMEs presents an excellent opportunity for brokers to diversify and expand their business,” McAweeney says.

Verschoor says the 2.5 million SMEs in Australia are the lifeblood of the economy, making up more than 97% of registered businesses.

“They are looking for faster, easier, safer lending solutions and are seeking the support of finance professionals like brokers to help

BUSINESS CREDIT ENQUIRIES Trade activity metric: February 2020 baseline

Credit enquiries show a seasonal bounce back but are slightly down compared to last year

400 350 300 250 200 150 100

Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24

50

Source: CreditorWatch credit enquiry data, CreditorWatch Business Risk Index February 2024

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them navigate the market,” he says.

Diversifying into SME lending can increase the value brokers can provide to their clients, helping enhance client retention and revenue per contact.

“With a large number of home and property buyers having a small to medium-sized business, the opportunity for brokers to build stronger pipelines into mortgage lending is very real.

“Additionally, successful SME loans maintain upfront brokerage and commission payments for brokers, a consistently strong revenue channel.”

Lending solutions Verschoor says that Dynamoney has a comprehensive suite of working capital and asset finance products for SMEs designed to be better for business, including its new Business Overdraft Mastercard Account.

He says the non-bank can help SMEs with all their financial challenges, from ensuring free cash flow, financing new equipment, covering the cost of overheads such as insurance and accessing capital for growth.

“Our system is built for SME lending, with an experienced team focused on ensuring brokers and customers secure financing as fast as possible.”

Sanz says Prospa has delivered more than $4 billion in funding, helping over 54,000 small businesses manage their cash flow and fund growth opportunities with business loans up to $500,000 and a business line of credit up to $150,000.

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COMMERCIAL LENDING GUIDE ASSET AND EQUIPMENT FINANCE

Growing demand spurs opportunity SMEs are increasingly looking to brokers and their lender partners for assistance in accessing loans to fund asset and equipment. MPA sought the views of experts in this sector to learn more about the market

IT’S FAR too early to say when the asset and equipment finance sector will return to full health, but there are signs that a recovery is brewing and more opportunities await brokers and their customers.

Equifax’s Quarterly Commercial Insights Report showed that asset finance applications had risen 8.9% in the December 2023 quarter compared to the Q4 2022.

That was a much better result than business loan applications, which fell -4.1% in Q4 2023, and trade credit applications, which were down 0.4% Business confidence rose one point to +1

26

in the NAB Monthly Business Survey for March 2024, with signs that supply and demand are coming into better balance with capacity utilisation continuing to ease.

Businesses are still feeling the effects of higher costs and interest rate rises, but non-bank lenders and aggregators are reporting an increase in demand for asset and equipment finance, especially as supply chain problems ease.

To understand the market and how brokers can grow their business in this space, MPA spoke to Blake Buchanan, general manager of SFG; Tom Caesar,

group executive – asset finance at LMG; Ken Spellacy, general manager asset finance, Pepper Money; and Danny Tuttlebee, head of sales at Resimac Asset Finance.

Market trends While there was an uptick in demand for asset finance in Q4, Buchanan says over the longer term growth had been flat or declining for several years prior to the December 2023 quarter.

“So whilst the bump is great news, it is a modest improvement when averaged over a couple of years,” says Buchanan. “It is likely due to people that were holding off on new or replacement assets that had a wait-and-see mentality, with the higher cost of goods and lifting interest rates affecting their choices.

“Having more confidence with the higher cost peak nearly behind us and rate environments easing off usually spurs on activity, which is what we are seeing here.”

Caesar says the industry is experiencing a shift in demand.

“Our [LMG] asset finance brokers around Australia have reported that their SME clients are prioritising cash flow in the current environment, therefore relying more on their borrowing capabilities,” Caesar says.

Business owners have been seeking to de-risk their businesses from any negative economic impacts, such as the uncertainty around interest rates and the general economic outlook.

“They’re keen to strike a balance between cautious optimism and realistic expectations,” says Caesar.

“With recent improvements in the supply chain, access to both equipment and transport assets has been easier than in previous years, and that’s been reflected in healthy levels of enquiry and applications.”

Spellacy says despite the challenging market, Pepper Money is still seeing opportunity across various segments where there is robust demand for financing assets

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such as equipment, vehicles, and machinery.

Several factors are contributing to this demand, including more favourable interest rates encouraging financing activity.

“Some segments of construction and manufacturing are still experiencing growth, and we are seeing general resilience in the mining, agriculture and logistics space,” Spellacy says. “There is also most likely some post-pandemic economic recovery still occurring, with business strategically buying assets to boost productivity and drive growth.”

Tuttlebee says Resimac’s data and feedback reveal that the strong end to 2023 was helped along by record truck sales, up 7.6% on 2022.

“The automotive industry also had record numbers in 2023, with sales surpassing 1.2 million new vehicle sales,” says Tuttlebee.

“This growth has been driven by several things. Continuous government spending in infrastructure is certainly a factor, as well as overseas migration increasing by a third from 2022 to 2023.”

Tuttlebee says early numbers this year already suggest a strong start for the automotive industry, with a continued increase in electric vehicle (EV) take-up, “and

EQUIFAX QUARTERLY COMMERCIAL INSIGHTS DECEMBER 2023 Overall business credit applications reduced by -0.9% (vs December quarter 2022)

Business loan applications decreased by -4.1% (vs December quarter 2022)

Asset finance applications increased by +8.9% (vs December quarter 2022) Source: Equifax Quarterly Commercial Insights: December 2023

Money’s broker partners has always been: “make it easy for me to do business”.

“That feedback sits at the heart of everything we do. Because when our partners succeed, so do we.

“We are clear and consistent about our appetite and service levels, with the aim to provide certainty for our brokers. We offer a broad range of solutions for a wide range of

“SFG brokers experienced significant year-on-year growth and the demand for more asset and equipment accreditations has never been greater.

Our brokers are seeing greater levels of enquiries from new and existing clients” Blake Buchanan, SFG we’re cautiously optimistic about the economic outlook for the remainder of 2024”.

Broker partnerships Spellacy says constant feedback from Pepper

customers, allowing brokers to consider us as a one-stop shop.”

Spellacy says Pepper Money prioritises ease of doing business by implementing intuitive systems.

“Brokers find it straightforward to engage with us. We support the broker through the life cycle of the customer, providing retention opportunities to the introducing broker when a customer is considering buying a new asset, or at key milestones in the contract term.”

Resimac prides itself on its broker relationships, says Tuttlebee.

“We have come a long way in a short period of time and one of the key drivers for this success has been our willingness to listen to brokers.

“We regularly seek broker feedback on our products and services, enabling us to provide better solutions for Australian SMEs that are seeking funding to grow their business.”

Tuttlebee says Resimac made some major product changes late last year, one of which was an increase to funding limits on its Lite Doc product.

“The feedback we received was that trucks had become more difficult to fund. Inflation had driven up prices, and meeting the higher lending requirements meant brokers had to provide full financial analysis solutions through banks.”

The Lite Doc change gave businesses access to those greater loan limits through Resimac simply by using the two most recent activity statements and tax portal statements.

“This is one of many examples where Resimac Asset Finance has developed products off the back of broker needs. One of the benefits of being a lender our size is that we can move quickly when market conditions changes,” says Tuttlebee.

Supporting the growth of its brokers is at the forefront of LMG’s activities, says Caesar.

The aggregator’s extensive events calendar features LMG professional development days, as well as asset finance and commercialspecific PD days.

“We provide brokers with access to a range of online training courses and opportunities to network, upskill and educate themselves in the ever-changing finance industry,” Caesar says.

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LMG also provides its brokers with leading technology solutions, including integration of MyCRM and Nodifi, allowing asset finance, commercial and residential deals to be written and housed in the one platform.

This centralised platform enhances brokers’ productivity, freeing up their schedules to spend more time supporting their clients.

Caesar says LMG’s holistic marketing suite, including email communications, reviews and social media content, not only allows brokers to nurture relationships with clients, but also expand their reach and grow their business.

Buchanan says brokerages are becoming more sophisticated, scaled and diversified, allowing for deeper customer discussions around clients’ more wholistic financial needs.

“Our central learning and development platform, Brokerversity – exclusively available to LMG brokers – also educates brokers so they can diversify into asset finance and commercial finance, successfully” Tom Caesar, LMG “When consumers don’t think something can be done, they don’t do it. When a customer is given credit advice that would be of benefit to them, they will usually act on it.”

Buchanan says SFG brokers experienced significant year-on-year growth and the

ASSET FINANCE APPLICATIONS OVERVIEW, 2023 Q4 YoY change (%) 2022

YoY change (%) 2021

YoY change (%) 2020

9%

9%

5%

AUS

NSW

10%

Vic

8%

17%

QLD

8%

6%

WA

12%

6%

SA

9%

3%

Tas

8%

4%

ACT

4%

8%

1%

4% 16% 0% -4% -4% 12% -7%

Source: Equifax Quarterly Commercial Insights: December 2023

28

demand for more asset and equipment accreditations has never been greater.

“Our brokers are also seeing greater levels of enquiries from new and existing clients.

This points to both an increase in market share but also some consumers who have paused their property finance aspirations to pursue other investments and finance requirements for their business purposes.”

Diversification routes Tuttlebee highlights the value of diversifying for mortgage brokers, with the most obvious route being to provide customers with asset finance solutions, “whether they’re PAYG clients who need a car to get the kids to weekend sports, or it’s the $300,000 prime mover that their truck driver client needs to take on a new and more lucrative contract”.

Resimac, a well-known non-bank mortgage business, did exactly this three years ago when it diversified into asset finance.

“Our initial offering focused on lending solutions in commercial asset finance, but we’re growing our product offering quickly.

We recently launched our mortgage securitybacked short-term business loan (SBL), and later this calendar year will see us launch our consumer product and then move into novated leasing,” says Tuttlebee.

Resimac’s asset finance team has grown nearly 10 times in three years, with several internal account managers and broker

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INGAO

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01/05/2024 10:34:49 am pm 14/2/2024 3:24

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support staff on hand to assist mortgage brokers with moving into commercial asset finance.

This support can include helping brokers with a quote for their clients, packaging together a Resimac deal, walking them through the simplified processes, and providing a deeper understanding of not only the products “but why we may be asking for certain information or paperwork”.

Spellacy says it’s a great time for brokers to consider how they diversify into asset finance and support customers seeking access to asset finance solutions.

“First port of call for a broker should be with their aggregator. Aggregators can provide a broad range of information, training and support to a broker looking to diversify. Many aggregators offer different customer application pathways like spotand-refer programs.”

Spellacy advises brokers to familiarise themselves “with the asset types that your customers will require”.

Many residential mortgage customers may be considering an EV, so brokers need to become experts in this fast-expanding segment.

“Commercial clients will often require equipment finance on a regular basis, so it’s worthwhile understanding how you can best support them across their changing needs,” says Spellacy.

“Gradually start to introduce asset finance into your business and build out strong customer processes and journeys to ensure your customer is getting a great experience.”

Buchanan says that when it comes to diversification, SFG “takes the approach of education, connections and strategy”.

“Education empowers brokers with what can be done and identifies the opportunities that are within their current model, along with the open market.

“Connections is about the right partnerships with the right people and providers.

The strategy is about planning, implementing

30

and making sure you have the right structure to execute against that and steer you towards your goals.”

Buchanan says SFG operates a busy education program at specific commercial and asset PD days, conventions and other events such as webinars and content libraries.

“It is one thing to know about it, but how you implement it is equally as important.

This is where we take an individual approach with our members to assist them with their plans and implementation around business growth, improvements and diversification.”

insights from LMG experts.

Integrations with MyCRM and Nodifi create a “single source of truth to give brokers a 360-degree view of their customers across residential, commercial and asset finance on the one platform”.

Growth trajectory Caesar says any cash rate movements will affect borrowing costs and influence market sentiment.

“In the next 12 months, various factors will influence growth in asset and equipment

“We support the broker through the life cycle of the customer, providing retention opportunities to the introducing broker when a customer is considering buying a new asset or at key milestones in the contract” Ken Spellacy, Pepper Money Caesar says LMG supports brokers to diversify into asset and commercial finance in multiple ways.

Its newly created Referrer to Writer program is an intensive course for residential brokers who are currently referring asset finance deals but want to transition to writing their own.

The program is facilitated by the knowledgeable business success managers (BSMs) of LMG Asset Finance, helping brokers to build the capacity to write those deals internally.

“Our central learning and development platform, Brokerversity – exclusively available to LMG brokers – also educates brokers so they can diversify into asset finance and commercial finance, successfully,” says Caesar.

The library of online courses and webinars provides demonstrations and best practice

finance and the impacts will be different across separate sectors. For instance, in agriculture, farm equipment financing could see growth due to advancements in technology, the need for modernisation and recent seasonal conditions,” he says.

In the mining sector, demand for equipment finance may rise with increased exploration and extraction activities.

“We’ve seen dealerships offering discounts on vehicles and that could stimulate growth in the automotive sector,” says Caesar.

“Government incentives for the purchase of electric vehicles could encourage increased financing demand.”

Buchanan says broker market share will continue to grow in this sector, as a direct result of brokers continuing to upskill and diversify.

He says the general easing of costs with inflation coming down, the costs of goods

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01/05/2024 10:35:04 am

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FEATURES

COMMERCIAL LENDING GUIDE

BUSINESS LOAN COMMITMENTS – SMEs, EXCLUDING REFINANCING Other**

Purchase of property

Working capital

Plant and equipment

Construction

$b

$b

12

12

9

9

6

6

3

3

0

2019

2020

2021

2022

2023

2024

0

Note: Fixed term loans, not seasonally adjusted. Other** – includes wholesale finance, acquisitions and general business purposes Source: RBA, The Australian Economy and Financial Markets Chart Pack, March 2024

“We recently launched our mortgage security-backed short-term business loan, and later this calendar year will see us launch our consumer product and then move into novated leasing” Danny Tuttlebee, Resimac Asset Finance easing and more cash available due to tax reform will result in increased consumer confidence and capacity to purchase.

“This will of course result in higher activity and more financing of goods in the near term.”

The EOFY will also trigger activity as

32

businesses either fit new purchases into the current tax year or wait to acquire equipment in the new financial year.

“Brokers should be prepared for this and be proactive with their client communications to make sure they are at the forefront of their clients’ minds for these inevitable

purchases,” Buchanan says.

Tuttlebee says in the forthcoming year, asset and equipment finance are poised for growth in certain areas. Several factors will be instrumental in shaping this growth – most notably the focus on reducing carbon emissions.

“Electric vehicle sales have surged, nearly tripling in growth between 2022 and 2023.

This emphasises a groundswell of interest in cleaner transportation solutions,” he says.

Tuttlebee says government spending on infrastructure projects is expected to remain robust. However, the asset finance industry is not completely out of the woods just yet, with larger construction companies – which previously drove a sizeable portion of sales in this market – still grappling with the repercussions of the pandemic, he says.

“The good news is that construction is going to pick up again soon. Housing shortages and a growing migrant population means the demand for property is only going to get stronger, and this will drive a steady flow of new construction projects.

“Businesses that win the tender for these upcoming projects are great candidates for asset finance solutions.”

Spellacy says new car sales serve as a strong barometer for the industry’s health.

“We continue to witness remarkable records being set for car sales. Nine of the last 12 months have been a record for new car sales, which is an indicator that the supply constraints the pandemic caused have gradually eased.”

EV and hybrid sales also outperform expectations, says Spellacy.

“As we fast approach the end-of-financialyear period, the impact of the tax write-off scheme will come into play.”

He says although the current tax write-off scheme is less favourable than in 2023, “we are seeing some significant improvement in other factors, such as interest rates easing, and inflation being at lower levels compared to the same period last year”.

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BROKER PARTNERSHIPS

App unlocks property potential, builds links Aussie’s new mobile app provides customers with smart, easy access to property values, equity and loan details and drives engagement with brokers, says Lendi Group chief product officer Travis Tyler

IN A WORLD of smartphones, everyone wants instant access to services and information.

We do everything on our mobiles – banking, paying bills, booking travel, restaurants and tradespeople, as well as using them like modern day encyclopaedias for whatever we need to know.

In a nation obsessed with buying and selling homes, it’s no surprise that people want property data at their fingertips.

Aussie Home Loans, part of the Lendi Group, has now launched an Aussie mobile app that allows customers to keep track of

34

equity, their credit score, the value of their home, properties they are considering, as well as their loan finances.

Lendi Group chief product officer Travis Tyler explains to MPA the features and benefits of the Aussie mobile app for customers and brokers, the smart technology behind it, what brokers think of the app and what future enhancements are planned.

What drove the project Tyler says Aussie realised there was no simple way for Australians to visualise the value of their home or investments.

“We know that over 95% of Australians use a smartphone, and we could see high visitation to our website and usage of our platform from mobile traffic,” says Tyler.

“This tells us that there was an opportunity to meet our customers where they are with an aesthetic, functional, mobile-optimised experience. So we set out to create a tool that allows first-time buyers, homeowners and tycoons alike to unlock their property potential.”

Tyler says Aussie is excited to be facilitating a new wave of digital engagement for brokers and customers, and putting property ownership within reach of more Australians.

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01/05/2024 12:29:42 pm

Sponsored by

He says previously there was no single experience that allowed homeowners and buyers to monitor the value of their property, or properties they’re interested in purchasing, or visualising the equity they’ve built.

“The Aussie mobile app allows customers to gain insights into the property landscape and effortlessly manage their home value, equity and loan finances in one place.

“The app helps users to better understand their financial position, and then seamlessly connects them with their local Aussie broker to act on it.”

lators, check the status of their loan application, track their credit score, and book an appointment directly into a broker’s diary with a choice of how they meet – phone, video call, or in-person,” says Tyler.

The app empowers customers to make smart financial decisions in a secure and convenient way. Featuring a clean interface and simplified mortgage terminology, the app is easy to use and navigate, Tyler says.

“Customers can also be assured that their personal information is safe, with secure two-factor authentication and face ID login.

Benefits for customers

Benefits for Aussie brokers

There’s a range of advantages that the app provides, says Tyler.

“New buyers can use the app to gain instant

“With the Aussie mobile app, our brokers businesses are now in the palms of their customers,” says Tyler. “The app presents our brokers with a

“The Aussie mobile app allows customers to gain insights into the property landscape and effortlessly manage their home value, equity and loan finances in one place” Travis Tyler, Lendi Group access to nearly 11 million properties, build a wish list and keep tabs on crucial property data during their search, including value estimates, rental yields and purchase history, which provides leverage for offers and price negotiations.”

Investors can also track fluctuating property prices, which provides insights on the rental market and the financial health of and return on investments.

Tyler says property owners can discover the worth of all their properties in real time and enlist their broker to help unlock available equity to fund their next purchase or renovation.

Savvy customers can even take control of the home loan application process. The app also facilitates ease of broker-customer engagement “like never before”.

“Customers can now access home loan calcu-

new way to introduce customers into their world and build relationships in the digital age.”

Lendi Group’s multi-channel distribution model gives customers choice in how they engage their broker, and with the app “we’re expanding the breadth of choice and paving the way for even stronger, easier connection”.

Tyler says allowing customers to visualise their equity position opens additional business opportunities for brokers.

Features such as e-consent, document upload, and application tracking also minimise administration and follow-up, streamlining the appointment preparation and loan application processes.

“Reducing communication barriers and manual handling will add capacity into our brokers’ businesses so they can direct their attention to creating exceptional service experiences and driving revenue,” Tyler says.

TOP FEATURES OF AUSSIE APP The app allows customers to: Build a property wish list

Access key data such as value estimates, rental yields and purchase history

Discover the worth of their properties in real time

Book a broker appointment to access support or unlock equity

Utilise home loan calculators

Check the status of their application

Broker, customer feedback Tyler says following a soft launch in February, early signs point to the Aussie app being a winner for all involved.

“Our brokers have embraced the app with enthusiasm, embedding it into their sales processes, while strong review scores across Apple and Android indicate our customers are very receptive to the new value we’re delivering.”

One customer review says: “I have been keeping track of my property portfolio via a spreadsheet for the longest time, so I’m glad to find a tool to do this for me.”

Nathan Misell, franchisee at Aussie Blackwood, Mount Barker and Palmerston in the Adelaide Hills, says having direct broker input as the app evolved ensured the app would remain relevant.

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01/05/2024 12:29:48 pm

FEATURES

BROKER PARTNERSHIPS

“The app is going to provide our customers with a huge amount of benefit and allow us as brokers to ensure that our clients are in the best financial position that they can be in, not only now but into the future,” Misell says.

“I’m excited to see further enhancements and features that the app can provide to our current and future customers.”

Senior Aussie Mobile broker Samantha Harvey says she can see the app supporting her business “by delivering knowledge to my clients, keeping my services front of mind, facilitating more meaningful conversations, and saving me time by having more informed customers”.

“The exciting part is that this is just the beginning,” Harvey says. “As it is, the app offers so many benefits, but with Aussie’s vision of continuous improvement and innovation, it’s going to be a game changer for brokers and customers.”

Tech design The core product development team for the app consisted of two engineers, one designer and one product manager, says Tyler.

“This small, tight-knit team allowed us to move with great agility, hypothesising, testing, and learning at lightning speed.”

Many other parts of the Lendi Group also supported the app’s development, including

“Our brokers’ businesses are now in the palms of their customers. The app presents our brokers with a new way to introduce customers into their world and build relationships” Travis Tyler, Lendi Group distribution, operations, risk and compliance, and legal teams.

Tyler says brokers, who are well attuned to customers’ needs, also played a core role in the development phase.

Top-performing brokers from the Signature Program were key consultation partners during the design and build.

“The app was piloted with 72 brokers across the country over a three-month period, where their valuable user insights supported us in optimising the product for launch,” says Tyler.

“The product discovery phase ran for six months, as we built, deployed, and validated our first concepts with brokers and prospective users.”

The first beta-app version was delivered in September 2023.

“Since then, we’ve continued to refine and iterate, evolving the Aussie mobile app into a customer-ready digital experience which went live on the Apple and Google Play app stores in February 2024.”

Future enhancements Tyler says there are plans to enhance the app, based on broker and customer feedback.

“We’ve already got exciting updates in development, including push notifications that will serve relevant updates at crucial touchpoints in the customer and homeownership life cycle, allowing brokers to connect with customers in a new way.

“In the future, we plan to add open banking for real-time loan balances and interest rates.”

BROKERS APPLAUD AUSSIE MOBILE APP

“

“

Nathan Misell, franchisee, Aussie Blackwood, Mount Barker and Palmerston

Samantha Harvey, Senior Aussie Mobile Broker

The app is going to provide our customers with a huge amount of benefit and allow us as brokers to ensure that our clients are in the best financial position that they can be in, not only now but into the future

I S S

H

W a w e

• • • • • • • •

N n

I can see the app supporting my business by delivering knowledge to my clients, keeping my services front of mind, facilitating more meaningful conversations, and saving me time by having more informed customers

S o

B

F w S t

36

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SPECIAL REPORT

COMMERCIAL BROKERS 2024

Australia’s Top 30 commercial mortgage brokers are rewriting the rules of success and client engagement

CONTENTS

PAGE

Feature article .............................................. 40 Methodology ................................................ 41 Winner’s profile ............................................ 44 Top Commercial Brokers 2024 ................. 46

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01/05/2024 2:11:19 pm

SPECIAL REPORT BUSINESS STRATEGY

TOP COMMERCIAL BROKERS 2024

BROKERS ON THE RISE THE ACHIEVEMENTS of MPA’ s best commercial mortgage brokers are even more remarkable, especially as economic factors have constrained the commercial sector.

The Top Commercial Brokers in Australia in 2024 rose to the past year’s challenges, writing a minimum of $57 million in commercial loan settlements to crack the ranked list of 30.

“In the commercial and asset space, communication is a must, as is building strong, long-term relationships with clients by understanding their unique business needs and providing solutions,” says outsource Financial CEO Tanya Sale. “This

will be a major part of a broker’s success.”

Industry experts named in the 2023 Mortgage Global 100 list shared the necessary skills and attributes that make MPA’s Top Commercial Brokers stand out: • deep understanding of client objectives • broad industry knowledge, including how economic, social and political factors influence the commercial space • connections to lending partners • adoption of digital solutions to enhance efficiency and client experience • recruitment of specialists to their team to manage clients’ diverse interests

LOAN TRENDS AMONG TOP COMMERCIAL BROKERS IN THE PAST TWO YEARS Median value of loans settled among top brokers

Highest number of loans settled by a broker

$122,804,500

201

$124,002,050

195

Value of top broker’s loans

Number of loans written by top broker

$694,003,860

71

$471,013,185

130 2022

40

2023

Top Commercial Brokers’ Secrets of Success

“Stay close with your clients.

Development finance and commercial loans are both long-term relationship-focused.

You need to grow with your clients” Thomas Tang, AUSUN Finance AFG’s head of sales and distribution, Them Lam, remarks that the market is again seeing a shift in debt limit thresholds, requiring bankers on the ground for small and medium-sized businesses.

However, because major lenders have received criticism for under-servicing this market, their lighter touch has created an opportunity for commercial brokers to strengthen their value proposition.

Lam says, “Brokers are rapidly becoming

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01/05/2024 10:39:33 am

FROM THE SPONSOR

Cory Bannister Chief Lending Officer La Trobe Financial

La Trobe Financial congratulates Mortgage Professional Australia’s Top Commercial Brokers for 2024.

This annual recognition of high-performing brokers emphasises the contributions they have made not only within our industry but, importantly, within the local communities of everyday Australians who are looking to navigate the commercial lending landscape guided by a quality mortgage broker.

La Trobe Financial empowers brokers with industry-leading commercial solutions that are easy to use

the human touch point as lender banking models adapt.”

With an average of just under six years in commercial broking and some industry veterans writing the lion’s share of loans, 2024’s top brokers harness their diverse experiences to create a more robust and resilient mortgage landscape.

For Wendy Brown, Macquarie Banking and Financial Services executive director and head of broker sales, top-performing brokers also create a high-performance culture around them.

“Whatever the task, it is ensuring everyone

and remove the barriers to entry.

Our product range is unmatched in depth and breadth within the non-bank sector, which makes us a partner of choice for commercial brokers across the country.

We congratulate all of the Top Commercial Brokers for 2024 on their significant achievements; they set a benchmark of excellence that deserves to be celebrated, and we wish them continued success in the years ahead.

that. No matter who completes the tasks, it’s about the responsiveness of the team and never losing sight of the client’s needs.”

Thomas Tang – AUSUN Finance Rank #1, Victoria Perseverance and a passion for building long-term relationships with clients and the broader community have fueled the brokerage co-founder and partner’s steady rise to MPA’s top spot.

While Tang notes that timing was a factor in an extraordinarily successful year due to the start of four large-scale

Top Commercial Brokers’ Secrets of Success

“Focus on one deal at a time and don’t underestimate small transactions as they can lead to growth. Those little wins are personally rewarding and positively impact clients’ success” Martin Kennedy, Quantaco Capital in the team knows the important role they play in delivering for the business,” Brown says. “Ultimately, customer outcomes matter, and it’s always a combined effort to achieve

development projects, his hands-on approach to understanding his clients’ needs and delivering the solutions they need to achieve their goals has allowed his expertise to shine.

METHODOLOGY To find and recognise the Top Commercial Brokers for 2024, MPA invited brokers from across the country to submit their figures from the past year. The online form asked for details such as the total value of commercial loans settled, the number of commercial loans settled and the proportion of loans in the following areas: commercial real estate, equipment and asset finance, SME lending, debtor finance, unsecured business lending and development finance.

Brokers also supplied information such as the number of support staff on their team, their number of years as a commercial broker and their aggregator details. Aggregators were then required to verify the details submitted.

The final ranking of the Top 30 brokers was based on the total value of commercial loans they wrote during the 12-month period.

He says, “I invested my own money in a client’s project to gain practical experience, even though it is risky, but that’s the way to learn.”

A profound dedication to learning about the development process has positioned Tang as a trusted and respected authority among potential commercial and developer clients.

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SPECIAL REPORT BUSINESS STRATEGY

TOP COMMERCIAL BROKERS 2024

TOP COMMERCIAL BROKERS BY STATE

Qld SA

1

10 NSW

13 Vic

6 Top Commercial Brokers’ Secrets of Success

“The commercial sector is highly specialised, and success lies in surrounding yourself with knowledgeable bankers and mentors” Son Pham, Rethink Financing He has gained a competitive edge by: • investing significantly in industry-specific education and credential-building • prioritising clients who share his mindset and approach

42

“You need to be a true adviser – knowledgeable, honest, upfront, professional and firm. I don’t want to be treated as the sales guy. If the project or property doesn’t make sense when you do the financial modelling, it speaks for itself that clients should reconsider whether to go ahead,” Tang says.“Wvents.

Martin Kennedy – Quantaco Capital Rank #3, New South Wales The executive director’s journey to being celebrated as a Top Commercial Broker began just four years ago, after he segued from a successful banking career to establishing the brokerage.

“I’m loving broking more and more every year,” he says. “I’ve got an industry-specific focus on hospitality clients and also property developers and investors, based on the core strengths of what I learned in banking.”

As the sole deal originator and loan writer at Quantaco Capital, Kennedy has a bird’s-eye view of industry trends, particularly from the vantage point of the high volume of deals that come through the brokerage.

“We tend to be able to highlight things earlier than others because we have direct

access to the wider business, which is a powerful value add,” says Kennedy, adding that the broader Quantaco business is solely focused on industry-specific bespoke technology and accounting for clients.

Through the broader Quantaco business, he has honed several strategies that resulted in his rapid rise to the top of MPA’s list: • leveraging real-time data to help with valuation models, current value trends and clients’ business statistics • making a significant investment in technology, including accessing a digital team of 20 that develops proprietary tech stacks and a client user interface that refreshes every 15 minutes • following a client-centric approach that puts them at the forefront of every decision “We’re trying to educate all our clients as much as possible and use their data so that they stay focused on their current cost base in line with current revenues and not historical costs,” Kennedy says.

“We pressure test things with our clients, particularly on the digital side, about what they want to see more of and what could be valuable to them on the app.”

Kennedy and the Quantaco team also prioritise staying abreast of lending policy and risk appetite changes and regularly attending partner-sponsored events.

Post-pandemic challenges are lingering, Kennedy asserts, which has caused banks to be more internally focused and, consequently, require more compliance checking and slower turnaround times.

That has resulted in increased reporting from the broker side and heightened attention to proactive communication with all clients.

He says, “The key point is always keeping our clients regularly updated and pushing things along as fast as we can.”

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Top Commercial Brokers’ Secrets of Success

“Being successful is not overly complicated; find a mentor who has experience and is well respected and learn everything you can from them” Petro Trianta, Podium Money

Son Pham – Rethink Financing Rank #4, New South Wales In the competitive commercial landscape where no two deals are the same, the managing director stands out for his positive, can-do attitude and commitment to treating every client equally, regardless of financial situation.

“I firmly believe in keeping an open mind and continuously learning,” says Pham. “Building strong relationships with excellent bankers is crucial, and taking care of your staff is paramount because everything else tends to fall into place when they’re happy and supported.”

The ability to adapt to changes in the dynamic commercial mortgage market is deemed essential by experts, and Pham emphasises as indispensable the need to: • cultivate close relationships with key stakeholders, including banks, lenders and BDMs • remain active in mortgage associations to stay informed Pham says, “Policies shift frequently, new

products emerge regularly and regulatory changes are always looming. Staying at the forefront of these developments is critical to staying relevant in our field.”

Upon reflection of the past 12 months and how his role has changed, Pham notes a significant uptick in demand for his services.

He has expanded his team by hiring two additional brokers and more support staff.

Pham says, “With the residential market taking a hit, we’ve noticed more clients transitioning to the commercial space, necessitating skilled and specialised brokers. Consequently, my role has evolved; there’s less emphasis on writing deals and more on mentoring and strategising for the business’s growth.”

Now a mentor to several mortgage brokers recognised as rising stars in the industry, Pham shares his resolve to continue pushing forward and never hesitates to ask questions.

He says, “Each deal is unique.

Understanding your client’s needs thoroughly will yield significant dividends in the long run.”

Petro Trianta – Podium Money Rank #6, Victoria A team with experienced specialists focused on various facets of the brokerage has been the primary catalyst for the managing director’s growth and success.

“Rather than trying to be a generalist broker, we have skilled people dedicated to different areas, such as construction and development funding, commercial property purchases, cash flow and equipment finance,” Trianta says.

The commercial side of the business has experienced significant growth, driven by a shift in bankers and other finance professionals from traditional roles to private companies or to become brokers themselves, as well as opportunities arising from clients looking to form a relationship with the full-service Podium Money.

“We’ve focused on understanding our customers and spending time to get to know them,” Trianta says. “The customer feedback has been great.”

Trianta prioritises a client-centric strategy that ensures an exceptional experience and satisfaction, along with the following: • networking with industry specialists to keep informed and stay current • sharing ideas and knowledge with colleagues to improve processes • hiring support staff to maintain high-quality service As Trianta’s business expands, his role has shifted to developing new growth opportunities and sourcing new lender partners, including building relationships with alternative lenders.

He says, “Especially in the development space, having a suite of new lender offerings allowed us to place transactions that we may not have done 12 months ago.”

Industry expert Simon Bednar, CEO at Finsure, highlights Trianta’s diversification strategy as essential to commercial broking success.

“Recruiting specialists in the team to manage different interests of the client will help a commercial broker stand apart from their competitors and create a one-stop-shop for their clients,” he says.

INSIGHTS As part of our editorial process, Key Media’s researchers interviewed the subject matter experts below for their independent analysis of this report and its findings.

Simon Bednar Chief Executive Officer Finsure Tanya Sale Chief Executive Officer outsource Financial Them Lam Head of Sales and Distribution AFG Wendy Brown Executive Director and Head of Broker Sales Macquarie Banking and Financial Services

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SPECIAL REPORT BUSINESS STRATEGY

TOP COMMERCIAL BROKERS 2024

Cory Bannister of La Trobe Financial with Top Commercial Brokers 2024 winner Thomas Tang of AUSUN Finance

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THOMAS TANG

L

uck, immersion in the commercial finance world and close customer partnerships – these are the ingredients that have led to AUSUN Finance co-founder and partner Thomas Tang’s success.

Tang, the winner of MPA’s Top Commercial Brokers for 2024, settled more than $471 million across 130 loans, almost double the number of loans settled by the 2023 winner.

In terms of his strategies for success, Tang highlights that 2023 was a “lucky year” for him. He successfully structured construction loans for four large property development projects, which were coincidentally all approved and started construction in 2023, following delays due to COVID-19.

“Immersing yourself in the community and staying close with your clients is also important,” he says. “Development finance and commercial loans both require a focus on long-term relationships. You need to grow with your clients. Sometimes a development project can last for three to five years or longer.”

Tang’s big projects in 2023 included a 511-lot land subdivision in Queensland, a 100-apartment high-rise complex in Melbourne, a mixed-use development in Melbourne and a build-to-rent hospital office complex in Victoria.

He took part in a joint venture with the developer of the subdivision, investing his own money as a small shareholder. This approach, he explains, allowed him to be “truly invested in the project and its journey.”

Tang also spent money on learning about the construction development process, completing courses at government and private institutions including project management, site management, design management and a builder’s diploma.

“I basically made myself a developer to learn development finance,” he says. “That sets me

Co-Founder and Partner AUSUN Finance up as an authority when I coach first-time developers’ clients, and my experience becomes very appealing in this segment.”

It was important to Tang that he wasn’t a “lending manager” who gave developer clients a checklist but didn’t understand what the documents meant.

When it comes to staying updated on commercial finance sector trends, his mantra is “always learning, walking the walk, as well as talking the talk.”

Tang underscores the significance of advisers attending as many industry updates as possible.

He says, “Network, learn from others, sign up for courses and become a subject matter expert.”

Tang notes that banks have lost market share in the property development market due to their requirements for 100% pre-sales, opening up opportunities for non-bank lenders.

Additionally, he mentions that his portfolio and capacity have grown with “good clients,” who then refer other good clients that share the same corporate approach.

Having limited time means careful selection of clients is required.

“You must let some of the ‘bad clients’ go; these are ones who do not respect your time, who shop around and who are not willing to be educated,” says Tang.

Tang offers the following tips for aspiring commercial brokers who are keen to achieve success:

professionals. Networking is crucial for leads, referrals and staying updated on market trends.

• Stay educated: Real estate markets are constantly evolving. Stay informed about market dynamics, regulations and trends through continuous learning.

• Embrace technology: Use technology tools and platforms to streamline processes, market properties effectively and stay connected with clients.

• Provide exceptional service: Focus on delivering exceptional customer service by understanding clients’ needs, providing timely and accurate information, offering creative solutions.

• Be persistent and resilient: Success often requires perseverance and resilience. Rejections and setbacks are inevitable, but maintaining a positive attitude and learning from failures help you grow and succeed in the long run.

• Adaptability: Be adaptable to changing market conditions and client preferences. Flexibility and willingness to embrace new strategies will keep you competitive.

$471,013,185

Total value of loans settled

• Develop expertise: Specialise in a particular sector or type of commercial real estate, such as retail, office spaces or industrial properties. Deep knowledge and expertise set you apart.

• Build relationships: Cultivate strong relationships with clients, property owners, investors and other

130

Total number of loans settled

8

Number of years as a broker

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SPECIAL REPORT BUSINESS STRATEGY

TOP COMMERCIAL BROKERS 2024 COMMERCIAL BROKERS 2024 1

Thomas Tang Co-Founder and Partner AUSUN Finance

2

Jean-Pierre Gortan Managing Director Simplicity Loans & Advisory

3

Alex Stalder Associate Director STAC Capital

17

Jack Punch Director Tesoro Financial Email: jack@tesorofinancial.com.au Website: tesorofinancial.com.au

18

Leigh Blain Associate Director STAC Capital

19

Katie Liu Director and Co-Founder JKK Solutions Phone: 0433 682 337 Email: katie.liu@jkksolutions.com.au Website: jkksolutions.com.au

20

Jonathan De Sensi Director Marquee Group Phone: 0423 822 055 Email: jd@marqueegroup.finance Website: marqueegroup.finance

4

Son Pham Managing Director Rethink Financing Phone: 02 9821 3483 Email: son@rethinkfinancing.com.au Website: rethinkinvesting.com.au

5

Isabella Constantinou Sales Director Simplicity Loans & Advisory

6

Petro Trianta Managing Director Podium Money Phone: 0432 616 722 Email: petro@podiummoney.com.au Website: podiummoney.com.au

21

7

Daniel Green Director Green Finance Group

Kevin Wheatley Managing Director Bayside Residential and Commercial Mortgages

22

8

Mark Churchill Managing Director Allfin

Dale Sparke Managing Director STAC Capital

23

Jeff Pang Managing Director Reginsun Group

9

Tom Waltham Managing Director Capital United Phone: (08) 7231 8700 Email: tomw@capitalunited.com.au Website: capitalunited.com.au

24

James Kelder Finance Consultant Green Finance Group

25

10

Ben Henri Director Atmosphere Capital Phone: 0434 474 154 Email: ben@atmospherecapital.com.au Website: atmopsherecapital.com.au

Anthony Arida Associate Director – Sales Simplicity Loans & Advisory

26

Angus Chrisp Finance Broker and Debt Specialist Balanz

27

Darren Coff Managing Director Investure

28

Michael Wasef Senior Finance Broker Ontime Finance Phone: (02) 8318 5951 Email: michael@ontimefinance.com.au Website: ontimefinance.com.au

29

John Oakley Associate Director – Sales Simplicity Loans & Advisory

30

Barry Thatcher Director Thatcher Finance

11

46

Martin Kennedy Executive Director – Capital Advisory Quantaco Capital Phone: 0418 379 232 Email: martin@quantaco.co Website: quantaco.co

16

Zac Mircevski Director Hedge Finance Group Phone: 0438 108 108 Email: zac@hedgefinance.com.au Website: hedgefinance.com.au

12

Abdul Osman Director Balanz

13

David Pruscino Associate Director – Sales Simplicity Loans & Advisory

14

Craig Laws Managing Director Nexus Capital Partners

15

Xiaoyang (George) Sha Director Balanz

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FEATURES

NON-MAJOR BANKS ROUNDTABLE

BANKING ON GREAT RELATIONSHIPS WITH BROKERS 48

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The importance of brokers to their business model is front and centre for non-major banks. They are investing in better technology, streamlined processes, highly skilled staff and flexible lending solutions to deepen their partnerships with brokers and help their customers achieve their financial goals

LISTENING AND acting on brokers’ feedback is vital to the strength and success of the non-major bank sector.

Second-tier banks rely heavily on the third party channel to provide a steady source of lending for their business.

In a highly competitive lending market, brokers are leading the charge over the direct to customer segment. Broker market share is at a record high, with the MFAA reporting in April that 71.8% of all new residential home loans were written by brokers in the December 2023 quarter.

Non-major banks have taken a proactive approach to broker relationships, working closely with them to assist thousands of customers as they roll off low fixed rates onto higher variable rates.

They are also building new tech platforms and investing in staff to ensure the entire lending process is efficient, fast, easy to use and meets the needs of brokers and their customers.

Retention is the key and this can be achieved by consistently delivering for brokers and clients.

Non-major bank leaders know that growth and success can’t be reached without the buy-in of brokers and that’s why they are keen to work with them and gain their feedback.

MPA invited third party leaders from leading non-major banks to join its annual industry roundtable at Sydney’s Silks restaurant. Attending the event were Troy Fedder (Suncorp Bank); Paul Herbert (AMP Bank); Johnny Lockwood (BOQ Group) and Ian Rakhit (Bankwest). George Thompson of ING Australia was unable to be there in

person, but provided his comments in writing.

Two brokers also attended – Deborah Brincat from Aussie Parramatta and Stephen Michaels of Catalyst Advisers.

Non-major banks faced a number of challenges in 2023, including rising interest rates and inflation and the fixed rate cliff. How have you dealt with these and other challenges, especially in partnership with brokers?

Troy Fedder, acting executive general manager of home lending at Suncorp Bank, agreed that 2023 presented a number of challenges for the industry.

“It also had some tailwinds,” Fedder said. “I think one of the great things for the broker industry is, regardless of challenges, the broker model continues to shine.

“For Suncorp Bank, the word partnership is really important – the fact that as a non-major, you can genuinely partner with the broker community to look after our customers.”

Fedder said in an environment of rising interest rates “we should acknowledge that some customers are doing it tough”.

“I’ve been really grateful to witness how Suncorp Bank’s relationship with brokers has continued to grow over the past few years. The volume of brokers we work with has helped grow our customer base and allowed us to provide better outcomes for our customers.”

Johnny Lockwood, BOQ Group general manager broker and strategic partnerships, said there had been 13 interest rate rises since May 2022, with a lot of fixed rates maturing, and brokers had helped customers deal with these challenges.

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FEATURES

NON-MAJOR BANKS ROUNDTABLE

THE PANELLISTS Bankers

Troy Fedder Acting executive general manager of home lending, Suncorp Bank

Brokers

Paul Herbert Johnny Lockwood Head of intermediary General manager broker distribution and finance, and strategic partnerships, AMP Bank BOQ Group

“A lot of customers out there may not service with other banks, so it’s important for us to continue to honour both customer relationships and broker relationships,” Lockwood said.

This meant having good retention policies and assisting customers to deal with rate rises.

Lockwood said BOQ Group had been proactive in educating customers about what fixed rate maturities meant for them.

“We’ve got navigation hubs, we’ve got a lot of proactive engagement with customers to help them understand their options.”

The lender also reached out to customers at risk of hardship “to smooth the landing for them”.

Lockwood said it was important for brokers to know that their customers would be looked after.

“I’ve noticed over the last six to 12 months that when a broker asks what are you good at, they want to know about your retention policies.

“It’s not about what’s your lowest rate and then considering another lender in a few years’ time. Brokers want to put customers into genuine, good, and long-lasting relationships.”

AMP Bank head of intermediary distribution and finance, Paul Herbert, said the approach it had taken over the last 12 to 18 months had been to focus on educating customers and brokers.

50

Ian Rakhit General manager third party banking, Bankwest

George Thompson Head of mortgages, ING Australia

“Informing them that this is coming up, this is what we’re going to do, this is what the rate is going to do,” Herbert.

“We’ve been really early with our communications to customers, to give them as much notice as possible to help prepare for the higher interest rate environment. We worked with brokers and customers, ensuring we gave them a competitive rate for that time based on broader competition.”

Herbert said a number of brokers had spoken to AMP Bank about their retention

Deborah Brincat Franchisee, Aussie Parramatta

Stephen Michaels Managing director, Catalyst Advisers

It also meant brokers could have other conversations with customers to determine if they had the right loan structures in place.

“That was a really important step change that we took to support customers through that transition,” Herbert said. “Pleasingly, the roll-off of customers leaving AMP has been quite low through that transition period, as has the arrears.”

While this different approach to customer conversation required more work, Herbert said it had been worthwhile.

“The alignment for non-major banks to work with brokers is brighter than ever. The broker share will continue to grow in the market and for customers that’s a great outcome” Troy Fedder, Suncorp Bank and rollover conversations with customers, explaining exactly what their fortnightly payments would be once fixed rate terms ended.

“It’s all about being clear and upfront in those direct-to-customer conversations that we’ve supported brokers with. We found that had a really positive impact.”

George Thompson, head of mortgages at ING Australia, said the economic uncertainty and interest rate environment had challenged many Australians.

He said from an ING and a broker perspective, they combined on efforts to support and reassure customers.

This included breaking down all the

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information to explain what it meant to the customer, especially those who were facing difficulties, showing customers how ING could assist them and the steps customers could take, and informing them what options were available.

with rapidly rising interest rates, but Michaels found that his brokers hadn’t needed to move clients to different banks for a better deal.

“The banks were very accommodating to the customer, whether it’s a variable rate

“The consistency and service we delivered in 2023 was never more than four days to pick up a file. That’s how you preserve trust and reputation to consistently deliver, so brokers can bank on us” Paul Herbert, AMP Bank “We started reaching out to fixed rate customers last year, following a well-thoughtout process that involved pre-emptively talking to customers about budgeting and other helpful tools,” Thompson said.

“As the time to a fixed rate expiry draws closer, the team makes outbound calls to customers to ensure they have all they need to make a well-informed decision. This important investment helps customers to be best prepared.”

Lockwood said brokers were receptive to banks being proactive in handling fixed rate maturities.

He said in the past these situations involved “some churn”, but if there were extenuating circumstances it meant brokers talked to banks and customers and came up with other solutions.

Catalyst Advisers managing director Stephen Michaels said brokers set up home loans with the aim of not moving the loan for five to 10 years.

“If a broker takes a long-term view on their customer, and we get remunerated by the trail to align ourselves with them long term, you want to place them in the right product at the right time,” said Michaels.

Customers who had taken out home loans between 2021 and 2023 had been confronted

that’s only ever increased as soon as they signed up, or it’s a fixed interest rate that’s expired. There have been very honest and thought-out efforts to give that customer the right rate at the right time.”

Michaels said refinancing inquiries had been high but the number of customers moving from one bank to another had been

below normal. This was because the banks were looking after the customer to retain them long term.

Deborah Brincat, a franchisee at Aussie Parramatta, said there were not many banks that told her when a customer was about to come off a fixed rate.

“So who’s contacting this customer?,” Brincat said. “Is the bank contacting the customer? Or am I, as the broker who gets remunerated for this, contacting the customer?

“I dislike when a customer flicks me an email from a bank to say my fixed rate is coming off – this is the information that brokers need access to.”

Brincat said she wanted to know when a fixed rate was expiring well ahead of time, so she could talk to the customer and have some leeway if problems arose.

“I think the communication piece around fixed rate is interesting, because as a broker, I feel like it’s my responsibility to be in front of my customer and saying your fixed rate is coming off, let’s have that conversation. Are you comfortable? Are you okay? This is the rate that they’ve offered.

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FEATURES

NON-MAJOR BANKS ROUNDTABLE

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REFINANCE MARKET SHARE: NON-MAJOR BANKS VS MAJOR BANKS CY23

61.9% 53.1%

38.1% 46.9% 39.9%

VIC

60.1%

Non-major

64.9%

35.1%

WA

SA

QLD

NSW

Major

62.4%

37.6%

C

M

National

“However, it is difficult to have that conversation if the revert rate is not provided to us.”

Responding to Brincat’s comments, Ian Rakhit, general manager third party banking at Bankwest, said the bank had responded in different ways.

“The first was how do we give the broker all the tools that they need to have the conversation? The visibility in the portal of your customers, the rates that they’ll move to, key dates like fixed rates, and so on.

“I think it makes commercial sense for us to give you that information, as well as relationship-wise. You’re the point of contact for the customer. We shouldn’t need to pay you trail and do your communication to customers, we should respect your relationship.”

Bankwest had also determined which cohort of customers was most at risk, based on serviceability at the time of application and factoring in multiple rate rises.

Rakhit said the bank notified brokers that these customers were not yet in difficulty but they might want to ask them if they were OK. “That’s a better conversation coming from you [the broker] than coming from the bank.”

Bankwest had also looked at broker welfare, because brokers had high work levels through the interest rate cycle and were dealing with stressed customers. The bank had allowed brokers to access its high-quality internal employee assistance program through CommBank, acknowledging that 2023 had been a tough year for brokers.

Looking at the broader market, Fedder said there were a few other dynamics at play.

“Home loan system growth came down in 2023 – the total was close to 4%. In the past, it’s been higher. To see that and to still see broker businesses hold up indicates the growth that brokers continue to enjoy.

“Part of the benefit is that some of those brokers have moved towards non-majors, increasing our flow.”

Fedder said he believed home loan system growth would slowly improve this year, thereby further boosting broker market share.

Y

61.1%

38.9%

CM

MY

CY

Source: PEXA CMY

How did non-major banks protect market share in the face of a highly competitive market? How important is the broker channel to your business?

Herbert said market share was interesting, but “not always the main game”.

He said banks needed to continue to achieve the right margin between the cost of raising capital and lending.

“If you don’t have profitable and successful banks, it affects stability and confidence in the banking system.”

Last year, AMP Bank made some deliberate changes about how it priced for new and existing customers to get the balance right in managing margins.

“To listen, learn and act on the feedback from brokers has always been a central tenant to the experiences we deliver,” said Herbert.

“In 2023, we knew the need to continue to lift service experience was important, supporting brokers as they navigated a challenging year for their customers.”

The bank spent more time working with key brokers to streamline the lending process and assist them and their customers to save time and effort.

“At the start of 2023, we decided to really enhance broker experience and boost the number of people supporting brokers.”

Instead of having a dedicated contact centre, AMP Bank had broker experience staff attached to BDMs, responding to broker’s emails and answering the phone and building up that “repetitive knowledge and relationship”.

“We find that our broker experience team get as many scenarios as our BDMs do, because they’re accessible and have been able to help solve a problem or improve an experience for a broker or a customer.”

“Maintaining broker flows in our business is really important – more than 90% of our business comes from brokers. We’re a broker first business. Every time you do a top up for a broker loan, it might be $10,000 or $20,000, the commission continues to keep rolling through, we don’t intervene or stop that.”

K

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FEATURES

NON-MAJOR BANKS ROUNDTABLE “It’s not about what’s your lowest rate and then considering another lender in a few years’ time. Brokers want to put customers into genuine, good, and long-lasting relationships” Johnny Lockwood, BOQ Group

Herbert said every communication or decision focused on delivering for brokers.

“I think the consistency and service we delivered in 2023, even with some really wild fluctuations in volume, was never more than four days to file. That’s how you preserve trust and reputation to consistently deliver over the long term.”

Lockwood agreed, saying it was about getting the right balance between pursuing growth and appropriately delivering “on our commitment to customer (and staff ) experience, while also managing a competitive market dynamic and stakeholder expectations”.

“Balance is probably the key term for a lot of non-majors. It’s about being focused as well – we aren’t a major, we can’t do everything.”

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Lockwood said BOQ Group was priced competitively as a second-tier bank”.

“We’re going through quite a large transformation on platforms… ME Bank [during this period] is the primary platform for us in achieving great customer service and broker service.

“We nail simple lending. If you’re coming through PAYG, low LVRs, the loan’s going to go through in a few days. We’re consistently rated by the aggregators as being at the top in terms of turnaround times, experience and service.”

As a multi-brand organisation, the group also operates ME Bank, BOQ and Virgin Money.

While ME Bank focused on simple, low LVR lending, BOQ had experience in

handling more complex lending, such as the self-employed, construction and SME sectors.

“With confidence we can say to our brokers, ‘what type of lending are you looking to do’ – we’ve got some great options for you,” said Lockwood.

Rakhit said 90% of Bankwest’s lending now came via brokers, up from 75% about 10 years ago.

Bankwest announced the closure of its WA branch network recently. It closed its east coast network between 2018 and 2022 and was focusing mainly on the broker sector.

“We preserved and grew market share by focusing on retention. We couldn’t compete price-wise on new business but we could do it on retention because we don’t have the same costs of acquisition.”

Rakhit said Bankwest performed strongly on retention through the broker portal it had built and by allowing brokers to price as they conducted their customer reviews.

He said 2024 would be different – the branch closures meant the bank could price differently and compete more strongly.

Fedder said Suncorp Bank’s journey had been an exciting one, and it continued to grow sustainably.

“We continue to focus on growing with more brokers, and brokers that are aligned to our customer segments.”

Suncorp Bank’s approach was to ask how its value proposition could be aligned under best interests duty.

“How do we position the brand so that Suncorp Bank, for the right customer, elevates towards the top of the menu?” said Fedder.

Suncorp Bank had moved back in line with the market in the last three years, focusing on three things.

The first was Suncorp Bank’s SunLight proposition, which sees lower risk home loans approved within 48 hours, and often much faster.

The second factor was competing on price.

Thirdly and most importantly, said Fedder, was taking friction out of the loan process,

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NON-MAJOR BANKS ROUNDTABLE

especially between application and loan approval. “How do we work on being one of the more consistent lenders in the market for speed to approval?”

Feedback from brokers had been important to ensure Suncorp Bank remained competitive as a non-major. Fedder said the bank wanted to ensure that when brokers chose Suncorp Bank, they would get the right speed to approval.

Rakhit asked the brokers at the roundtable whether they had driven more business to non-majors in the last five years.

Brincat said this was definitely the case, as she found the major banks “difficult in the service that they provide”.

She said she had only written one loan with one of the major banks in the last two years because the service from the credit team was inconsistent.

such as Bankwest and ING – so they came into play for me.”

Rakhit said everybody was talking about lifting their service proposition to brokers, because non-majors didn’t have the same brand impact as the majors.

“We’ve all focused on our service proposition to allow us to bridge that gap between ourselves and the majors.”

Michaels said his brokerage had quite an even spread between the big four banks, second-tier banks and non-bank lenders.

“But if I had to call out a difference between the majors and non-major lenders, the BDM support is miles and miles ahead with the non-majors.”

Michaels said Catalyst Advisors had a good relationship with the major bank BDMs but the care factor with non-major BDMs really shone through, acknowledging the great

“The biggest opportunity we have as leaders of third party businesses is influencing those conversations about where our banks invest. It’s really pleasing that we are investing more and more in broker solutions” Ian Rakhit, Bankwest “They [the bank] don’t come back to you in a timely manner, you talk to one person, they’ll ask for this and then the file went to somebody else,” Brincat said. “There are some challenges when dealing with overseas operations teams. The experience for me became frustrating because I couldn’t commit to my customer, as SLAs kept changing.”

Brincat said for a period of time, much of her business had gone to Macquarie Bank because they were consistent and easy to deal with.

“As their pricing increased we had to look at other options for our clients and you could get the same level of service from non-majors

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work of Winston Trinh at AMP Bank and Jude Schofield at Bankwest.

Brincat agreed with Michaels. She said it wasn’t that major bank BDMs didn’t care about helping brokers, it was the lack of resourcing and inability to escalate.

“We really hero our BDMs and allow them that ability to win business, defend their reputation. I wonder whether that is true for bigger organisations,” Rakhit said.

Michaels said when talking to referral partners or customers, he told them brokers were in control when it came to assessing customers and preparing the application, but once it went to the bank it was no longer in their control.

“Our closest control within a bank is via our BDMs or relationship managers. I genuinely can say that with non-big four bank NDMs, there’s more love and attention and care.”

Thompson said throughout 2023 ING increased its mortgage lending book above the rate of system growth.

“We did this by simplifying credit lending policies, providing customers and brokers with more options. We also introduced new LVR bands for investors and launched a new online serviceability calculator that was easy to use.”

Broker question from Deborah Brincat: What investment can we expect for brokers to be able to have data rich information about their clients, specifically rates, term expiry and balance? Some lender portals do not provide this information for current and historical clients Brincat said excluding Bankwest and a few others which already provided this information, she had zero visibility when it came to her clients’ current loan rates and no ability to price some existing clients.

She said this lack of information was infuriating and affected retention, especially when doing anniversary calls with customers and having to ask them what their rate was.

The non-major banks’ credit teams had really lifted, providing more consistency and communication, but when it came to broker-facing teams and managing customers, improvement was needed.

Herbert said he had heard these concerns from brokers many times and AMP Bank’s first priority was to be able to provide this information to brokers.

“You’ve got to look at your platforms, your software, the integrations you have with your core banking systems first, and what’s the pathway to get to that? Providing real-time pricing, a real-time view of your customer portfolio, it should be done.”

Herbert said in December 2023, AMP Bank had created an online reprice form which just

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required brokers to provide their account details. Bots could provide a response in minutes, which saved brokers time on repricing.

A retention specialist could also get in contact with the broker to discuss the loan scenario if needed.

Referring to Michaels’ earlier comment about brokers controlling the experience for the customer up until loan submission, Herbert said AMP Bank had been working hard to remove this concern from brokers and customers by creating the right platform and improving the front-end experience.

It wanted to assess loans using the data brokers had already validated through screen scraping and digital IDs and provide certainty to brokers that they would get an answer based on the information they supplied.

When the broker portal was completed, brokers would be able to look at their application pipeline in real time, including notes on the process and any conversations and interactions with customers.

Herbert said it was important that AMP Bank worked collaboratively with brokers to provide information that would help them with their customers.

Rakhit said brokers could access their existing customers’ loan information in the Bankwest Broker Portal. He said the portal was the result of time, money and investment.

Closing its east coast bank branches in 2018 had freed up money for investment in brokers.

“I think the biggest opportunity we have as leaders of third party businesses is influencing those conversations about where do our banks invest? It’s really pleasing that we are investing more and more in broker solutions,” Rakhit said.

Lockwood said ME Bank, BOQ and Virgin Money all had broker portals, including a broker pricing tool which sometimes provided an instant decision for online submissions; in other situations it might have to be escalated.

“We recognise the importance of trying to help you manage your time. There’s no point you sitting on the phone for something that can be done immediately,” he said.

INCREASES IN SCHEDULED LOAN PAYMENTS Share of fixed-rate loans, excludes split loans

%

%

Rolled off during 2022 Fixed-rate loans (by end of period)**

15 Fixed-rate loans (at expiry)*

10

15 10

5

5

%

%

Rolling off after 2022 (until end-2024)

10

10

5

5

0 None

10

20

30

40

50

0 >70***

60

Percentage change in scheduled loan payments (%) Source: RBA March 2023 Bulletin, Fixed-rate Housing Loans: Monetary Policy Transmission and Financial Stability Risks

Lockwood said including customer data in the broker portal would make the process simpler and BOQ Group was currently working on the security aspects.

“Stay tuned.”

Fedder said Suncorp Bank had already built its broker portal, adding in the data of all customers from May 2023 onwards. Like other non-majors, the bank would look at how to best pursue the ongoing retention of customers.

“The fact that brokers see this as a crucial area where they add value to customers means that we need to continue to look at it,” said Fedder.

Lockwood said, “It’s much cheaper for us to keep an existing customer than it is to acquire a new customer. We’d love all customers to stay and for all brokers to be happy.”

Broker question from Stephen Michaels. What are your thoughts on the big four banks and instances where they receive “special treatment” in comparison to non-major banks?

Example – the ability to offer streamlined refinance assessment (i.e. 1% buffer on top of actual rate). Is this fair?

Are non-majors at a disadvantage when it comes to implementing credit policy changes?

Rakhit said the 3% buffer was a requirement set by APRA to support responsible lending.

Some major banks offered streamline loans with lower levels of documentation such as dollar-for-dollar refinances.

Bankwest had offered a 1% buffer on dollar-for-dollar refinances, but only for single owner-occupier or one investment property.

“We needed to inform APRA that we would

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NON-MAJOR BANKS ROUNDTABLE rate. They’ve got multiple properties and are clearly able to service their debt – what is the risk? Particularly when LVRs are sub-80%.”

Rakhit said all non-majors would be pleased with the low level of arrears, given two years of COVID and 13 rate rises.

“Our level of arrears is very, very low. Now this could be due to the 3% buffer.”

Lockwood said this was a good point.

“The Australian economy and banking environment is probably one of the most stable and reliable in the world – it’s the partnership between banks and the regulators and the commitments that we have.”

What are your plans to upgrade technology in 2024 and how will they improve systems and processes for brokers and their customers? What part does AI have to play? put certain controls in place to ensure that we weren’t taking on business or risk that would be detrimental to our standards,” Rakhit said.

Bankwest also had to agree with APRA that it would only allow a certain number of these refinances, with the limit reached very quickly.

Rakhit said the non-majors should look at first home buyers. ‘Mortgage prisoners’ was a common term but there were a lot of ‘rental prisoners’ – potential first-time buyers who due to large rents were unable to save enough for a deposit.

“In terms of serviceability, the first-time buyers are probably paying the highest rate in the market and then you put 3% on top. That’s not necessarily helping us bring more people into homeownership.”

Lockwood said one of the frustrations for non-major banks on 1% buffer loans was that they were policy exceptions and often didn’t stack up due to scale.

“When you’ve got much lower flow than a major and a much smaller balance sheet, because you might have a very small allocation, then how do you manage that? Is that the kind of risk you want?”

It was an unlevel playing field for the non-majors compared to the majors because

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“ING increased its mortgage lending book above the rate of system growth.

We did this by simplifying credit lending policies, providing customers and brokers with more options” George Thompson, ING Australia scale did count, said Lockwood.

MPA asked Michaels if he believed the 1% buffer loans were driving broker business to the majors.

Michaels said this was absolutely the case.

He gave an example of a customer with three properties in Sydney’s eastern suburbs, totalling $3.5 million in loans in the portfolio.

“His borrowing capacity going to a non 1% buffer bank was a maximum borrowing for the household of $2.2 million,” he said. “It was a $1.3 million difference in borrowing.”

Brincat said that it was mainly investors who were missing out on the 1% buffer opportunities, due to policy criteria.

“They’re already getting hamstrung around

Fedder said Suncorp Bank has a strategic partnership with NextGen and they would continue to work together, investing in speed from application through to unconditional approval.

“For me, it’s that consistent approach – how you get faster and faster and take the friction out of the model. We’re reflecting on what we have done in the past and we’re continuing to ask for broker feedback around how we can make that even better.”

Herbert said speed was an interesting point.

“You can be fast, but looking back at the value chain, how do we reduce effort? Effort for the broker, effort for the customer. How do we remove duplication of effort?”

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AMP Bank was keen to improve brokers’ confidence in a lending outcome.

“Brokers regularly tell us they value the ability to control and have visibility of the experience for their customers throughout the home loan journey, however this often breaks down once a loan is submitted,” Herbert said.

“Providing greater confidence in outcomes before a loan is submitted is an important step change we see important to help address this, and delivering a leading application experience for our brokers and their customers that gives great confidence in the outcome upfront is a priority.”

Herbert said there were a lot of tools including propensity modelling and AI that could help. More important were the digital tools brokers used to provide information that could be used by the lenders rather than duplicating the effort already undertaken.

Brincat said a lot of this came back to banks working with aggregators which offered great technology. She gave the example of Lendi Group, which was working on an approval confidence feature.

“So this means that we can put the data in the system, and once the data is accurate, the

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“As a broker, I feel like it’s my responsibility to be in front of my customer and saying, your fixed rate is coming off, let’s have that conversation” Deborah Brincat, Aussie Parramatta system will be able to tell us what’s the likelihood of that approval happening. The work being done with aggregators is helping us as brokers, especially if that can be the one-stop shop.”

Brincat said many brokers also used Quickli due to its accuracy before going to a lender.

Michaels said he also used Quickli to streamline the process and get to the right outcome.

Rakhit said in the future loans could be approved at time of lodgement. This would involve revalidating information brokers provided using data points instead of documents.

Bankwest was excited to introduce its first

AI tool, which helped brokers when using the bank’s library of credit policy.

“You put in certain search information, and AI will bring that information to the fore rather than you having to go and find it.”

Rakhit said AI was ideal for repeatable tasks and the plan was to expand its use.

Bankwest had also spoken to Quickli, which could provide “an amazing level of information on competitors, how they price, how they service, what they put into their serviceability catalogue”.

Rakhit said there were also other great tech companies such as CoreLogic, illion and Equifax that the industry could invest in and the next few years would be exciting.

ING was digitising and automating the

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customer journey and assessment process to create faster more streamlined customer experiences, Thompson said. “Digital validation of application documents is an example. AI is seen increasingly as a core capability and opportunity.”

Lockwood said 2024 would be a massive year for BOQ Group in terms of technology transformation.

“One of the largest investments that the bank has made ever is in a new home loan program,” he said.

BOQ group had launched a greenfield digital bank a few years ago featuring all three brands, Virgin Money, BOQ and ME Bank.

Lockwood said home loans would be added to the digital bank this year. “It’s not just home loans, core banking and the mobile.

We’ve got a brand new origination platform for home loans, which is a digital end-to-end mortgage, but it’s purpose-built for a broker.”

Lockwood said these were significant investments – digitising and automating a new home loan origination process that was based on data points and made things easier for brokers.

“We want to take people out of the process, not because we don’t like our people, but because we want them focused on the complex things.”

After a pause in 2023, home loans would return to Virgin Money by the end of 2024.

Lockwood also talked about BOQ Group’s strategic partnership with Microsoft and being the first company in Australasia to be part of Microsoft’s cloud financial services.

“Our Teams, Outlook, our sales CRM, our broker portal, are all Microsoft and the beauty with that is they all talk to one another.”

“While inflation has cooled, home prices have been on an upward trajectory for some time now and there’s no indication that this will ease in the foreseeable future. This may make it difficult for first home buyers who will be looking to their brokers to find good value mortgages that best suit their needs.”

Michaels said there was a fear of missing out in the property market.

“If I don’t buy this property that I’ve just found because there’s a scarcity in supply, I don’t know when I’m going to see that property again that ticks the box. So that in

“[Brokers’] closest control within a bank is via our BDMs. I genuinely can say that with non big four bank BDMs, there’s more love and attention and care” Stephen Michaels, Catalyst Advisers Microsoft is also investing heavily in AI. “We are investigating how and when we turn on the AI solutions that Microsoft has built into these platforms.”

BOQ Group is looking to use AI in the first instance to improve employee capacity.

Lockwood said this would mean a BDM could go into Teams and ask it to summarise the last six months of interactions with a specific broker.

“It’ll go through all their Outlook, their emails, their calendar, their CPD activities, and come back and provide the summary of what the broker is like. It’s quite exciting.”

What are your predictions for the mortgage industry around demand for lending and particular customer segments?

Thompson said it was always difficult to predict where interest rates would go.

“The Reserve Bank of Australia is still not ruling out hikes, but it has moved to a more neutral setting as far as its guidance is concerned,” he said.

itself is making the market quite buoyant.”

Lockwood asked Michaels if he was seeing pre-approvals rise.

“Absolutely – our pre-approval numbers have come up recently,” said Michaels.

“Everyone is thinking when rates do start to come down, whether it’s the end of this year or next year, that property prices are going to pop off.”

Michaels said he did not believe this would happen as the property market was “very rigid”.

By this he meant, if someone had bought a $1 million property five to 10 years ago, it would now be worth $2 million.

“If you want to go and then upgrade, unless you want to keep the exact same mortgage you’re going to sell and all you can do is buy a $2 million property. People are thinking I might feel rich but what does that really get me?”

Michaels said rate cuts would allow people to borrow more and lubricate the property market, fostering more buyer inquiries and more sales transactions.

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Rakhit said auction rates were looking very healthy but refinances were coming down as banks looked to hold onto existing customers.

“I think first-time buyers are a key demographic for us to get into the market – they generally stimulate everything from the bottom up.”

The growth of this sector hinged on the government’s first home owner grant keeping pace with house prices.

Lockwood said the rental market was tight, and he hoped investors would return.

BOQ Group had increased its support for investors by boosting LVR from 90% to 95%.

He said he would like to see the authorities and regulations improve housing supply and therefore affordability.

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“It is so time-consuming and so expensive to either build a new house, or to open up land.”

Brincat said older generations were living in large houses that they did not need.

“How are we encouraging older people to downsize? If they do sell, they get whacked with stamp duty and if they have investment properties, they face capital gains tax.”

Fedder said looking at the broker market, it had continued to excel year after year.

“The alignment for non-major banks to work with brokers is brighter than ever. I think the broker share will continue to grow in the market and for customers, that’s a great outcome.”

Herbert said there had been consolidation in banking and aggregator industries over

the past 10 years due to high costs. Some brokers who had been operating for 10 to 15 years were looking to sell or leverage their businesses.

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It’s likely you, too, are aware of the seismic shift happening in society and the speed-of-light pace at which technology has advanced in our workplaces. For the past few years, business owners and leaders in all sectors have been redefining their under-

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and that Australian executives report a high degree of urgency to implement AI – 10% higher than the global average.

Swept up in the rush to implement AI, it’s easy to succumb to the narrative that machines will replace humans in every field, including service. It’s even easier to miss the nuances that make human service irreplaceable. Because being human is our advantage.

1 advantage

One of the things that makes us human is that we have a physical body.

Non-verbal information is being constantly communicated through channels like facial expressions, how we walk, how we orientate our body, our physical posture, our eye gaze and our hand gestures.

Our bodies have powerful ways of getting

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connection – a uniquely human gift – is at the heart of what creates loyalty in customers to brands and businesses.

When an employee recognises emotions in a customer, they have the ability to defuse situations, make the customer feel understood and offer empathy where needed – in this way, they create value beyond providing a service. They create an emotional connection.

Having a human spirit is a

4 service advantage

across information. Of course, we also use our senses, voices and motor skills to complete tasks and be helpful. But the most obvious place to start elevating the value of humans who serve customers in your business is to upgrade the way your staff use their bodies as communication tools.

the advantage humans have over robots.

AI and robots can’t give attention or offer connections the way humans can! A robot might be able to turn its view to see from a different angle, but it cannot give attention – and the skill of paying attention is crucial to good judgement and social interactions.

2 service advantage

The skill of paying attention is a

3 emotions is a service advantage

While technology is grabbing attention, we forget that giving attention in service interactions – one-to-one, one-to-many – is

Service is subjective. Service is recognising how people feel and then aiming to make them feel better. Creating an emotional

Understanding

and

balancing

It’s human nature to give meaning to actions, whether by an employee or a customer.

Service actions, in particular, can carry a lot of meaning for people.

Machines and robots can give your customers an outcome, provide a service. But a human who serves another person can spot the hidden emotions, interpret the unspoken words and uncover the subtle nuances that machines may miss. They’re entering a relationship with that person, tapping into something more meaningful.

Being human is our advantage.

Service industries are madly rushing to digitalise for efficiency, but they’re often compromising what once set them apart – acts of service by humans. We need to remember that at the heart of service is humanity. We have names, hearts and minds; we are spiritual beings having a human experience.

For any business owner in service, the new dilemma is how to reclaim the human in “human service”.

Jaquie Scammell is the award-winning author of The Future of Service is 5D, Service Habits (2nd ed) and Service Mindset. She’s an eminent keynote speaker, a thought leader in service leadership and the CEO and founder of business ServiceQ. Find out more at www.serviceq.co

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PEOPLE

BROKERAGE INSIGHT

Expertise combined with customer service A desire for a better work-life balance and to help SME clients run and grow their business led to the formation of brokerage Equipped Commercial Finance, says Cristian Fedrigo CREDIT KNOWLEDGE is part of Cristian Fedrigo’s career DNA and he’s using it to great effect as an asset, equipment and commercial finance broker.

Fedrigo set up his own business – Equipped Commercial Finance – in Sydney in October 2022, capitalising on his years of experience working for non-bank lenders, a major aggregator and a bank.

“I spent the last 15 years primarily working

been instrumental in supporting the business in its early stages.

Having spent a few years of his career working in an operational capacity, Fedrigo says he has a very strong credit discipline.

“This skill was directly transferrable to finance broking.”

With his experience in the lending and aggregation sectors, he says the transition to broking was relatively smooth.

“We offer clients a true financial partner that will work with their business through all cycles from inception to maturity and beyond” on the lending side, predominantly within a sales discipline and more recently in an operational capacity, managing credit and settlements teams,” says Fedrigo.

He says his main motivator in setting up Equipped Commercial Finance was to restore a more sensible work-life balance, allowing him to spend more time with his wife and twoyear-old child.

“I always had a desire to open a full-service commercial brokerage supporting clients who seek outsourced financial support to run and grow their business. The timing just felt right.”

Reflecting on his first year of trading, Fedrigo says he believes “one of the key reasons the business thrived was my credit expertise”.

This expertise, coupled with entrenched working relationships with key lenders, had

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“Naturally, there is quite a lot of work involved in setting the business up, signing agreements and finalising accreditations.”

Fedrigo says it took about three months before the business was fully operational and “application ready”.

“The expectation was to spend the initial few

months circling the wagons, leveraging my existing networks for valuable feedback and support wherever it was offered. The level of support was overwhelmingly positive, with activity levels building very early in my journey.”

He says so far the brokerage’s success rate on applications is above 90%.

“This wouldn’t have been possible without the BDM and banker network for those lenders we work closely with.”

Equipped Commercial Finance offers commercial property, franchise finance, acquisition finance, asset finance and cashflow finance.

“Our client base is made up of trading businesses with a skew towards transport, civil construction and professional services,” says Fedrigo.

“In terms of growth, based on our client list it is not sector specific. It appears to be more of a post-COVID rebound, with many of our customers now trading at their pre-COVID levels.

BUSINESS PROVIDES ONE-STOP SHOP OF SOLUTIONS “Equipped Commercial Finance offers a full-service brokerage model that looks beyond the initial point of funding. We aim to address not just the immediate financial requirements, but also incorporate medium to long-term strategic planning into the discussion. As part of this, we also offer tax and advisory services and financial planning options for clients seeking to have all their services managed in-house. This holistic service proposition offers a single destination for all essential financial services and one that will usually save our clients time and money.” – Cristian Fedrigo, director, Equipped Commercial Finance

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EQUIPPED COMMERCIAL FINANCE AT A GLANCE Owner: Cristian Fedrigo Location: 801/84 Pitt St Sydney Services: Commercial property, asset and cashflow funding Number of employees: 1

“Our client base is made up of trading businesses with a skew towards transport, civil construction and professional services” “As for customer service, this is absolutely key in my opinion. We maintain regular contact with our customers. We also complete annual reviews, which include strategic planning for the next 12 to 18 months.”

Fedrigo says clients have proven to be very resilient to higher interest rates.

“We are seeing a strong level of discipline towards new debt and many of our clients are looking to extend the effective life of their existing working assets rather than upgrading unless it’s absolutely critical.”

More recently, supply chain delays had “come back to normal”, with stock availability returning to pre-COVID levels.

“This has led to faster conversions for asset

purchases and less of a dependence on supply chain finance (debtor and trade finance).”

Fedrigo says it’s great to see broker diversification, with more residential specialists offering more customer solutions.

“We are of course seeing an increasing number of commercial funders expand their distribution reach to include residential specialists.”

However, it raises questions about competency and the ability of these brokers to provide the appropriate level of advice and service to their customer.

“I believe there is a responsibility for each lender to sign off on the competency of the broker prior to providing accreditation.

“This may provoke the need for a more robust training/support framework, or potentially a slightly different pathway for brokers who are still fine-tuning their commercial lending skills,” Fedrigo says.

Equipped Commercial Finance offers commercial mentoring to brokers looking to improve their commercial lending skills.

So what are Fedrigo’s goals for the brokerage?

He says Equipped Commercial Finance has a steady inflow of new customers, as well as “some extremely loyal clients and referral partners who have been very supportive early in our trading journey”.

“In terms of business goals, the mission of the business is to provide medium to long-term financial support that looks beyond the initial point of funding.”

Being a full-service financial brokerage, it can offer clients “a true financial partner that will work with their business through all cycles from inception to maturity and beyond”.

“As part of our in-house service offering, our clients benefit from tax and advisory services, financial planning and business valuation estimates,” Fedrigo says.

Ideally, as the demand for the brokerage’s services increases, so will the head-count.

Fedrigo says his preference is to grow in a manner which is consistent with clients’ needs.

“This may not take the traditional path of simply hiring more brokers.”

Offering more services like tax and advisory, financial planning and valuations, with the ability to share resources, “allows us to deliver a more cost-effective way of growing headcount without compromising on service”.

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email antony.field@keymedia.com

UP TO THE CHALLENGE Tom Uhlich, who operates Brisbane brokerage Boss Money, loves endurance sport and has been described as ‘‘tough as a $2 steak’’ TOM UHLICH, the CEO of Boss Money and a seasoned triathlete, transforms endurance sports into lessons of resilience.

Uhlich’s triathlon journey began 15 years ago, quickly evolving from a single sprint to eight gruelling ironman races.

“I had to take it up a level each time,” Uhlich says.

In an unforgettable ironman event in Malaysia, Uhlich was confronted with extreme heat, equipment failures and aggressive monkeys. But he showcased remarkable fortitude, overcoming numerous obstacles to finish seventh after starting the bike segment in 42nd place.

His tenacity was further displayed in the Geelong half ironman, where he finished the race despite injuries, earning praise from the media, which labelled Uhlich “tough as a $2 steak”.

Despite the triumphs, the physical toll was undeniable, culminating in his last race in Cairns, just before he underwent knee surgery. Now retired from ironman competitions, Uhlich considers his foray into endurance sports crucial to both his personal and professional development.

2

“And I wonder why my knees have no ca rtilage”

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Times Uhlich represented Australia in triathlons

8

Number of ironmans he has completed

7

Number of marathons he has completed

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