How to find untapped commercial lending potential among your client base
Commercial finance is undeniably a growth opportunity in the Australian broking sector.
With broker market share of home lending approaching 80% – potentially reaching the limit for further substantial growth – brokers are increasingly seeking to diversify into small-business lending and asset finance.
Customers are also demanding a broader service offering from their brokers, which is unsurprising given that, with around 15% of Australian workers calling themselves their own boss, many homeowners also have commercial finance needs.
This makes the importance of understanding the nuances of commercial lending more important than ever – especially if brokers want to remain competitive in an increasingly saturated market.
Add in the fact that post-election clarity has positive implications for business sentiment, and now seems like the perfect time to assess the commercial finance needs of your customers.
But how do you, as a mortgage broker, initiate the conversation with your customer base? How can you have a valuable conversation with your customers about their commercial finance needs?
According to Grant Smith, deputy chief lending officer at ORDE Financial, there are five questions brokers should be asking.
1. How can I provide you with holistic financial support?
Mortgage brokers don’t need to compete with a small business client’s bank. Instead, “position yourself as complementary to their day-to-day banking relationship,” Smith said.
Rather than replacing the role of a business banker, brokers can add value by identifying lending gaps and offering flexible solutions that align with clients’ broader financial goals.
“There is an opportunity to discuss shorter term business lending needs versus longer term property and investment goals,” Smith said, encouraging brokers to initiate strategic conversations that bridge both personal and commercial finance.
He also advised brokers to “bring commercial opportunities into everyday client conversations, even if they start with a personal lending enquiry.”
2. How can I provide you with more flexibility to grow your business?
“SME clients value speed and flexibility – this is where we see non-bank solutions as a valuable tool for brokers looking to support business lending,” Smith said.
These lenders offer tools that brokers can leverage to meet diverse business lending needs, such as:
- Flexible income verification such as alt doc and lease doc
- Rapid access to short-term capital for high-value business ventures
- Using residential property to secure cash out for business purposes
- Loans structured to support debt consolidation, including ATO debt
3. Where do you need more flexibility beyond business lending?
“SME clients have non-traditional income structures or irregular cash flow, making it harder to access finance,” Smith said. That means brokers can help find:
- Alt doc options that enable clients to leverage business income to grow property investment portfolio
- “Set and forget” facilities that enable business owners with fluctuating income to make long-term investments
- Smart SMSF investment options, such as using owner-occupied commercial premises, servicing outside the fund
4. Where can I give you greater guidance and confidence?
“Many borrowers may be wary of unregulated versus regulated loans,” Smith said. “Brokers can work with lender partners to provide expert guidance and reassure clients.”
Many lenders, including ORDE, consider regulated and unregulated loans as the same process, albeit with different securities.
A good lender will “make it as simple and accessible as possible for brokers and their customers – same accreditation process, application form, credit policy,” said Smith.
5. How can I help you stay ahead?
“This is an opportunity for brokers to leverage insights gained from having a holistic view of a client’s financial situation as well as their unique understanding of the local property market,” Smith said.
Brokers should proactively discuss:
- Growth plans
- premise changes
- refinancing and property investment opportunities and
- tax-debt management
