Brokers can diversify without starting from scratch
For brokers who’ve built their business around residential mortgages or buy to let, commercial property finance may feel like a natural next step. The client relationships are already there, the fundamentals of property finance are familiar and, in many cases, opportunities to introduce commercial lending may already be sitting within an existing client bank.
However, commercial can feel like a market reserved for brokers with years of specialist experience. Different property types, business circumstances and lending considerations can make it appear more complicated than it needs to.
The reality is that brokers don’t necessarily need to become commercial lending experts overnight. But with the right approach – and the right specialist lender alongside them – commercial can become a valuable addition to their offering.
Look for opportunities beyond the obvious
Commercial property finance covers a much broader range of circumstances than the term “commercial mortgage” might suggest.
There are owner occupied properties, where a business wants to buy premises from which to operate, as well as investment properties where the borrower’s looking to generate rental income. There are also mixed-use and semi-commercial properties, such as a shop with residential accommodation above, alongside more specialist property types including offices, industrial units, warehouses, retail premises and other commercial buildings.
Borrower types can be just as varied. They could be experienced property investors, established businesses looking to purchase or refinance their premises, or clients taking their first steps into commercial property.
That creates opportunities for brokers who are prepared to look beyond the traditional residential or buy to let conversation.
Use your existing client base to get started
Diversifying into commercial doesn’t mean finding an entirely new audience.
A broker with an established residential or buy to let client base may already have clients with commercial property ambitions:
- A landlord might be considering a mixed-use investment.
- A self-employed client could be looking to buy their business premises rather than continue renting.
- An existing property investor might want to expand into a different type of commercial asset.
These opportunities can be missed if the conversation stays focused on the immediate residential or buy to let requirement.
Asking clients certain questions could reveal a hidden opportunity, such as:
- Do they own or run a business?
- Do they currently rent their business premises?
- Are they considering another investment?
- Do they have plans to expand, relocate or acquire a property for their business?
For brokers, that means there’s an opportunity to grow existing client relationships rather than start from scratch. By keeping commercial in the conversation, they could uncover new opportunities and continue supporting clients as their property and business needs change.
Commercial doesn’t have to mean complicated
One of the biggest barriers to entering commercial lending can be perception.
It’s true that commercial cases can involve more variables than a straightforward residential mortgage. The property itself matters, but so can the business, the borrower’s experience, the intended use of the property, the rental income and the wider circumstances of the transaction.
That doesn’t mean, however, that every commercial case is inherently complex.
Brokers moving into the sector can start by getting comfortable with the fundamentals: what the property is, how it’ll be used, who the borrower is, how the loan will be repaid and what the overall commercial proposition looks like.
It’s also important to recognise that commercial lending isn’t simply residential lending with a different property attached. Each case needs to be considered on its own merits, and specialist lenders such as InterBay take a more individual approach to understanding the circumstances behind the application.
The right lender can make all the difference
For a broker entering a less familiar market, access to experienced commercial underwriters and business development teams can provide valuable reassurance.
Knowing who to speak to before submitting a case can help brokers understand whether a proposition’s likely to fit, what information will be needed and where potential challenges might arise. It can also help reduce the uncertainty that can come with placing a certain type of case for the first time.
A specialist lender like InterBay offers far more than a strict set of lending criteria. It can provide expertise, accessibility and support throughout the journey – helping brokers understand the opportunity and navigate the case with greater confidence.
For brokers diversifying into commercial, that relationship can be just as important as the product itself.
Start with what you know
The opportunity for brokers isn’t necessarily about moving away from their existing business. It’s about adding another dimension to it.
Residential, buy to let and commercial lending can sit alongside each other. A broker who already understands a client’s financial circumstances and property ambitions may be well placed to identify when a commercial solution could be relevant.
It’s also worth considering the longer-term value of those relationships. A client who starts out with a residential mortgage could later become a landlord, business owner or property investor. Equally, an existing buy to let client may eventually look beyond residential property.
Keeping commercial in the conversation means brokers can be ready when those opportunities arise.
Don’t wait until the case becomes difficult
There’s a tendency to think of specialist commercial lenders as somewhere to turn when a mainstream lender can’t help.
But that approach can mean missing out on earlier opportunities.
Choosing a specialist commercial lender from the outset can give brokers access to experts who understand the market and can help shape the right approach before an application’s submitted. It can also give brokers greater confidence when they encounter an unfamiliar property type, borrower or transaction.
As an intermediary-only lender, InterBay has extensive experience in commercial, semi-commercial, buy to let and bridging finance, supporting brokers across a broad range of property and borrower circumstances. Its specialist expertise is designed to help brokers approach commercial opportunities with greater confidence – whether they’re placing their first case or looking to build commercial lending into their business more regularly.
For brokers considering taking that first step, the starting point could be simply recognising the opportunities already in front of them, understanding the fundamentals and partnering with a lender that can provide the expertise and support to help them navigate everything else. Choosing a lender that can help you stay in control from the beginning could make or break a case.
Commercial lending may be a new area for some brokers, but unfamiliarity doesn’t need to be a reason to avoid it.
If you'd like to discuss a case, please contact your specialist finance account manager, call us on 01634 835007 or use live chat. Or for more information on getting started with commercial property finance, brokers can explore InterBay’s ‘How-to’ guide.
This article was provided by InterBay
