When he realised his home loan borrowers needed help in other areas, the CEO of N1 Loans began looking at other solutions
N1 Loans transitioned into commercial loans back in 2018, and around 60% of its annual revenue is now coming from commercial finance. CEO Ren Wong says he found many of his home loan borrowers were self-employed, and he realised their finance needs expanded far beyond a mortgage – that’s when he decided to explore other products.
Having written almost $67m in loans in the past 12 months, Wong puts his success down to “being in the right place at the right time”.
Wong’s loans are mostly split between unsecured lending and SME finance, so he is seeing the impact that the pandemic is having on business owners.
“When we have general economic uncertainty, we see a lot of quality businesses being affected, and it's not due to management of the business but rather the market conditions,” he says.
“Those businesses that we know can survive and thrive post the health crisis, we want to be able to help more”
Because of the current environment, Wong has seen enquiries surge from business owners looking for finance solutions as lenders become more cautious. But he says he has a side business up his sleeve to help with as many solutions as possible.
“Our value is to bring our knowledge to the table and bridge the funding gap between both sides – lenders and borrowers,” Wong explains. “Having a side business accounting firm helps a lot when we need our accountant colleagues to study the numbers, and to add more value to clients.”
To prepare for the next few months, when he expects to see business lending activity contracting and increased due diligence, Wong says N1 Loans is focusing more on non-transactional work. He suggests the broker model needs to evolve to provide more consulting, helping borrowers with complicated needs to navigate the challenging environment.
Using his accounting team, N1 plans to be more involved in scenarios and to help with budgeting, forecasting and managing cash flow.
For brokers starting out in commercial finance, Wong says it is important to partner with the right people, such as agents who specialise in commercial properties, accountants and financial planners with self-employed clients, and solicitors and advisers that are working with clients with more complicated finance needs.
“We need to equip ourselves with more knowledge and go beyond the traditional transactional work, then after some time we will realise we don't need as many clients to continue growing; we just need to be able to cater for a limited number of clients but with deeper relationships and more in-depth work,” Wong says.
Total value of loans settled: $66,946,525
Number of commercial loans settled: 130
Average commercial loan size: $514,973
Years as a commercial broker: 7
Aggregator: Finsure
