Be a good troubleshooter, don't mince your words, says broker
Brokers are continually being told to diversify.
Market-leading aggregator LMG made it the central focus of its recent Growth Summit, while industry bodies like the Commercial and Asset Finance Brokers Association of Australia (CAFBA) are ramping up their education output to entice brokers over to the dark side.
While there are obvious benefits to diversification – more business opportunities, for starters – each avenue of commercial broking requires unique skill sets, knowledge and even personality traits to be successful.
When MPA sat down with Sam McDonald, a Central Coast-based equipment finance broker at AtlasBroker, he had a lot to say on the matter.
AltasBroker has a broad offering spanning residential, commercial, asset, insurance and debt advisory, but McDonald is laser focused on being the best equipment finance broker in the business.
McDonald’s singular focus has served him well in 3.5 years of equipment finance broking and has shaped his opinion of what it takes to be successful in the field.
Stick to your lane
“If you’re going to be good at equipment finance, you need to just specialise in equipment finance,” said McDonald. “As far as mortgage brokers looking to move across, if you’re going to do it well and do the full gamut of equipment finance, hire someone that is a specialist.”
The referral route is another viable option, he added. This is down to how the complexity of equipment finance is often underestimated.
While closing a car finance deal is fairly straightforward, the story is drastically different the further up the equipment finance chain you go.
Assets like trucks, excavators and other heavy machinery come with a whole gamut of considerations like import finance, cash flow analysis and Australian Business Register (ABN) documentation.
The age-old adage of being the “jack of all trades, master of none” applies as brokers risk giving their clients sub-par service if they tackle these issues without first knowing the idiosyncrasies of equipment finance.
But it’s more than just a knowledge gap – knowledge can be attained, after all. In McDonald’s view, it's vitally important to acknowledge the logistical limitations of being a broker in this day and age.
Playing in the equipment finance game is “not just about having the confidence to be able to do it, but knowing you have the capacity to do it”, he said.
“If (brokers) want to be serious about it and they do want to look after their own client base and provide a really good service for them, either have someone that's really good to refer through to, or hire someone in-house that has the background, knowledge and skill.”
According to McDonald, brokers also risk underestimating the time it takes to close an equipment finance deal, all the while keeping up to date with changes in lenders’ dynamic policies.
Don’t mince your words
Communication is another crucial component to being a successful equipment finance broker. In particular, McDonald touted the benefits of being able to simplify complex concepts and scenarios.
“Some people like to go to a finance person that uses big, technical words, but when you’re dealing with business owners, you want them to understand the products you're using and why you're using them,” he said.
While some finance experts might mistake technical jargon for intelligence, McDonald thinks the opposite. “If it is difficult to understand, (brokers) should be able to break it down for you… you don’t want a client signing up for a product they don’t understand.”
Be a good troubleshooter
Each of McDonald’s clients has a different back story and a different credit history. It makes the ability to troubleshoot one of the most important attributes of being an equipment finance broker.
Knowing the differences in funders’ policies like the back of your hand, while maintaining good relationships with their business development managers (BDMs) gives brokers an advantage when structuring a bespoke deal for their client.
Know the market
NAB’s business confidence indicator, at the time of writing this article, was not filled to the brim with good news. It fell to -3 in March, the lowest point since November 2024, with NAB stating that an uptick in profitability was offset by lower trading conditions and employment.
While a concerning statistic at face value, McDonald highlighted that business confidence “varies between the states and between industries”.
“Victoria is very different to Western Australia at the moment… I’ve got clients (in WA) that are saying there’s too much work,” he said. Given the grim outlook economists – including NAB’s recently retired chief economist Alan Oster – have of the Victorian economy, the same cannot be said for the Garden State.
“So as far as business confidence and confidence in the economy goes, Australia is not a monolith and every industry has its own differences,” McDonald said, conceding that the Australian economy “has definitely slowed down”.
The Reserve Bank of Australia’s 25-basis-point rate cut in February may have stimulated home buying enquiries, but it barely moved the dial for deal enquiries from small businesses.
Nonetheless, it pays to establish networks across the breadth of national markets as a hedge against state-specific volatility.
