This area of lending is bouncing back. Here some essential advice on how to make the most of it and diversify your client book
The commercial lending sector may have suffered along with the rest of the financial services industry during the GFC but, looking at recent ABS figures, it appears to be back on the up.
While the total value of commercial lending commitments in Australia may be some way off its January 2008 high of $53,615m, it has seen a steep rise in recent months, suggesting that investors are developing a growing appetite for commercial property assets.
In fact, while there have been some peaks and troughs over the last month, the total value of commercial lending commitments rose from $28,916m in January 2013 to $40,528m a year later. This represented a 40% increase in just 12 months.
So how can brokers capitalise on this trend and find clients who are in need of commercial finance? MPA speaks to spokespeople from three commercial lenders to find out.
Cory Bannister, head of credit – product, La Trobe Financial
First port of call should be to look at your existing client database. Go through your CRM to identify clients that already hold commercial property and see if there is an opportunity to refinance it for them; particularly if they have held the property for some time, we often see untapped equity sitting in a customer’s assets and liabilities statement tied to commercial property.
The next step would be to again consult your database to look for self-employed clients, to see if they are interested in purchasing a premises to conduct their business from, possibly even in an SMSF structure.
For new clients, contact your network of accountants, financial planners and real estate agents for leads in this space, or try your aggregator or successful brokers for their ideas on how to get involved.
Iain Forbes, director, AFM
Brokers could check their existing databases for existing clients that might have commercial requirements. A good example might be self-employed people paying rent versus buying their own property. Check for super fund SMSF options as well.
Jonathan Street, CEO, Thinktank
For those brokers who mainly focus on residential, within their existing client base or networks they are bound to have small business owners and professionals with an interest in commercial property as an investment. It can be simply a case of asking the question in their next call, meeting or email contact with their clients if they can offer assistance with any commercial property enquiry or needs.
The other major area of opportunity at the moment is in the shift of SME owners to using SMSFs to acquire commercial property. Because of the significant tax advantages of owning the business property in a super fund, there has been a quantum shift in the industry over the past few years and we only see this as the beginning of a substantial trend in the nature of commercial property ownership going forward. In this area, brokers with affiliations with accountants and financial planners will be able to source and foster lending opportunities both for their existing clients and be referred new ones.
For more essential information on branching out into commercial lending, pick up MPA 14.5 – on desks now.
While the total value of commercial lending commitments in Australia may be some way off its January 2008 high of $53,615m, it has seen a steep rise in recent months, suggesting that investors are developing a growing appetite for commercial property assets.
In fact, while there have been some peaks and troughs over the last month, the total value of commercial lending commitments rose from $28,916m in January 2013 to $40,528m a year later. This represented a 40% increase in just 12 months.
So how can brokers capitalise on this trend and find clients who are in need of commercial finance? MPA speaks to spokespeople from three commercial lenders to find out.
Cory Bannister, head of credit – product, La Trobe Financial
First port of call should be to look at your existing client database. Go through your CRM to identify clients that already hold commercial property and see if there is an opportunity to refinance it for them; particularly if they have held the property for some time, we often see untapped equity sitting in a customer’s assets and liabilities statement tied to commercial property.
The next step would be to again consult your database to look for self-employed clients, to see if they are interested in purchasing a premises to conduct their business from, possibly even in an SMSF structure.
For new clients, contact your network of accountants, financial planners and real estate agents for leads in this space, or try your aggregator or successful brokers for their ideas on how to get involved.
Iain Forbes, director, AFM
Brokers could check their existing databases for existing clients that might have commercial requirements. A good example might be self-employed people paying rent versus buying their own property. Check for super fund SMSF options as well.
Jonathan Street, CEO, Thinktank
For those brokers who mainly focus on residential, within their existing client base or networks they are bound to have small business owners and professionals with an interest in commercial property as an investment. It can be simply a case of asking the question in their next call, meeting or email contact with their clients if they can offer assistance with any commercial property enquiry or needs.
The other major area of opportunity at the moment is in the shift of SME owners to using SMSFs to acquire commercial property. Because of the significant tax advantages of owning the business property in a super fund, there has been a quantum shift in the industry over the past few years and we only see this as the beginning of a substantial trend in the nature of commercial property ownership going forward. In this area, brokers with affiliations with accountants and financial planners will be able to source and foster lending opportunities both for their existing clients and be referred new ones.
For more essential information on branching out into commercial lending, pick up MPA 14.5 – on desks now.
