An aggregator representing over 35% of the total commercial broking market in Australia has launched its inaugural report into business lending.
FAST’s research revealed signs of growth, despite the challenges presented by the current environment. Drawing data from 24 business lenders and over 150 finance brokers within the FAST network, business lending charted a slight increase of 0.5% to $6.68bn in FY19, including $1.34bn written through private funders.
According to FAST CEO Brendan Wright, one of the key takeaways from the report is that the same momentum being celebrated in mortgage broking exists in the commercial space.
“There is high awareness in financial services around nearly 60% of mortgages being written through brokers, but this theme of debt advice to businesses – small, medium and large, quite frankly – is well and truly underway in the same manner,” he explained.
“There is significant opportunity for a long time to come for finance brokers looking to to deliver debt advice to businesses. There’s such a high appetite for it; it’s truly exciting.”
Increased regulatory scrutiny and shaken financial trust following the royal commission saw 94% of the surveyed FAST brokers writing commercial loans and 92% of those writing residential mortgages communicate they are operating in an increasingly complex world.
“Recent developments have only highlighted the increasingly important role of brokers, as customers and business owners demand trusted advice and greater choice in the financing market,” said Wright.
“It is now harder than ever for businesses to obtain the financing they need from the major banks due to the challenges of complexity in policy and process. Brokers are playing an increasingly important role in helping businesses address those challenges and tap into a growing market of smaller lenders."
Despite these tough market conditions, the research found brokers are feeling optimistic about the outlook for their business and the industry. Three in four brokers writing commercial loans have a positive outlook, compared to two in three of those writing just residential mortgages.
“There is enormous opportunity for brokers to grow their own businesses due to the [deep well of demand] and the dynamic, diverse nature of business in Australia. The range of small through to large businesses in the different industries and makeups and contexts creates significant opportunity as each needs finance to operate and grow," said Wright.
"This is highly exciting for brokers. They can use this report to get insights and validation that there is significant opportunity in delivering debt advice to business owners in Australia.
“With this report being the first of many, our goal is to provide a useful barometer of business lending activity across Australia, and we look forward to bringing further insights into the future,” Wright concluded.
