While brokers have claimed majority market share in the residential channel, an industry veteran has called for a push to be made in the commercial space, in order for brokers to become the authority across all types of lending.
“As an industry, we can do more to promote ourselves as being the friend of and solution for small businesspeople.”
According to Mohnacheff, the broker market share in the commercial space is just 5% as compared to the nearly 60% in residential lending. To him, there are two main reasons this figure should and can change.
Firstly, business owners are time poor and perhaps in even greater need of a broker’s guidance than clients looking to secure a home loan.
“Most small business owners are usually too busy to spend time shopping around for a better business loan. If a borrower is directly tied to a single bank, they’re on their own when it comes to securing a better deal,” said Mohnacheff.
“In steps the broker. It’s up to him or her to initiate that conversation, to talk about reviewing the terms of their current loan.
“Offering greater choice is what brokers bring to the market. It's important you inform your customers of the full suite of services you offer. Don’t assume they will know.”
Secondly, expanding into commercial is not as far a step from residential as it may seem, especially given the wide variety of tools provided industry-wide to facilitate the transition.
“The first step with any new loan is simply to have a conversation with the customer and find out exactly what it is they need,” Mohnacheff said.
“What are they trying to achieve? Write down the details from that talk. Then, it’s about picking up that phone and having conversations with a range of BDMs, the underwriters, the lenders. It’s free and costs the broker nothing.”
“At Liberty, we also have scenario teams who are ready to help workshop that next deal either over the phone or online.”
Mortgage brokers who remain unsure if they're equipped to broaden the scope of their services should take the matter up with their aggregators.
Mohnacheff said, “Brokers should engage more deeply with their aggregators to say, ‘Listen, we want access to better understand how to support business customers. We need updated information.’
“If the aggregator isn’t putting training sessions, roadshows, or PD days on, ask for them. Go and tell them what you need.
“Curiosity is going to drive the change needed to better engage with business customers.”
