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While brokers' share in the market continues to grow, along with it comes added pressure to stay up-to-date on new information and a never-ending list of new solutions. This can seem overwhelming for an already time-strapped broker. Working with a boutique non-bank lending firm can help brokers save time and energy by supplying them with expertise in niche areas, said Darren Liu (pictured), co-founder and managing director of Finstreet.
"As a broker you can't do everything," Liu told Australian Broker. "You can't be specialized in every single area. You can be specialized in one area. But you shouldn't try to do everything, because not everyone will have the capacity to understand every policy and everything.
"Why would you spend hours and hours learning the policies for 10 funders and 100 products and then the products change every few months?" he said. "Brokers just don't have time to do that."
That's where a firm like Finstreet comes in, Liu said. Sydney-based Finstreet launched in 2023 to focus on the non-bank lending market.
"A lot of brokers would benefit from learning about non-bank lending, but either they don't have enough resources to support them, or they don't have enough time and capacity to do everything," Liu said. "Working with Finstreet, the broker will be able to focus on growing the relationship with the customer, and also try to deliver the best service, rather than spending time trying to find a solution that they're not really familiar with. They don't need to understand every policy, every product, or every single scenario."
Private credit and the use of non-bank lending for residential home loans has ballooned in recent years, as many traditional banks pull back.
According to Liu, Finstreet's submission volume surged 180% year-over-year in the first year of business, while the settlement volume was up 227%, compared with the first year.
"It's tremendous growth for us," Liu said.
Liu, a former mortgage broker himself, said about 90% of Finstreet's business is to help write residential mortgages. But the firm also works in the commercial space, in addition to offering specialized services in things like expat lending, non-resident lending, construction loans and self-managed super funds, among other services.
"Our focus has been on the products," Liu said. "Because we believe the products can help the brokers get the right solution for the customers. That's how we add value to the brokers, by growing their existing portfolios."
In addition, the executive said 100% of Finstreet's customers come through the broker third-party channel.
That's why, Liu said, "We value the broker relationship. [Consumers] would like to get advice from brokers. And they need options. That's the reason why the broker provides value in the transaction. If the customer comes to the broker and the broker doesn't have all the right solutions, then the brokers' value proposition will be devalued."
