Thinking about diversifying into commercial lending? The head of commercial at a major aggregator says the opportunities are “paramount” for brokers to look outside of the bread and butter residential loans.
Vow’s newly appointed head of commercial and leasing Glenn Mitchell told Australian Broker that increased funding coming into the markers in the last 24 months means there are more products and reasons than ever to diversify into commercial.
“It’s an exciting phase to be honest. You’ve got commercial against property, against funding of cash flow of the business, you’ve got leasing and you’ve got debtor finance. There are a lot more products that people can now access and our members can access.”
Once the domain of elite or specialised brokers, commercial lending is increasingly becoming a realistic option for everyday diversification for brokers.
“It’s interesting, I actually presented to the commercial staff of BankWest recently. My research, particularly looking at other lender data as to the growth in the last 24 months, reveals that with the broker market and distribution, it [commercial lending] has gone from 15% to just under 30% in the last two years,” Mitchell said.
The growth in commercial lending through the broker channel is a trend which Mitchell expects to continue, especially as the banks seek to capitalise on the success brokers are having in the residential sector in the commercial space too.
“Projections by most of the major banks will see over 50% of residential products written in the marketplace come through the distribution channels … recognising this is a key indicator of growth for them.”
The opportunities are “paramount” for brokers to be looking outside of residential lending right now, Mitchell told Australia Broker.
