More brokers are riding a growing swell of non-bank lending to SMEs, and at Prospa, these brokers make up 54% of the business loan specialist’s transacting partners this current calendar year to date.
Along with increasing broker patronage, more SME owners have become aware of alternative lenders in Australia, with Prospa research showing the SME awareness was now at around 54% – a massive improvement from levels in the mid-teens six or seven years ago.
Business owners have several reasons to consider a non-bank over a mainstream bank, but their decision to take up an alternative finance option or not often comes down to the level of service provided.
Read more: Service in a time of uncertainty
“A key driver for consideration of an alternative lender over an established institution is the quality of the overall customer service,” said Roberto Sanz (pictured above), national sales manager at Prospa.
But what does “service” mean exactly for SME customers?
“From June data, we know they’re looking for flexibility in repayment options, speed of access to funds, and ease and speed of the application process,” Sanz said.
For brokers, using a lender who is dropping the ball of any of the said departments, would obviously prevent them from providing clients with good service.
Brokers obviously won’t be able to provide clients with the service they need and deserve if the lenders they are using are dropping the ball in any of the said departments.
When choosing finance, it might also be important to consider such factors as the security needed, if any, the length of the loan, the interest rate, and whether the lender understands the customer’s business.
“We also know more and more small business owners are looking to their brokers for information to inform their decisions on borrowing products, with 21% of SMEs specifically seeking out their advice,” Sanz said.
Non-banks can uphold its side of the service equation by offering a simple application process, flexibility, and fast turnaround times. It’s the broker’s job, on the other hand, to round out that service when it comes to the more personal aspects of the relationship.
“The mortgage brokers who make up 54% of our referred business this year are doing three things well: building awareness, creating appetite, and providing access,” Sanz said. “We know they understand where the appetite for funding is because they’re consistently identifying their clients’ additional needs.”
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