Mentoring is one of the best ways to get ahead in the broking industry, and one could not have asked for a more experienced panel than that which sat down at the Four Seasons in Sydney for “The secrets to being a successful commercial broker”, an event hosted by Semper Capital.
The speakers included Andrew Way, director and founder of Semper, Nick Harper, director and specialist finance provider at Fuzion Capital, Judy Corak, Co-founder Efunder, and a commercial broker with 20 years of experience, Robbie Grul, partner at G & H Financial and Anthony Landahl, Managing Director at Equilibria Finance.
All agreed that finding someone to mentor them through was a vital part of building a successful career as a commercial broker. “I think that as a rising broker, you have a mentor for the first two years, if you've got very limited experience,”said Anthony Landahl. “I have had people mentor me in my commercial business, because it's all about being able to learn from someone that has been really successful in what they're doing. So don't be afraid to go out there and find yourself a mentor, someone that is more successful than you, that's going to be able to help you with those deals.”
Others focussed on knowing how to value yourself within the market. “What I found with getting into commercial was that the best part about it was that I could set my own fees,” said Nick Harper. “Your fees as a residential broker are dictated by the lender. Whereas now, in my business, my fee to the borrower is dictated by myself and how much work I think is involved.
“I can set my fee at half a per cent for a large transaction, and two and a half percent for a smaller transaction. It means I've been able to grow my business and my revenue, without having to take on large amounts of extra work, or additional staff, because I'm just able to set my own fee, for what I think that deal is specifically worth to me.”
Judy Corak was quick to point out the importance of having a mandate from a client. “I think new brokers and people in the commercial space need a mandate for a couple of reasons,” she said. “Mainly as it secures your fees and it also allows you to keep your client, but it allows them not to shop around your back.”
“To do the work, don't be afraid of asking for a mandate. I think a lot of new brokers come in and they think ‘gosh, shall I get a mandate, I might lose the client if I put my fees up’. Don't worry about it. It's your business, you want to increase your revenue. You want to make a livelihood and everybody has to shine. We’re all going to make money. So let's put that aside. Get your mandate, know your fees, know your structures and go forward and try to deliver as well.”
Finally, Andrew Way spoke on the importance of going further than the big banks when looking for finance, especially in the commercial space. There is a large number of SMEs with good assets, good reasons to borrow, who are talking to banks and ordinarily should, but the banks are not listening,” he said. “They're not there for them within the timeframe that they need.”
“We use an acronym DUO that describes the type of borrowers that come to us: the D is ‘deleverage’. They've got too much debt and it's strange in this market, when interest rates are so low, but they may be on a higher rate of interest by nature of the fact that their income has suffered through COVID. They need to deleverage. We can help them deleverage. The banks usually got a little bit fed up with them, so we'll help them deleverage back to serviceability, before they go back to a bank.”
“You've got the U, which is unbundling. Typically, businesses might be with one bank and they've got them strapped up, across all their assets and they want to extract some equity, but the bank says ‘no, we're quite comfortable during this time where we are’. So, someone like Nick, or other introducers bring them to us and we will then take each asset to a different lender and unbundle them and take asset income that way.”
“The last one is simply O, for opportunity borrower. Somebody who's taking advantage of somebody else's disadvantage, which unfortunately we're going to see more of. They need to do it quickly because the person selling needs the money quickly. So, the person buying does too, and that is suited to the bespoke lending space that we're in.”
You can watch the whole panel event here.
