Credit: Real estate broker agent and customer shaking hands after signing contract documents for realty purchase Bank employees congratulate Concept mortgage loan approval.
The Banking Royal Commission has highlighted the perils of relying on a single revenue stream, and SME lender OnDeck Australia is urging mortgage brokers to think beyond home loans and diversify into SME lending.
Research by OnDeck Australia confirms that 25 per cent of Australia’s small to medium enterprises plan to seek additional business finance.
Michael Burke, Head of Sales at OnDeck Australia, said, “There is clearly strong demand for SME finance, making this a revenue channel that brokers cannot afford to overlook. Moreover, our discussions with them indicate that, on average, one in four of their existing home loan clients are SME owners, providing a ready base for brokers to market their services in the SME lending space.”
OnDeck’s study found that among those SMEs planning additional finance in the next 12 months, almost half (49 per cent) would consider a specialist financer.
“A lot of brokers and SMEs are realising that securing finance with an alternative lender is a way to avoid jumping through the hoops imposed by traditional lenders,” Burke said.
Qualitative research by OnDeck has confirmed that the constant back and forth between lenders and clients for compliance and information requests is extremely time-consuming for brokers.
Brokers don’t need experience in the SME channel
Moving into SME lending may take a broker outside their comfort zone. However, it is not necessary to have extensive experience in SME lending practices to successfully grow a revenue stream.
Burke said, “OnDeck Australia provides extensive support to the broker channel through our highly skilled Business Development (BDM) team. OnDeck works closely with brokers during the first steps in the journey, providing training and sharing best practice. If they prefer, an OnDeck BDM can speak with customers directly on the broker’s behalf, though at all times the relationship belongs to the broker.”