Mortgage brokers have been urged to be more active in the SME lending space, in a bid to diversify their own revenues while simultaneously helping other businesses obtain crucial funds to grow.
According to SME lender OnDeck Australia, around one-quarter of a mortgage broker’s existing home loan clients are likely to also be business owners, presenting a unique opportunity to help them obtain holistic finance solutions.
Meanwhile, the banking royal commission’s recommendation to scrap trail commissions for brokers, which has attracted heated political debate, has highlighted the dangers for the broking industry to rely on a single source of revenue.
“There is clearly strong demand for SME finance, making this a revenue channel that brokers cannot afford to overlook,” said Michael Burke, OnDeck Australia’s head of sales.
“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.”
According to the lender, SMEs are increasingly likely to be seeking out finance, with the Reserve Bank noting a recent rise in capital expenditure by Australian businesses.
It comes as the major banks pull back on lending across the board after being stung by the royal commission, with ANZ CEO Shane Elliott recently conceding that the big banks have been responsible for a downturn in mortgage lending.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.