Interstate commercial lending alliance launched

The new alliance with sub-aggregator MLB will see Marketplace Finance offer its commercial referral services to MLB brokers, thereby assisting their diversification into commercial lending, Marketplace Finance has explained.

Marketplace Finance is a full-service commercial finance platform that delivers “comprehensive lending solutions” to brokers and their clients, it outlined.

Its seamless, white labelled portal allows referrers to provide an extensive range of commercial products to clients, it added.

Spanning all industries and featuring lenders across the Australian market, it “allows instant, big-picture access” with submissions from inquiry through to settlement, it confirmed.

My Local Broker has access to tailored loan solutions from “the best lenders in Australia”, it explained, with its local mortgage brokers providing “expert services” to clients from Albury, Ballarat, Bendigo, Geelong, Mildura, Shepparton, Warrnambool, Wodonga, Melbourne, Victoria, and across Australia, it added.

It has access to over 40 lenders and in excess of 500 products, it explained.

A huge opportunity through commercial lending

Speaking exclusively to The Adviser about the new partnership, Marketplace Finance head of third-party relationships and National Finance Brokers Day founder, Dino Pacella, said: “With only 30 per cent of mortgage brokers writing commercial loans, we at Marketplace Finance see this as a huge opportunity for us to continue partnering with quality businesses to help them expand their client base, increase revenue, and protect their existing clients through commercial lending.

“It’s why I’m excited for us to announce our latest partnership with the professional and forward-thinking team at My Local Broker.

“With our commercial referral offering now expanding to close to 2,000 referrers, we are keen to now be able to offer this service to the brokers of MLB and truly bring diversification to life into their businesses.

“I’d like to personally thank Caroline Pollard and all the team at MLB for their great work in bringing this partnership to fruition.”

Broker reluctance to ‘learn commercial’

My Local Broker national sales manager Caroline Pollard of the partnership explained: “With so much uncertainty in the current market, there’s never been a better time for brokers to diversify their business and tap into alternative income sources.

“Dino approached us at the perfect time.

“We have found that a lot of brokers are reluctant to learn commercial lending, or prefer to focus on resi only, whilst others are keen to learn but don’t know where to start.

“Marketplace Finance covers all bases.

“We are confident this will be a successful partnership!”

Diversifying portfolios into commercial

Earlier in the year, Mr Pacella clearly called out the emerging boon that commercial lending was rapidly becoming for a range of reasons.

He said with the current interest rate rises, rental concerns, property market ups and downs, and economic changes, more consumers are moving into the dynamic commercial market.

“With more awareness of the commercial landscape, consumers are now looking at diversifying their portfolios for not only potentially higher returns, but for the old age investment strategy of not putting all your eggs in the one basket,” he outlined.

“There’s several attractive pros when it comes to commercial properties.

“The majority of the time, we are seeing commercial properties outperform residential properties with higher yields.

“Landlords generally experience longer leases when it comes to commercial properties.

“They may not be the 10-year leases that we saw pre-COVID-19, but certainly they are extended beyond the average leases for residential properties.

“Another couple of hot reasons why we are seeing consumers move into commercial as an investment strategy is the greater tax benefits.

“This includes depreciation along with landlords having minimal outgoings (given these are the responsibility of the commercial tenant, which is the opposite for residential properties).”

At that stage of mid-2022, Marketplace Finance had experienced an uptick in consumer interest across development projects, industrial premises, and specialty premises such as childcare centres, service stations, and medical outlets, it stated.

“But with the pros of investing in the commercial market comes a few cons, and this is why consumers are seeking further clarity and relying more on brokers than ever before,” Mr Pacella reminded.

“I’ve always said that a broker’s knowledge of the market is their greatest asset, and being able to assist consumers with those initial enquiries is critical to winning present and future business.

“Some of the cons include that commercial properties are sensitive to economic conditions and this was heavily evidenced through COVID-19.

“With vacancy periods comes the historical data of longer vacancy rates and the reputation that commercial properties are harder to sell.” 

Mr Pacella assessed that Marketplace Finance was noting approximately 30 per cent of consumers using brokers for commercial.

“As with consumers using brokers for home loans, I see the percentage of consumers using brokers continuing to rise and I’m predicting that we will see 40 per cent come the end of 2023,” he predicted.

[Related: In a dynamic commercial market, customers are increasingly relying on brokers]