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As a broker, chances are you already have SME clients in your back pocket. The Adviser’s New Revenue Streams Boot Camp revealed how brokers can assist these clients with commercial lending, courtesy of those who know this lucrative market best.
“When you think about commercial lending, we believe that brokers participate in 25 per cent of business lending transactions.
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That is, brokers are the trusted adviser to about two million SME owners in this country as they look to arrange their financing with banks.
What we’ve done to support the broking industry is to build a commercial broking team of dedicated people. They’re experienced, they know how to workshop transactions, they can make decisions and they have access to in-house credit.
That team is dedicated to supporting the broker industry [being connected] to their clients because at the end of the day we work together to get the right solution for the end customer.”
Chris Thomas, head of commercial broker, NAB
“Small business owners, more than 97 per cent of the time, make decisions based on emotion. That means you have to deal with them differently.
The first thing you need to know about SMEs is they’re more complicated but for you that shouldn’t be a challenge, it’s a fantastic opportunity because most business bankers don’t understand this demographic.
The reality is these people need a trusted adviser to help them navigate this complicated pathway.
Being in small business isn’t easy, it’s not without risk, but can you make a success story out of it? Of course, there are stacks of stories in Australia of people starting a small business in their garage at home, in mum’s basement, and they’re now multi-millionaires.
It’s all about understanding the people you’re dealing with – they are nearly always innovators or early adopters.
Look at your client base. How many clients have you actually got who are SMEs? Have you got an avatar of what they look like? What are they worried about? Can you get closer to an accountant who works with small business owners? Then develop a strategy around that.”
Craig West, executive chairman, SME Association of Australia
“[Working with SMEs] can be daunting, but there are easy ways to do it. Lenders have a high appetite to help you do this.
I think the key thing is to understand or develop a strategy, so rather than drink from a firehose, work out where the key low-hanging fruits are.
I would encourage you to talk to your aggregator or a trusted adviser. There are good accountants out there who can help you with this and certain lenders as well.
The reality is 10 to 40 per cent of your existing client base is SME owners, and if you don’t start looking after them, someone else will.”
Brendan Wright, CEO, FAST
“To move into a new market is really like setting up another business, and it’s about going back to some basic 101s in terms of business planning.
You absolutely need to understand the market that you’re moving into – you intimately need to understand small business and what’s important to them.
You also need to understand who your competitors are and what strategies you can put in place to face them.
Another thing that’s really important is looking at your strengths and weaknesses as a business – how can you improve? What things can you change that will allow you to be able to move into offering more products than just a home loan? Does it make sense to start outsourcing some of your operations? Does it make sense to bring in an administration person to enable you to focus on small business?
Do a gap analysis. Figure out where you want to get to and what are the things that you need to be able to do to help you get to the end game.”
Robynne Frost, national manager for SME and commercial lending, Suncorp Bank
