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Now is the time to strengthen your commercial lending acumen

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Chris Thomas 4 minute read

With challenging business conditions set to continue in 2020, the need for brokers to build up their commercial acumen has never been stronger, writes NAB general manager, commercial broker, Chris Thomas.

With over 2.1 million SMEs in Australia, there remains a growing need for trusted advisers to not only help business owners understand their businesses better, but to also stand by their side through the good and the more challenging times.   

At NAB, we believe brokers are well positioned to do exactly this. As many brokers are small business owners themselves, they can bring empathy and understanding to the table which resonates with business customers. 

However, in order to be a trusted source of advice and support, brokers too have an obligation to build their business acumen by having a solid plan in place. 

Challenging business conditions to continue well into 2020 


2019 was a challenging year for businesses across the board. The latest NAB Monthly Business Survey revealed business conditions have stabilised at low levels, after significant declines in mid-2018 and 2019. 

Business confidence also remains well below its long-run average and we expect these conditions to continue to challenge small businesses over the next 12 months. 

Gaining access to suitable finance options that don’t purely rely on property security is another concern for small businesses we expect to continue in 2020. 

Certainly, this has been the consensus among key industry bodies. Reports released by the Council of Financial Regulators with members including the Reserve Bank, APRA, ASIC and the Treasury reveal tighter lending standards for small business has been a significant focus in recent meetings. 

Looking at our own figures, business lending grew at 3.5 per cent – well above our peers. A significant bulk of growth is focused around targeted sectors including health care, agriculture and professional services. 

Currently, NAB lends around $3 billion a month to small-to-medium businesses in Australia and the broker channel is a crucial component of this. 

Desire to diversify into commercial lending isn’t enough 

The reality of the current business environment has changed the narrative around what brokers need to consider before diversifying into commercial lending. 

Experience has shown that just having the desire to diversify into commercial lending isn’t enough on its own. Brokers also need to invest significantly in themselves and their business model in order to succeed. 

We believe the current environment creates a strong obligation for brokers, both emerging and established, to elevate their existing skillset to deliver the best possible outcomes for business customers. 

Having a deep understanding of a business customer’s financial needs as well as how they are currently performing relative to their business strategy and aspirations is critical for brokers to provide strong advice particularly when conditions and confidence aren’t high. 

For newly emerging commercial brokers, having a network of partners such as aggregators and lenders that can be leveraged for support is equally important. 

Ongoing training and education is essential 

As the bank behind brokers, NAB provides a relationship-orientated value proposition, where we work alongside our brokers over the lifecycle of their customer’s business. 

As industry accreditation standards tighten, we continue to invest in leading broker education and training to support brokers to build up the necessary commercial acumen to operate successfully in the current business environment. 

This investment has been brought to life through education and training initiatives such as The Adviser’s SME Broker Bootcamps held in November last year, which helped brokers to understand exactly what is required to move into commercial broking. 

For those already established in the space, we also run weekly sessions in our business banking centres across the country, providing local brokers with an understanding of more complex financing options such as trade and invoice financing. These sessions empower these brokers to have more valuable conversations with business customers. 

Last year we also invested in a further 26 broker-aligned bankers, taking our overall number to in excess of 500 nationally. This was part of the biggest investment in bankers we have made in our business bank in a decade.

Ultimately, we believe those brokers who have the elevated capability and skills to meet the varied and diverse needs of Australia’s business owners will be the ones that continue to thrive in the future. 

The start of a new year is a good time for brokers to consider what specific actions and strategies they are going to put in place to fully diversify their business into commercial and SME lending and we are here to support every step of the way.

Now is the time to strengthen your commercial lending acumen
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Chris Thomas

Chris Thomas

Chris Thomas is the general manager, commercial broker at NAB.

 Since joining NAB in 1988, Chris has held several front-line senior leadership roles within the bank’s Business and Corporate Banking divisions. His roles have largely focused around delivering positive outcomes for thousands of SME customers. 

In 2013, Chris established the Commercial Broker division within NAB’s significantly large business bank. In his current role, he leads a team of highly professional business bankers, working to build strong relationships with the broker market to ultimately help SME Australia grow and prosper. 

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