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Brokers ‘are working harder than ever’

by Reporter5 minute read
Brokers ‘are working harder than ever’

A new marketplace lender has released a whitepaper highlighting that the complex lending market is leading to brokers “working harder than ever to source the right loans for their clients”.

According to Zagga’s new whitepaper titled Reshaping the lending landscape: How are today’s trends affecting tomorrow’s market?, the regulatory crackdowns and scrutiny on lending have helped alternative lenders increase their market share and gain further traction with the third-party channel.

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For example, one of Australia’s largest non-bank lenders, Firstmac, recently revealed that it had added more than $1 billion to its loan book in just four months, taking it past $9 billion in mortgages under management.

The Zagga report reads: “In a tighter credit market, introducers and intermediaries — such as brokers, financial advisers and even professional services firms — deliver value by problem solving for their clients. Understanding which lenders will consider different deal dynamics mean they are able to find funding for clients who may have been turned away by major lenders.

"Zagga has increased its presence among intermediaries, as it’s able to provide solutions for deals with strong fundamentals but which fail to meet the more generic approach of the major funders. While the more difficult credit market creates challenges for brokers, it also means they can demonstrate their value."

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Speaking to The Adviser about brokers’ value proposition, CEO Alen Greenstein elaborated: “I think as far as brokers are concerned, because they are in the market all the time, they see all of the opportunity that is out there. There is no doubt in my mind that today, the average man in the street, the average businessman, or anyone that needs money, really understands all the options out there and all the places they could go to have their borrowing requirements met.

“So, going to a broker is really a one-stop portal for a borrower to be really given all the options. So, a good broker, a competent broker, someone who knows all their stuff, would really be able to introduce their clients to many, many more options than the client would be able to find for themselves.”

Mr Greenstein highlighted that mortgage veteran Clive Kirkpatrick (the general manager of lending at Vow Financial) is a senior consultant for business and network development for Zagga. 

The Zagga CEO said: “We are lucky enough that some of the people we have on our team, such as Clive Kirkpatrick, are very well connected with the broker market, and as a result of that, we have reached out on a selective basis to brokers to say ‘this is who we are and what we’re doing’. 

“But we know we cannot be all things to all people. While we like to believe that we can fund a wide variety of loans and know that we can, we can’t fund every deal that comes our way, and we certainly don’t want to… But we’d be honest enough with the brokers so that they know that quickly.

“For us, the next best thing to a quick yes is a quick no… but we welcome every broker to run through the deals with us and test us out on a transaction.”

While Zagga launched in Australia just three months ago, it says that it is building its relationships with brokers and aims to have a close working relationship with the third-party channel.

[Related: Complex lending market has ‘winners and losers’]

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