Borg Financial’s Christopher Borg spoke about how his clients are in a state of panic over their financial future in the wake of the economic fallout from the COVID-19 pandemic.
A Melbourne-based broker has noticed an influx in enquiries from small and medium-sized enterprises (SMEs) and individual clients around the economic impact of the coronavirus pandemic and how the federal government’s measures can assist them.
Christopher Borg, founder and director of Borg Financial and Victoria/Tasmania Rising Star award winner at the Better Business Awards 2020, told the Elite Broker podcast that anxiety levels amid his client base had increased significantly given the uncertain economic future. This has particularly been the case for those whose employment is in jeopardy, he said.
Mr Borg outlined that he had therefore been receiving more enquiries around COVID-19 support measures, such as deferrals of loan payments, and other measures implemented by the government and lenders.
“There’s a lot more panic in my customers in terms of, essentially, what’s going to happen in the future,” he told The Adviser.
“At the end of the day, this is a temporary situation that we’re in, but it has affected our whole global community.”
Mr Borg was supportive of the government’s Coronavirus SME guarantee scheme, which is helping provide up to $250,000 in unsecured small loans.
The scheme will support up to $40 billion in lending to SMEs, including sole traders and non-profit organisations, in a bid to assist them through the economic impact of the coronavirus outbreak.
Several non-bank lenders have been announced as official participants of the scheme, including Prospa and Liberty.
“I think this is a fantastic initiative from the government to really assist small businesses with the current situation that we’re in,” Mr Borg said.
He added the scheme would be particularly helpful for those brokerages and small businesses with PAYG employees, or for those businesses where business inflow has reduced due to social distancing measures.
“But I guess this just shows a way for people to adapt and change to the current environment,” Mr Borg said.
“This is the time where you have to spend that effort into really approaching your market strategy and involving your business to a level where you can get those leads in through a different avenue rather than what you’re initially used to.”
Financial literacy in Australia
Later in the podcast, Mr Borg observed that the royal commission provided unprecedented exposure for the broking industry, which consequently meant the level of awareness of what brokers offer increased.
Having established his business in April 2019, two months after the release of the final report from the royal commission, Mr Borg said he was warned against establishing a brokerage at that time given the tumult and uncertainty, particularly around the status of trail commissions for brokers.
“I just said: ‘People know more about mortgage brokers right now than ever’, and that’s just simply because it was all in the news,” Mr Borg said.
“At the same time, your clients are a lot more aware of what we do and they’re willing to listen. They want to see what other options they’ve got available and that’s exactly what we’re here for.”
Commenting on overall financial literacy levels among Australians, Mr Borg said clients are more familiar with their current financial position and more informed about their options and the home loan application process than previously.
“When you have a conversation with clients, they already have some sort of understanding of what they are going to require to actually apply, or they’ve already done their homework,” he said.
“They’ve already gone to a couple of banks, gotten a bit more information, but it’s just too overwhelming for them. That’s where the broker steps in.”
To hear more from Christopher Borg and to listen to the entire Elite Broker podcast, click here.
Keep an eye out for the May edition of The Adviser to read more about how the broking industry is adapting to the COVID-19 pandemic.