Login
ISCOVER
Commercial lending brings tremendous benefits to a broker's business, but no one pretends its easy. Here are six tips and warnings for brokers looking to diversify into this space.
1. Back to school
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Brokers need to educate themselves about commercial products, commercial customers and the nuances of the commercial market. One tip is to form a mentoring relationship with an experienced commercial broker. Aggregators, associations and lenders are also willing to help.
2. New script needed
Start asking different questions when assessing new clients. Brokers need to find out if clients are self-employed and then explain how they can help those clients grow their businesses.
3. Lender rules
Commercial accreditations are harder to earn than residential, because lenders demand higher standards with business loans than home loans. Different lending rules also apply and remuneration can be different.
4. Forewarned is forearmed
Commercial deals are generally more complicated and protracted than home loans. The financials can be harder to understand – think balance sheets, business plans, trusts, multiple directors and multiple entities.
5. Return on investment
Mastering the intricacies of balance sheets can seem daunting. But it will be time well spent for brokers if they themselves are self-employed.
6. Not for everyone
Ultra-successful home loan writers may find that focusing on residential is the best use of their time. Brokers who aren’t willing to make a real commitment to commercial may also be best advised to stay away.
