'Half of my business is commercial lending'

“We offer commercial, equipment finance and residential lending, and most of our clients are business owners and professionals,” he said.

“All of our team have commercial-lending backgrounds, and this provides us with the expertise and experience to look after our clients' commercial-lending needs.”

Mr Encina said brokers should be taking advantage of the sector, but need to be cautious in doing so.

“There are opportunities, but a client will quickly know if they are dealing with a broker [who is] inexperienced in this area,” he said.

“Brokers wanting to make commercial lending a core part of their business need to upskill in the products, jargon and bank policies, develop some good bank contacts who can guide you through the lending process and take a long-term view, as most commercial clients prefer long-term relationships.”

Mr Encina noted that commercial loans aren't as challenging to write as many brokers believe.

“It is not difficult from a technical aspect, but I would say the greatest challenge is the time taken to write a commercial loan and the number of factors that can derail a loan from getting to settlement, which are much greater than residential loans,” he said.

Looking ahead, Mr Encina said the commercial lending space is looking optimistic for brokers interested in pursuing this revenue stream.

“I think in the under $2 million space, the commercial market for brokers will grow as banks continue to simplify their loan assessment and products to be similar to residential loans,” he said.

“Above the $2 million level, it will very much be a space dominated by brokers who have strong lending experience and skills.”