Broker Q&A: Peter Smith, Red Finance

I became a broker about nine years ago, but my background is as a corporate commercial relationship executive for one of the big four banks. I’m corporately trained in terms of commercial finance, so when I went into broking, it just dovetailed into it.

Who are your primary referrers when it comes to commercial deals?

My normal referral sources are accountants. I also deal with commercial real estate agents and get general referrals from people I’ve written deals with.

How do you keep yourself and your staff educated in commercial lending?

The aggregator I’m with, FAST, works with commercial lenders and holds PD days.

My business did a commercial conference early last year in Melbourne which was all commercial-based, so all the lenders and commercial brokers from across Australia were among those who attended.

I also get a lot of the commercial lenders that I deal with to come out and talk to me about various things – financial markets and all the options that can be done with commercial bills. I could have three or four of the commercial lenders I deal with come out on a monthly basis.

So what do brokers need to do to ensure they’re fit to write commercial loans?

First of all, I’d say talk to your aggregator because they’ve got to agree to support your application for commercial accreditation. Some of the banks also offer to train brokers in that regard.

Education is critical. It’s not just about aggregators and banks saying 'yes, you can write commercial'. They’ve got to be satisfied – particularly the aggregators – because they’re a large part of it.

Do you see more brokers diversifying into commercial lending over the next 12 months?

The market is going to dictate whether they jump into it fully. If their business is going through a slowdown, you’ll see more diversification because they need to keep income generating and grow their business.