Low interest rates offer small to medium-size businesses excellent opportunities to own their own premises and say goodbye to the rental roundabout
A great deal has been written about residential property lending and there are thousands of brokers throughout Australia who are very successful in this market.
But now is the time to consider branching out to commercial property lending, particularly while interest rates are at historiclows and many small to medium-size business owners are opting to take advantage of this to leave the rental rat race behind.
Diversifying into commercial property lending allows brokers to provide a full range of services to their existing business clients. Some brokers have referral arrangements in place with other commercial brokers who specialise in this area, but they are then missing out on extra revenue streams that could bolster their income.
Because the commercial facility is normally larger and more complex by nature than normal residential lending, a higher level of expertise is required from the broker, the BDM and the credit area of the bank.
An added bonus is that commercial lending can be a great segue to a residential product transaction as an add-on sale.
IMB Bank has a dedicated team of BDMs who specialise in assisting brokers with commercial property lending.
IMB Bank’s BDMs offer brokers personal service and guidance to ensure easy progress through the loan process. Once a loan has been lodged, the IMB Bank assessment team is also available to discuss any issues.
IMB Bank’s Fully Drawn Commercial Loans are designed with flexibility in mind to help customers purchase the property they are renting or add a commercial property to their investment portfolio.
Competitive fixed or variable interest rates with loan terms of up to 25 years and an LVR of up to 75 per cent make an IMB Bank Fully Drawn Commercial Loan an attractive proposition.
Loans may be secured by commercial, residential or industrial property.
At present, there are nil-application fee offers and because IMB Bank has a small team of specialists, they are highly agile and flexible with quick turnaround times.
Experience in commercial property lending is essential for BDMs to help brokers move into the market. IMB BDMs have had many years working with third-party channels and not only know how to assist brokers but they also really understand the fundamentals of operating a small to medium-size business.
It is crucial to know the small to medium business marketplace and to realise that no single solution fits everyone. Each business is unique and each business owner is unique.
Therefore you really need to have experience to help them with products that suit their individual requirements.
Brokers considering commercial lending need to understand financial ratios, the impacts on cash cow of creditors and debtors plus skills in cash-cow forecasting and budgeting. Many brokers are SMEs themselves so they understand the needs and the impact of relationships, products and services.
If you are considering adding commercial lending to your portfolio, with current low interest rates, now may be the perfect time.
Rob Ryan is CEO at IMB Bank
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