Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Features/
Commercial & Business Loan Writers 2019
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Commercial & Business Loan Writers 2019

feature img feature img
Tas Bindi 10 minute read

The Adviser’s Commercial & Business Writers 2019, sponsored by Thinktank, recognises the best-performing brokers in the commercial property and business lending sectors. Tas Bindi finds out how the leading brokers stay on top of their game.

Leading brokers, aggregators, business advisers and industry bodies have long been espousing the benefits of diversification, noting that brokers who adopt a diverse business model will be better prepared to serve more of their existing and future clients’ needs. While it’s a common piece of advice, the rationale behind it remains sound.

As Adrian Lee, who took the top spot on both the Commercial Writers and the Business Writers rankings, says: “Economically, the main benefit of adding commercial and business funding to our portfolio [has been] that we can do more with the same client base.

“If you’ve done your job right, clients will want you to handle as much of their requirements as possible, so the business doesn’t need to incur as much of the time and expense typically related to business development. In short, you can bolt on revenue streams without necessarily adding on operational expenses.”

An area of opportunity that is often referred to in conversations about diversification is commercial lending, which is also considered a tough nut to crack as it requires additional work, such as analysing cash flows, balance sheets, and profit and loss statements. On top of that, commercial and private lenders often do not have fixed pricing and instead offer risk-based guidelines on a deal-by-deal basis.

Mr Lee says commercial and business lending is “quite a different game to vanilla resi mortgage broking”. This, he says, is because a lot of what can and cannot be done depends on how a transaction is presented and the relationship with funders. 

“There’s a lot more discretion at this level, and if you have good knowledge, relationships and execution capability, you can dramatically improve the end results for your clients,” Mr Lee says.

For Mr Lee, staying on top of his game means: staying up to date on the credit market, including knowing who has appetite for what and, conversely, who is peeling back due to economic views and capital restraints; ensuring that transactions are executed at the highest standard; and maintaining close relationships with funders.

Meanwhile, Daniel Green, director at Green Finance Group, says that there has been an increase in regulatory scrutiny of loan applications in the aftermath of the banking royal commission, resulting in “additional documentation requirements and lengthier processing time frames”.

“I’ve had to work harder to educate my clients around timing and preparation and the fact that just because their existing bank worked in the past doesn’t mean they’ll be receptive now,” he says.

“Being organised and starting the process as early as possible is critical to success these days, and that means finding the right solution for the client at that particular point in time, no matter what the lending landscape looks like.”

The Green Finance director, who ranked third on the Commercial Writers list and seventh on the Business Writers list, also notes the value of extending the broker-client relationship beyond transactions.

“It’s too easy to underestimate the knowledge that we have around business practices and processes,” Mr Green says. “Sharing the knowledge we have, helping people to craft their business ideas and stepping them through the related processes, including finance, extends the value of our relationship beyond a simple transaction.”

Partner Message

Image result for thinktank

It is a great pleasure to once again be associated with The Adviser’s ranking of the country’s Top Business and Commercial Writers. We would like to extend our congratulations to each of the successful brokers and businesses profiled in the pages ahead and acknowledge their outstanding achievements over the past year.

It is noteworthy to see five brokers appearing on each list which is testament to their success in demonstrating the provision of a range of finance solutions to their client base, while particular congratulations must go to Adrian Lee of Catalyst Debt Capital who has come in at number one on both, a sensational accomplishment in a competitive and challenging market.

We encourage you to take a moment to read through the profiles featuring in the 2019 rankings which comes at a time when the broker proposition is arguably greater than it has ever been in helping clients to manage variable economic conditions, onerous regulation, a tighter credit environment and greater unpredictability on the part of many traditional lenders. The individual stories on the following pages offer a great window on different forms of contemporary success in broker.

Broker Q&A

Adrian Lee, managing director, Catalyst Group

#1 Top 10 Commercial Brokers

#1 Top 10 Business Brokers

 

When and how did you get into commercial property and business loan broking?

When I started the Catalyst Group seven years ago, I was very much focused on residential mortgage broking, but I saw an early opportunity to carve out a niche for myself by providing premium clients with an old-fashioned private banking type service. Our speciality was working with high-net-worth clients that typically had complex structures and financials and required an experienced adviser to decode their financial position and act as an “interpreter” between them and a bank.

We quickly grew a book of high-end clients, most of whom were successful business owners, so the shift into small business and commercial was organic and gradual.

What achievements are you most proud of as a broker?

My proudest moments are always the conversations with clients whereby we move outside of purely arranging debt to managing their hard-earned money.

Money management is a long-term and very involved proposition. It requires a much higher level of trust in both character and capability. I know what it takes to trust someone enough to invest my money on my behalf, so each time we sign a new investment mandate, I know we’ve done everything right for that client leading up to that point. 

What was your biggest business deal this year, and how did you navigate it?

Our biggest mandate this year was for a $70-million development project. We managed a tender and negotiation process between almost 20 bank and non-bank funders and were able to produce an accurate cost-benefit analysis on behalf of the developer and their institutional investors. Our ability to efficiently procure a wide range of terms from many different funders was ultimately the reason why the developers, who already have longstanding banking relationships, engaged Catalyst Debt Capital.

What was your most challenging business deal this year, and how did you navigate it?

My most challenging deal this year was a multistage facility for a family office involved in aged care. Due to a sudden and unexpected death in their family, we were engaged to manage both the succession planning and a corporate debt restructure. This required us to raise a range of individual private finance facilities, and then roll them all up together into a banking facility, all whilst helping coach the successor into the business and advise their in-house legal and finance team.

There is a very human element to what we do, and this transaction was a great reminder of both the importance and challenges associated with that.

 What are your plans for the next 12 months?

We are putting together our own first mortgage fund, which will focus on providing investors with access to senior secured commercial loans at attractive risk-adjusted yields. So, the next 12 months for me will be a lot of “shaking the can” to bring capital into the fund and continuing to originate high-quality opportunities for the fund.

Ping (Penny) Huyan, director, Goldenwater Mortgage Services

#2 Top 10 Business Brokers

 

How did you get into commercial and business broking?

I had eight years of experience in financial reporting and auditing before I started a broking business with my partner Jason Fu. We thought we could utilise the accounting experience and combine it with finance knowledge to provide a comprehensive solution to self-employed clients. 

One of our good friends trusted us to do a commercial loan for a warehouse purchase, and another friend asked us to do a loan for his management letting rights purchase. We took our time to do research with different banks, communicate with bankers, and compare the pros and cons thoroughly.

We were honest about our level of experience in this field, but we had their trust in our skill set and character. These two friends are still our most valued business clients.

What achievements are you most proud of as a broker?

We’re proud of being named a finalist for The Adviser’s Commercial Broker of the Year award in 2018 and 2019.

Every year, we have deals that clients were about to give up on and were desperate to find help with. It’s very rewarding to turn these declined deals around and watch them start their new business journey with our help.

What notable trends have you observed in the business lending market recently?

We are specialised in management letting rights, hotels, motels and other commercial property lending. This industry is extremely specialised, and the sales and settlements are reasonably consistent year-on-year. It isn’t affected by the local housing market in general, as most of our clients are consistently investing in their businesses.

However, I do feel the tightening rules on residential lending have flow-on effects on business loan assessments. Some lenders may change their lending appetite based on how their current portfolio is performing or broader market risks. We will need to do more workshops with banks to ensure transactions meet all criteria.

Donald Yum, managing partner, IPS Partners

 #2 Top 10 Commercial Brokers

#6 Top 10 Business Brokers

When and how did you get into commercial and business loan broking?

I was quite lucky to get my hands into commercial and business loan broking back in 2008 – pre-NCCP and post-GFC – due to the trending regulatory and economical changes in the industry back then.

What do you love about being a broker?

As an ex-banker, I love the freedom of acting for the best interests of my clients by offering a much wider range of products and options, and the mental fulfilment that comes with my client’s satisfaction, achievements and gratefulness.

How do you stay at the top of your game?

Well, I still learn eagerly from, and enjoy partnering up with, a lot of great brokers and business operators in the game, every single day.

What was your biggest deal this year?

A $42-million development/construction loan in Sydney.

What advice do you have for brokers looking to write more commercial and business loans?

The best way to get into the commercial property and business lending space is by partnering with some existing players via joint-venture programs.

What are your plans for the next 12 months?

Yellow Brick Road and Vow Financial launched a broker program, known as CBLS (Commercial Business Lending Solutions), in March 2019. So, my main focus for the next 12 months is to help as many broker partners who are willing to get into commercial/business loans as possible through CBLS.

Daniel Green, director, Green Finance Group

#3 Top 10 Commercial Brokers

#7 Top 10 Business Brokers

 

What do you think makes you stand out from the crowd?

I consider my clients my business partners, and when I’m assisting clients secure finance, I view it as a long-term business partnership, not a transaction. I think my clients notice and appreciate that level of commitment, and that’s why I have client relationships that span decades and even generations.

What are you most proud of as a broker?

I always feel a sense of satisfaction when I am able to assist a start-up. Also, there are clients who I’ve been working with for years, and being a part of their growth plans, seeing them expand and succeed, that’s always a good reminder as to why I love what I do. After more than 20 years in the finance industry, I still enjoy coming to work every day.

What advice do you have for mortgage brokers looking to diversify into commercial and business lending?

Avoid the temptation to be a jack of all trades. If you are coming off a residential finance base, find your speciality or niche. When you commit to a speciality – mine primarily being within the hospitality and accommodation sector – you can really immerse yourself in those businesses, understand what’s going on at an industry level, and be in a position to provide your clients with the benefit of a deeper knowledge.

What are your plans for the next 12 months?

Growth through referral partnerships, particularly in the commercial property sector. Referrals have been the backbone of my business from day one and, currently, approximately 70 per cent of all business is referred from existing clients or business associates in the form of solicitors, accountants, business brokers and real estate agents.

Over the last few years, I have established relationships with some of the country’s largest commercial real estate businesses, and in the coming 12 months my team will begin working with a large franchise network of commercial operators to provide specialised brokerage services to a range of SME clients.

Additionally, I have appointed two new residential finance specialists who will initially focus on working with existing commercial clients to ensure current lending conditions are working in their favour. 

[Related: ]

Commercial & Business Loan Writers 2019
feature img
TheAdviser logo
feature img
Tas Bindi

Tas Bindi

Tas Bindi is the features editor for The Adviser magazine. 

Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business. 

You can email Tas on: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

FROM THE WEB
more from the adviser
peppermoney ta Pepper launches mortgage offering in NZ

Non-bank lender Pepper Money has launched mortgage lending operat...

arrow down business man ta Fewer mortgage brokers writing commercial loans

Contrary to industry expectations, the MFAA has reported a declin...

Eclipx Commercial ta SME lender buys Eclipx Commercial

SME lender Grow Asset Finance has purchased Eclipx Commercial for...