Is short-term lending worth the effort? That question answers itself when you discover you can earn $5,500 commission within five days.
And you can provide your client with a customised, compliant solution at best-in-market rates while you’re at it.
Consider this actual lending scenario involving a Melbourne business:
Situation: A leading retailer required urgent funds to assist with stock purchases
Loan type: Caveat supported by registrable second mortgage
Loan amount: $250,000
Loan term: Six months
Turnaround: Five working days
This scenario clearly demonstrates how short-term lending can create an alternative income stream that can be highly profitable.
It also shows how a short-term loan can provide a significant return on the time invested. Transactions are generally completed within three to 10 days, with the broker paid on the day of settlement. And there are no clawbacks.
Another lesson to be learned is that brokers can have two bites of the cherry when they help clients access short-term finance. They not only get the upfront commission, but can also do follow-up business because clients will often seek refinancing at the end of the short-term loan.
Diversity in business is an often-used phrase. However, for diversification to be embraced, it must correlate with profitability. Key obstacles for diversification are the time and resources involved, which can affect the motivation.
Short-term lending provides a direct opportunity for brokers to boost their bottom line, expand their client base and strengthen their service offering. We encourage brokers to realise the potential of this growth market and its lucrative opportunities with confidence.