Specialist lending is all about offering solutions

Many SMEs have a mix of trust and corporate structures that make it difficult to meet the credit guidelines required by the traditional lenders. By examining the client’s overall position and offering servicing verification via an accountant’s letter, or 12 months of business activity statements or 12 months of bank trading statements, a specialist lender can provide solutions that other lenders may overlook.

Often the funding requirements of self-employed clients are different to those of an employee, in that they are often looking to refinance to provide working capital for their business, to pay out ATO obligations, to fund expansion of their business, to buy their own commercial premises, and for self-managed super fund loans.

All of these are quite common scenarios that many traditional lenders decline to even consider regardless of the individual client’s circumstances. The broker who looks at all options for their client can offer specialist lending alternatives that meet the client’s unique circumstances.

Specialist lending is so much more than the old ‘non-conforming’ lending. Yes, some of the scenarios do involve credit impairment, and this is where the specialist lender will look beyond just the CRA and ask: “What was the cause of the defaults and judgements?” The majority of clients try to do the right thing, but sometimes life can kick them when they are down. At La Trobe Financial, we call them ‘life events’.

If the client has a legitimate life event as to why they ended up with defaults, judgements or arrears, a specialist lender is prepared to consider the circumstances and lend accordingly. A classic example is when a marriage has broken down and the client is vulnerable emotionally and is so busy trying to put their life back together that some of their financial obligations may get pushed to the side.

When the life event has been resolved and the client is trying to get back on with their life, they need a lender who will look at the big picture, taking into consideration their capacity to repay, that they want to settle their debts and move on with their lives.

Specialist lenders can offer all of these solutions as well as a number of niche areas such as rural or rural residential lending for a self-employed client. Construction funding for self-employed or credit-impaired clients can be very difficult to source from traditional lenders, but specialist lenders look at the full details of each individual client, matching the client with the most suitable solution.

Specialist lenders such as La Trobe do not credit score or assume that all clients are the same and, as a result, they can offer solutions that really meet the individual client’s needs. The broker who needs a solution for that client’s current need should look to specialist lenders to provide the unique answer. The broker who does this will find their clients stay loyal and are their best referral source.

Finally, specialist lenders such as La Trobe offer individual service from the BDM through to the credit team and then all the way through to settlement. If the broker is unsure of any aspect of the deal, they can call and speak directly to the credit analyst, their BDM or settlement team. That is the sort of service offered by a specialist lender such as La Trobe Financial, and we also do not claw back commissions.

Suzanne Hemsworth is senior manager of client partnerships at La Trobe Financial.