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In a challenging time for new loan applications, there remains a largely untapped part of the market offering plenty of opportunities: self-employed and credit-impaired customers.
Regional sales manager Steve Wallace, who’s been with Resimac for more than 20 years and is responsible for BDMs in five states and territories, is vastly experienced in helping brokers take advantage of new opportunities.
In this Q&A, he explains why brokers are well placed to serve self-employed and credit-impaired customers.
What are the opportunities for brokers when it comes to self-employed and credit-impaired borrowers?
Working for oneself has become more attractive in recent years after COVID-19. Meanwhile, borrowers who may have lost income or experienced adverse life events during the pandemic have since improved their position.
These types of borrowers, who don’t fall into the traditional credit categories of the banks, need the expertise of brokers to help them with lending solutions that support their personal and professional needs. Servicing self-employed borrowers also presents an opportunity to talk to their accountants, who themselves can be a great source of referrals.
What should brokers look for in a lender when it comes to solutions for these borrowers?
Brokers should look for a lender that has flexible products, a commercial approach to credit assessment, and knowledgeable BDMs who are happy to go the extra mile to help get deals over the line. Also ask whether the lender serves borrowers in most Australian towns. Resimac does and this can maximise your chances of success with a client.
These borrowers are not round pegs going into round holes, so you really do need tailored products and an expert team to assist.
What kind of support does Resimac offer brokers with these clients?
Our BDMs are self-employment specialists. They can help you work through the client’s financials and give feedback on lending potential.
The calibre of our BDM team has been repeatedly highlighted this year through numerous industry awards. They also have great relationships with our credit managers, who are always open to discussions on how we can make an application work.
Our BDMs have such an intimate knowledge of our products and policy that they can think outside the box to help brokers turn a decline into an approval. This could mean working with a broker to restructure an application or finding other ways to provide a security, prove income, or demonstrate business profitability.
What are the misconceptions of working with self-employed and credit-impaired borrowers?
The main misconceptions are that these kinds of borrowers are complex and take more time in preference to the quick hit PAYG/non-complex client.
The reality is that the reward of serving these borrowers can potentially be greater than with standard Prime clients. These borrowers are usually in more need of the help of a broker, have a greater likelihood of offering repeat business with other financial needs (such as debt consolidation or asset finance), and can make for great referrals.
What are the main hurdles self-employed and credit-impaired borrowers face when applying for a home loan?
The main hurdle is that they won’t see themselves as a non-Prime borrower. So, when they’re turned away by one of the main banks, they don’t realise that there are lenders like Resimac that have loan products designed just for them. Obviously, this is where brokers can help.
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