While the fundamentals of lending and assessing a loan application are the same whether you’re looking at a home loan or a business loan, the difference is in the quantity and type of information required.
A commercial loan evaluation is based on a written submission, which will be your (the broker’s) interpretation of the information provided by the client, along with an analysis of the risks associated with the transaction. The process of risk assessment and whether to approve an application is a based on an exercise of informed judgement, not box-ticking, with consideration given to both quantifiable and non-quantifiable variables.
Your role as broker is to present the non-quantifiable aspects of a proposal; to build the story behind the business, the individual and the request for finance. The best place/time to gather that information and build that story is at the first client interview, and the best way to make sure that both you and the client get the most out of the interview is by following two simple steps:
Do your research
Build your knowledge of the client and their industry in advance of the interview. Have a look at the client’s website and their LinkedIn profiles to get a flavour of their business, and seek out information on their industry from industry bodies or trade publications. This helps you have a good handle on the challenges and opportunities within both their business and their industry.
If you have existing connections in the same industry, ask for their insights. You could also talk to BDMs from a commercial lender, asking them to share their views and any particular industry watch-points.
All of this background research will help to set a good first impression, showing the client that you have done your homework. It will also set you up for success in terms of being able to structure your interview questions appropriate and address any perceived risk with the business and industry.
Create an interview plan
Be clear on your core objective – what do you want to come away from the interview with? And prepare a compelling opening; address who you are, why you could be a great partner for this client, and how you will work together.
Be clear on what differentiates you from the competition; what is your personal value statement? What testimonials of past examples of success can you share? And ultimately, what’s in it for the client? Make sure to put yourself in their shoes!
Set a clear agenda and prepare your core questions to ensure clarity around the purpose for the loan request, the background on the individual and the business, their banking requirements, competition and who the decision-makers are. This will help you to build the story around the client’s needs and to qualify the opportunity.
Ultimately, the first interview is your opportunity to impress the client and is the springboard not only for a successful commercial deal, but for a valuable and long-term relationship. By putting in a little time and effort in advance of the first meeting and following these two simple steps, you can start the relationship with confidence and set you and your client up for the best outcome.
John Kolyvas is the national partnership manager of third-party commercial at ING Direct.
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