A Sydney mortgage broker has explained how a commercial loan can be either approved or declined by a bank depending on who works on the deal.
Commercial lending has been under the microscope in recent weeks following the appearance of the major bank CEOs before a parliamentary inquiry.
Many of the questions from MPs focused on the SME and commercial lending practices of the banks after the release of a damning report by small business ombudsman Kate Carnell.
Inconsistencies within the commercial lending divisions of banks have been flagged by Sydney mortgage broker and former banker Chris Sales in a recent podcast with The Adviser.
Mr Sales explained how two different commercial bankers working for the same lender can easily arrive at very different decisions.
“In commercial specifically, I'm very happy and very lucky to have good bankers behind me,” he said.
“It's true that you can place a deal with the same bank with two different bankers, and one banker will want to do it, and they'll push to get it done, and the other banker will probably not want to do it or find excuses not to do it.
“I have the bankers in the right banks that are going to do work for me. That's invaluable. It takes less stress off my job, and it allows me to leverage off their experience, as well.”
The Finance Warehouse director, who worked as a commercial lender with ANZ before becoming a broker, said that commercial lending remains a challenge for residential brokers, particularly those with no experience in the space. He recommends brokers build strong relationships with commercial bankers and BDMs.
“They're there to help. I think a lot of brokers, they find that if you're constantly arguing with your bankers and stuff like that, they know.
“When I was at St.George, you know the bad brokers, and you know the ones that don't want to work with you, and that definitely leaves a bad taste in the mouth of the people who are assisting your files. They'll look a little bit harder or a little bit closer if you're a broker that breaks their balls.
“Obviously you get frustrated with assessors, but it's important to definitely keep them on side because at the end of the day, they're the avenue that we take to get our clients what they need.”
[Related: Lenders have 'substantial work to do': ASIC]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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