As some banks seek to reduce broker flows, a new SME-focused lender has emphasised that its proposition is “purpose-built” for brokers and SMEs.
The managing director of third-party distribution for newly launched SME lender Judo Capital, George Obeid, told The Adviser that the lender’s broker proposition is purposely designed around “trust and transparency”.
He explained that over time, brokers (or, as Judo calls them, “foundation partners”) will have access to the lender’s customer relationship management (CRM) system and “deal builder tool” that will enable them to track the progress of transactions in real time or receive automatic notifications as transactions move forward.
Where communication is required, brokers will be able to engage with Judo’s “bankers”, who are the predominant decision makers, directly through the platform and will be able to recommend changes to applications directly through Judo’s system.
The managing director of third-party distribution stressed, however, that while the lender is keen to take advantage of the latest in technology, it is not defined by it. Technology is an enabler of its “relationship-centric” proposition.
“We are a relationship-based business that puts the broker and the customer at the forefront, not a system or technology,” Mr Obeid said. “We believe going out and meeting with brokers and customers is the best way of understanding the risk involved and the clients’ requirements, rather than putting it into a system to make decisions for us.
“We are looking to bring back banking as it used to be, banking as it should be, empowered by judgement-based lending.”
The lender — which offers SMEs business loans, lines of credit, equipment loans and finance leases, with home loans to be added to its product range in the upcoming weeks — has hand-selected experienced commercial brokers to join its network in the initial phase of growth.
“Early on, we are really focusing on brokers who have commercial acumen, [who] understand how to structure a commercial deal or [have] a strong desire to build on their commercial knowledge and do more commercial loans,” Mr Obeid said.
The managing director of third-party distribution, who was brought across from ANZ bank in January last year, also noted that Judo will be developing an education program to help brokers understand the intricacies of commercial lending and train them on structuring commercial deals.
Mr Obeid said that Judo has intentionally recruited experienced bankers who are well versed in commercial deals, granting them the authority to make lending decisions, rather than expecting them to palm applications off to credit departments.
The lender, which is currently in the process of obtaining a banking licence from the Australian Prudential Regulation Authority, expects its “bankers” to make the final decision on the majority of applications they assess, and within five days of receiving them.
Mr Obeid further stressed that these decision makers, or “directors of relationships”, do not have sales targets and are incentivised by doing the right thing by two people: the broker and the customer.
“By doing it this way, we believe we will achieve the outcomes we desire,” the MD added.
For Judo, the quality of the business and the character of the people involved in the business are the priority in the assessment of an application, followed by collateral and other assessment criteria.
Security is not something that Judo overlooks, Mr Obeid noted, but factors such as cash flow and the amount of capital ready in the business are prioritised.
“Security might be more important when we’re dealing with start-ups as Judo would be taking on more risk, but if a well-established business with good cash flow came to us, we’ll take comfort out of that rather than bricks and mortar,” the MD explained.
Judo launched officially in Melbourne at the end of March with 40 staff members and will be expanding gradually into other states in Australia over the coming year.
Tas Bindi is the features editor for The Adviser magazine. She writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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