Q. What made you decide to launch your own brokerage?
A lot of brokerage businesses out there were residentially focused and I’d done quite a lot in the corporate commercial business lending space and wanted to do more.
There wasn’t a lot around in those times. We decided that we wanted to help businesses grow and that’s how we came up with Grow Capital. We just had an idea. We wanted to do something different.
Q. How does the industry today compare to when you started Grow Capital in 2013?
A lot of it is still similar … it’s a few years behind the residential space, particularly from the technology perspective. Some of the issues are definitely there [in terms of] data capture, data transfer, that sort of thing.
There is a lot more compliance coming into the commercial lending space. [But] then you’ve got the same old ones with the clawbacks and that type of stuff. The disintermediation.
All of those things still exist to a lesser degree at this juncture, but they are still around here.
Q. How did you find your first clients?
Because I worked in the third-party space, a lot of [my contacts] were other brokers; I didn’t have a lot of direct client relationships. So I spent a lot of time, particularly in that second six months, talking to accountants, corporate advisers, and financial advisers.
A lot of them already had relationships. At the time, I would go and say, “Why don’t you give me your hardest deal? And if I can get that done, perhaps we can build a relationship.”
What I found was that’s what was happening anyway. The first deal would always be the one in the bottom drawer that had been sitting there for two and a half years that no one could solve. We won a lot of goodwill from doing a bit of that.
Q. You’ve recently brought in an external business coach. Why?
We knew we had to put people on, we just weren’t sure where. We didn’t know what order was best. It’s hard when you’re in the weeds doing it yourself day-to-day. There’s just a lot going on. And so we wanted that external input.
We’re now seeing more private credit, more term loans, enterprise value-style lending, which is back to the future
Q. And are you seeing any changes in the types of funders you’re using?
The private credit space is becoming enormous in Australia, particularly in the $1–$10 million space.
The merchant banking style or cash flow lending that used to exist back in the 90s and early 2000s sort of disappeared for a while and it was only the banks in that space. Then we had invoice financing come in. We’re now seeing more private credit, more term loans, enterprise value-style lending, which is back to the future.
But it’s a really good thing and it provides more options.
Q. What advice would you give to a new broker who wants to follow a similar path?
Having the right intention is a big one. If you’re doing this for the money or thinking of doing this for the money, it’s the wrong idea. It’s not the easiest of businesses.
You need to have at least 12 months of income up your sleeve or saved/have access to before you start in this industry. You might earn prior to that, but to be safe, you need to have at least that.
If you haven’t worked in the industry, a mentor is really important. And finding the right association for you and the right aggregator as well.
