It is often said that the best mortgage brokers are trusted advisers. They look to support their clients over the long term, through home relocations, loan refinancing, investment property purchases and life events such as downsizing or sea changes. Long-term relationships like this mean the broker can rely on his or her client base for decades, and the client can count on personal knowledge and support of an expert when they make a lifetime of financial decisions.
In this competitive marketplace, many brokers consider diversifying into small-business lending, which gives them another revenue stream and a way to hedge against property market downturns. It’s also a great way to nurture existing client relationships and provide current clients with other critical financial support.
Here are three things to consider when it comes to building long-term relationships with your mortgage brokerage client base.
- Support the small-business owners amongst your client list.
If you haven’t already branched into SME lending or extended your SME brokerage offering to your mortgage client base, then consider putting it onto your to-do list. More and more small-business owners are seeking lending options outside of traditional bank loans. They need help to navigate these decisions and find credible, reliable business financing options.
It’s not difficult to wrap your head around the information and documentation that is required for your clients to apply for these loans. Affordability and conduct are the two major determining factors in the alternative business lending space. Both can be covered off through analysis of a business’s bank statements, and it can be as simple as that.
Imagine being top of mind whenever your clients consider their next mortgage application and each time they need capital to finance key business decisions. Diversification into SME lending presents brokers with the opportunity to leverage their trust equity and support clients’ business journeys.
- Cultivate relationships with accountants.
Accountants play a major role assisting small businesses to manage finances, handle tax compliance and make financial decisions. If they know about your extended services outside of the property market, they can feel comfortable referring their clients to you when they need to source financing.
Accountants are great at what they do, but a good accountant knows what he or she doesn’t know and advises clients to seek other financial advice when appropriate. They are not always across business lending options. In tandem, their detailed knowledge of a client’s bottom line and a broker’s advice can do wonders for someone navigating financial decisions.
To successfully develop this kind of relationship with accountants, you must demonstrate transparency and credibility. Obviously, their referral lends you further credibility. Of course, you must work with reputable alternative lenders and demonstrate that to your referral network as well. “Nothing hidden, no surprises” is an excellent motto when it comes to nurturing business relationships and, while it may sound simple, this type of service actually does stand out from the crowd.
- Be there with timely advice.
Small-business decision-makers borrow for a multitude of reasons, but many don’t know exactly what to do to source financing, or when to do it. Just like it is possible to identify certain times of the year when more people are in need of mortgage advice, it is possible to identify certain times of the year when business owners are in need of financial advice.
For example, a good time to talk to businesses and accountants is before they submit the year’s taxes. Accessing assistance and advice prior to the lodgement of a tax return can be hugely beneficial to any business that anticipates a need for short-term financing to:
- take advantage of a business opportunity;
- take the next step in their business growth;
- make a key purchase;
- deal with an inventory issue; or
- consolidate business and tax debt.
If a small-business owner applies for any type of loan after they have an ATO debt on the books, securing that loan can be difficult and expensive. The accountants in your network need to be aware of this as well, so they can best advise their clients and help them get in front of potential problems.
The time is still right, right now, for this kind of outreach. In our experience, many accountants delay lodging returns until late in February where an ATO debt is expected, in order to give their clients ample time to prepare.
The broker as strategic partner
Although the term “trusted adviser” has taken a bash since the Hayne commission, we know that the vast majority of mortgage brokers are indeed just that – strategic partners helping to guide clients through the somewhat choppy waters of finance and loans. When you work with a credible alternative loan provider – such as one that understands the financing needs of the small-business sector, is backed by decades of experience, works transparently with its broker network, and considers each SME application on a case-by-case basis rather than letting an automated algorithm make snap decisions – SME lending can be an extension of the skills and relationships you already have. It’s a win-win for you and your clients. After all, we’re all in it for the long run.
Olly Guilleaume is the national manager and business loan specialist for Limba, one of Australia’s most experienced small-business lenders. He works with referral partners and brokers to find solutions to the financial dilemmas facing Australia’s small businesses, and to support their business growth and sustainability objectives.
Olly has more than 20 years’ industry experience, spanning credit control, broker management and business management, including senior executive positions at Suncorp and Bankwest.