And by a commercial lending service, I am really talking facilitating finance to those two million or so SMEs out there who employ approximately 50 per cent of the private workforce and about the same percentage of GDP – in other words, a growing sector and all-in-all, a group not to be ignored.
SMEs will always require servicing and lines of funding. They are, after all, in business and require capital for all those pesky expenses like wages, tax payments, equipment and stock – money keeps their business moving. They are also more commercial in their approach and are less likely to engage in lengthy discussions over 10 basis points or a $500 valuation fee. However, they are also more likely to have inadequate tax returns, out-of-date business activity statements and the odd point of disagreement with Veda over an unpaid bill or two.
So what does this mean? A significant opportunity to write more business, if you take the time to find out a little bit more about your clients. Let them know that you have resources on hand to assist with cash-flow requirements, but manage their expectations appropriately.
We all know that managing expectations is everything – it’s everything because it leads to trust and positive relationships – and positive relationships give a high return on investment for repeat business and referrals. To start this process on the right foot, the message is to qualify. Conversations without intent can be pleasant, but they don’t pay the bills. We get paid for loans that settle – that’s our scorecard.
Consider these tips for qualifying prospects and managing expectations from the outset:
1. Ask the necessary questions to qualify the prospect. Drill down deep and do not be fearful of seeking clarification on an issue if it doesn’t make sense. If you are perplexed by a response, there is probably good reason for it (and your lender will most likely ask the same question). Take the time to understand the borrower’s circumstance and whether their expectations are realistic.
2. Be honest, transparent and tap into your resources to recommend the best solution (not just what’s easiest to suggest). The by-product of this approach is client loyalty and repeat business – it’s worth the effort to understand the options available.
3. Under promise and over deliver. It’s a cliché, but it’s absolutely relevant for a solid relationship. Similarly, anticipate your client’s needs before they know they need it.
4. Communicate consistently and concisely. You’ll be seen as the expert and a trusted adviser.