But it’s the latter - asset finance - that really has mortgage brokers asking; why have I not taken asset finance seriously until now? Considering asset finance is typically processed within 1-3 days, it’s easy to understand why.
Would it be surprising to hear that on average, mortgage brokers can earn more from an asset finance deal in comparison to a home loan deal? If we consider hours worked vs average commissions, then it’s true!
Working off average commissions, loan sizes and hours worked [per deal], asset finance deals yield a return of $395/hour, while its home loan counterpart yields a return of $186/hour.
Of course, asset finance deals don't include trail commissions but as a complementary revenue stream, it's certainly a welcome addition to any broker's business.
Quite simply, the asset finance industry is soaring. With restrictions on international travel - a $60 billion a year industry (pre-COVID) - state-based lockdowns and SME government incentives, asset finance has been the true beneficiary.
Nodifi has seen a 307% increase in asset finance loan originations over the last 12 months (from its mortgage broker and dealer channels), with commercial asset finance accounting for 73% of that increase.
Motor vehicles and caravans have seen unparalleled growth, but commercial assets including yellow goods, heavy vehicles and agricultural machinery have proved just as popular. Given these assets typically start at around the $100,000 mark - and quickly push well north of this - the market is awfully enticing for prospective mortgage brokers.
But something to keep in mind, asset finance isn’t an overnight sensation - it’s been a steady commodity for years, with a small pocket of the broker community capitalising, year on year. The last 12 months have simply been the cherry on top!
Each mortgage broker would attest to differing reasons as to why they have avoided asset finance or at the very least, spent minimal time seeking asset finance opportunities from their clients.
Not enough time, a lack of understanding of asset finance, compliance considerations, the idea that asset finance delivers smaller commissions to home loans, are all common sentiments voiced from the broker community - but, they needn’t be.
Yes, asset finance does come with its intricacies and yes, most mortgage brokers lead busy lives attending to home loans. But, there is help at hand.
Nodifi is one of Australia’s leading technology and services providers for asset finance, enabling mortgage brokers to offer a broader range of financial services. A Nodifi accreditation provides brokers with access to over 40 leading asset and personal loan lenders, catering for consumer and commercial borrowers.
Brokers also control how they submit each deal, whether that be through a traditional full application or via a tick and flick referral. This is all backed by Nodifi’s dedicated support teams and BDMs.
Think of Nodifi as an extension of a mortgage broker’s business, the asset finance department if you will. Brokers can call Nodifi to workshop any asset finance deals, and receive guidance on suitable lenders and supporting documentation.
The takeaway - asset finance doesn’t have to be scary when an award-winning support team is in your corner.
The Benefits / Next Steps
For mortgage brokers, there are many benefits to proactively offering asset finance. Strengthened broker-client relationships, additional income, and a broader service offering are just a few standout benefits.
But ultimately, it’s almost become a necessity for the modern day mortgage broker. With more and more brokers jumping on asset finance, those who don’t could be at risk of losing clients to brokers who do - this includes future home loans...
So join the 1,500+ Nodifi community and capitalise on the lucrative asset finance market.