Mortgage broker Loan Market Vantage on why brokers are pivoting to business lenidng

“But commercial is a lot more complex than mortgages. Every assessment is completely different from a computer store to say a butcher, and the appetite of the bank might change based on the month,” he said.

He said many clients simply needed the services of a commercial broker.

“There are a lot of people who are self-employed, there are plenty of people with self-managed super funds, and they would benefit from getting a loan on a commercial basis.”

Mr Walker’s business is based in Adelaide, and there are about 380 mortgage brokers in South Australia writing commercial loans and mortgages. There were $660 million of commercial loans settled in SA between October 2022 and March 2023, though it is the smallest in this regard.

NSW has nearly 1900 dual business and home loan brokers that settled $5.8 billion in commercial lending in the same period. Victoria had 1781 brokers and $4.5 billion of commercial loans settled, the MFAA shows.

Mr Walker, a 15-year veteran of the mortgage broking industry, first brought in a commercial lending specialist to Loan Market Vantage in Adelaide midway through last year after becoming frustrated with having to refer potential customers to a third party.

“I had no control,” he says. “I wasn’t comfortable with that because I did not know what was happening at a customer service level and when a deal was declined, I did not have full transparency over why the deal was declined.”

He hoped that mortgage brokers could help disrupt the traditionally slow and clunky commercial lending process, but cautioned anyone in the industry thinking of jumping in on a whim.

The big banks are starting to increase their focus on business lending after the so-called mortgage wars demolished returns in their retail segments. National Australia Bank is still the nation’s largest business lender, although Commonwealth Bank is confident it will soon be able to overtake NAB.

Meanwhile, Westpac last year separated its business and retail banks for the first time since 2021 and installed Anthony Miller to lead the segment. Mr Miller told The Australian Financial Review his goal was to grow “safely and sustainably”.

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