Uncertainty over the future of commissions makes it critical for brokers to diversify into SME lending to protect and grow revenue streams says SME lender OnDeck Australia.
• A quarter of SMEs (25%) plan to seek additional finance for their business in the next 12 months.
• One in four of a broker’s existing home loan clients are likely to be SME owners.
• OnDeck is running Equipment Finance information sessions for brokers in Melbourne and Sydney in April hosted by Mr Noah Breslow, Chief Executive Officer of Ondeck Group
SYDNEY, April 10, 2019
Amid the fallout from the Banking Royal Commission, SME lender OnDeck Australia is urging mortgage brokers to think beyond home loans and diversify into SME lending.
Research by OnDeck Australia[1] confirms that 25 per cent of Australia’s small to medium enterprises plan to seek additional business finance.
Mr Michael Burke, Head of Sales at OnDeck Australia, says, “There is clearly strong demand for SME finance, making this a revenue channel that brokers cannot afford to overlook. Moreover, our discussions with brokers indicate that, on average, one in three of a broker’s existing home loan clients are SME owners, providing a ready base for brokers to market their services in the SME lending space.”
OnDeck’s study found that among those SMEs planning additional finance in the next 12 months, almost half (49%) would consider a specialist financer1. “A lot of SMEs are realising that finance with an alternative lender avoids jumping through the hoops imposed by traditional financers,” says Mr Burke.
Brokers don’t need experience in the SME channel
Moving into SME lending may take brokers outside their comfort zone. However, it is not necessary to have extensive experience in SME lending practices to successfully grow a revenue stream.
Rapid remuneration
SME lending also gives brokers the benefit of rapid turnaround times in commission. Without the formal settlement period that applies to residential mortgages, SME loans tend to settle in a few days rather than weeks.
“We usually pay broker commission within 14 days of settlement. By comparison, it can take 90 days for a broker to receive commission on a residential mortgage transaction. It makes SME lending very good for cashflow,” adds Mr Burke.
About OnDeck
First launched in Australia in 2015, OnDeck Australia is part of the US-based OnDeck Group. Over the last decade, OnDeck Group has loaned over US$10 billion to 80,000 small businesses. Loan terms are tailored to each individual customer’s needs and circumstances.
Media Contact:
Anthony O’Brien
Corpwrite Australia
+61 (0) 411 578 818
anthony@corpwrite.com.au
[1] OnDeck SME Study of 331 SMEs conducted by YouGov Galaxy April 2018
