Increase Your Mortgage Broking Revenue by 60%

Commercial Brokers Wanted

Although demand for business finance is on the rise, cloud-banking platform, Mambu, details in their report that nearly 50% of businesses are unable to get sufficient funding. So while the demand for commercial loans is there, access to these loans remain difficult.

Because most business owners seek finance through traditional institutions like banks, the challenge for most of them is in meeting serviceability requirements to qualify for the loan.

Most banks want to be sure a business can meet the monthly obligations, which is why they have a rigid checklist of what businesses need to prove before being granted a loan. Unfortunately, not all businesses can fit this “one-size-fits-all” standard imposed by traditional institutions.

For instance, if the revenue streams of a business are seasonal, say they make the bulk of their annual profits during the holiday season, they could find difficulty securing a loan during their lean months because banks always prefer regular cash flow.

Likewise, banks look at the history of property developers to assess whether or not they are able to complete their projects on time. But what about new property developers without an extensive history? Then securing a bank loan can be problematic.

Mortgage brokers that can provide alternative finance solutions to SME owners and property developers are in a good position to increase their lending opportunities and close more deals.

Just how massive is the commercial lending space for mortgage brokers? According to the 14th Edition MFAA Industry Intelligence Report, the value of commercial lending settled by mortgage brokers from Oct 2016 to March 2022 has increased by more than $8B. In fact, since April 2020, the number of commercial loans settled by mortgage brokers increased by $6.6B.

If you’re a mortgage broker, now is the best time to capitalise on the demand for commercial lending.

Advantages of working with a private lender

Unlike traditional finance institutions, private lenders are able to offer more flexibility. Rather than qualifying borrowers based on serviceability, they do so based on exit strategy. Hence, each loan can be tailored to the specific needs of the business owner.

By working with private lenders, mortgage brokers can equip themselves with a plethora of finance solutions they can propose to their clients should they find difficulty qualifying for a traditional bank loan.

By offering more solutions, mortgage brokers improve their customer service. But importantly, mortgage brokers put themselves in a position to increase their income streams since they are able to attend to a wider variety of clients, within the residential space and the commercial space.

Increase earnings by 60%

At Private Mortgages Australia, we aim to provide a generous referral fee to our referrers within 24 hours upon loan settlement and without any clawbacks. More importantly, our experienced team does all the legwork and due diligence. Hence, even residential mortgage brokers with no prior commercial lending experience will still be able to enter the commercial space immediately.

So how can mortgage brokers increase their earnings via PMA’s referral system? Considering that PMA’s average loan size for SME’s is $1M, a 1% mandate fee and a 1% referral fee equals $20,000 on average for every successful referral. That means, if in 12 months, you are able to successfully refer just three clients in the next 12 months, you would have increased your income by around $60,000 in a year.

If you’re a mortgage broker specialising in residential lending, don’t you think it’s worth it to expand to the commercial space, especially if just having 3 successful referrals could potentially increase your income by $60,000?

For anyone interested in finding out more about diversifying and bringing in additional revenue for your mortgage broking business, then download our free guide to ‘Building a Better Brokerage’. The guide will provide you with everything you need to know about private lending and which of your clients Private Mortgages Australia can help and how we reward our referrers. Or if you’d rather hear about how you can earn $20K just by referring one client, then you book a call to speak with our Head of Relationships, Shanta Lobo.