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Yellow Brick Road has revealed plans to leverage its aggregation business Vow Financial to begin offering SME finance solutions across its network.
Following a decision in August last year to consolidate the business and move to a franchise model, YBR appointed former Aussie Home Loans state manager Andrew Rasby to build its franchise network and drive growth in the branded business.
While mortgages and wealth have always been the group’s core business, moving into the SME space opens up a lucrative new channel for Yellow Brick Road.
The company’s aggregation business, Vow Financial, has been actively growing its share of the broker-originated SME and commercial lending markets under the leadership of Glenn Mitchell, Vow’s head of commercial and leasing.
Mr Mitchell spent five years at PLAN Australia, setting up the aggregator’s commercial lending operations before joining Vow in 2014.
“Once we access the YBR network we will unearth a major opportunity,” Mr Mitchell told The Adviser.
“Now that Andrew is concentrating on growing the YBR network there is a massive opportunity to look at replicating what we have done over the last two years at Vow. That could spike very quickly,” he said.
YBR’s Andrew Rasby said the group will start integrating an SME finance broking component for the more experienced franchisees that are dealing with business operators.
“They are not tapping that market at the moment. It is a case of upskilling our brokers. The opportunities will be walking in the door, it’s just a case of capturing them,” he said.
Mr Rasby explained that the opportunity to work under the leadership of industry pioneer Mark Bouris was a major factor in his decision to join the ASX-listed group. He also saw synergies between his previous experience in wealth and mortgages and YBR’s business model.
“We are currently in the process of recruiting more franchisees. The sweet spot for us is the broker with one to two years’ experience looking to get wings under a franchise model.
“Those that have the ability to take the customer off the market and take care of all their financial needs. At the moment, I’m trying to build out the recruitment piece. It is still a fairly young network. Education is a big part of it.
“We’re looking to grow the franchising network in key sights around Australia. We have worked out where the 300 sights are where we could have branches and started recruiting.”
Meanwhile, Vow’s Glenn Mitchell says existing brokers are continuing to diversify into asset and equipment finance, with some more experienced loan writers taking on larger business finance and commercial deals.
He noted that broking is still a major attraction industry for those looking to leave the banks.
“You will see a number of new people that have moved out of the corporate world and joined Vow as brokers,” Mr Mitchell said.
“They have left big Macquarie pay checks to set up their own broking businesses.”
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