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Often we hear finance brokers say “Sorry, we just don’t write specialist loans, we’re not in that space”. But have you considered the opportunities of using a specialist lender?
We can tell you that it doesn't matter where you position yourself – you are likely to come across a scenario where a specialist lender can be a great alternative to the major banks, and it’s not always credit-related.
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Here are five reasons why you should consider a specialist lender for your business:
1. Specialist lenders are a great alternative for finance brokers and their clients when the major banks and LMIs are unwilling to assist
This is the most commonly understood benefit specialist lenders offer – keeping brokers and their clients in the game. Assisting those who are under-served by the major banks has been at the core of La Trobe Financial’s service proposition since its inception more than 60 years ago, and the current economic conditions are a great case in point.
We are assisting more and more finance brokers with investor clients looking to borrow both in their own right and via their SMSF, now that the major banks have tightened their criteria, and in some cases withdrawn from this market completely. There are many nervous investors out there who have committed to opportunities and are now uncertain if they can complete the finance requirement. Recently, we have put many investors’ minds at rest.
2. Specialist lending solutions are not just limited to residential property
La Trobe Financial is unique in the specialist lending space as we are able to provide specialist lending solutions across a broad product range, including residential, commercial, SMSF and development finance.
These products are available on a full-doc or Lite-DocTM basis, and can cater for credit impairment where it has occurred as a result of an unforeseen life event.
Having specialist options across multiple asset classes allows brokers to structure better solutions for their clients, not just residential.
3. Diversification doesn't have to be difficult
Specialist lenders can make diversification easy.
Other lenders may require finance brokers to sit a test or hold off on lodging applications until they can be formally accredited (when convenient for the lender in question). However, at La Trobe Financial, accredited brokers are able to write all of our products without delay.
We use the same forms and documents and follow the same approval process, ensuring that brokers who are not so familiar with a particular product can easily adapt, hence why there is no need for any additional accreditation procedures. If a broker requires our assistance, our credit team can be contacted directly to guide them through, or we will arrange for their client manager to visit them personally, but this is rare due to the ease of the overall process.
4. The need for speed
Speed of delivery and certainty can often be the most crucial part of a transaction, particularly for purchase contracts where not meeting the completion date may mean the client is hit with expensive penalties or misses out on a lucrative opportunity altogether.
The major banks’ pipelines can resemble a black hole at times, with visibility non-existent, limited or no communication, and turnaround times that can often be measured in weeks, not hours.
By dealing with a specialist lender that puts you in direct contact with the decision maker, not only do you know the status of the file but you are also able to openly communicate with the credit analyst to ensure the client’s important deadlines are met.
5. Additional earning capacity
This would be the truest test of how a specialist lender can add value to a broker’s business by offering earning capacity when the bank says 'no'. Simply by turning a 'no' with a major bank into a 'yes', specialist lenders are adding value to a broker’s bottom line, not to mention locking in the client and preventing them from going elsewhere. It is as much about protecting your client base, as it is growing it by offering a solution.
With commissions available from day one, with no clawback across our entire product range, there is a significant opportunity to increase your earning capacity.
Every finance broker should have a specialist lender in their arsenal to assist them with a solution for their clients when they need it most. Be there for your client in all conditions demonstrating the superior benefit of using a finance broker – multiple solutions.
Cory Bannister is the vice-president and head of distribution at La Trobe Financial Services.
