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ISCOVER
Equity-Ones continues its formula of “keeping it simple”
- An outline of your commercial lending products and their features. What is your point of difference with competitors?
From issuing term sheets, to approval, settlements and after-settlement service, every touchpoint needs to be as good as possible. Surprisingly, one of the most important ones is how easy and quickly can you get rid of us. Yes, the impression you leave with broker when the client says goodbye is, interestingly, a lasting one, too. That is why repeat customers are such a delight to have, because you figure that the experience is worth revisiting.
This is the experience we want the brokers to have as well, so working very closely with our brokers is key to these outcomes.
- What opportunities does commercial lending provide for brokers and their clients in a rising interest rate environment?
Interest rate cycles: who needs ‘em, right? Well, like life, they happen. The important thing is for us to ensure communication is as good as possible, to ensure brokers know what to expect, to then in turn help their client. Whilst controlling these cycles is out of most of our control, knowing where we stand in the cycle is as good as it gets. For borrowers, knowing that their broker (and then the lender) is available to talk through different options is critical. Some borrowers may experience higher levels of financial strain. For the rest, there is a heightened level of anxiety around their borrowings, and transactions they have completed or are about to embark on. Complex environments are best dealt with, as always, with simple conversations. A common source of borrower anxiety in these times is simply knowing where they stand, in terms on their foreseeable commitments, and the outcomes of their plans. Brokers who spend time to enable these conversations, and simply listening, can enable real positive impact for their clients. This, in turn, separates a good broker from the rest as he/she add real value to the relationship. Ironically it is often not only about money that clients want to talk about. It may be the reason for the call, but the conversation is deeper than that.
- How do you support brokers in this area? Please outline education, support systems, etc
We support brokers by simply being available to them, for whatever conversation they need to have. Whilst we have developed digital tools to speed up the transactional process we still see brokers’ needs to be the same as they were in the 90s; that is, being available to provide answers quickly. Be it a “yes”, “no”, or “how come”, we just need to be available to our brokers to help them execute their duties and fulfil their clients’ expectations.
- What strategies can broker new to commercial lending use to build their business?
One strategy is to lean on us. Whilst we deal with very experienced brokers who are well versed in the area of commercial lending, there are equally many who are either new to the broking, or simply do not do many commercial loans as part of their business. We see those brokers needing to ask more questions, and we help them walk through all the stages of the transaction so they can engage confidently with their client or referral source. We, in a sense, train our brokers by virtue of being available for them, case by case, loan by loan. The reality is that they will tell us what they need, as opposed to us telling them what to do.
- Where do you think the best opportunities lie in the commercial loan space now? Six months from now? What issues are brokers raising now v six months ago?
The funny thing about economic cycles is that the engagement with people really doesn’t change. It might ramp up, or calm down, but fundamentally the dynamic is the same. Brokers are always incredibly important to their clients, no matter how bright or gloomy the skies appear. I’m fascinated with the way brokers promote themselves on social media. It’s fun to watch, actually, because most of the posts do not really delve into the heavy financial topics. They tend to have two messages: “here I am” and “talk to me”. The rest of the brokers’ job takes care of itself. As always, communication is the gold that makes brokers (and their respective lenders) stand out.
- Are there any strategies you recommend for businesses in a rising interest rate environment?
As clients seek more answers from their broker in challenging times, it is important for brokers to keep connected to the lenders they deal with, and really understand (as much as they can) what the outlook of the lenders is in the foreseeable future. This information will directly impact their clients and enable them to be connected to them in these times. Whilst brokers aren’t meant to have crystal balls, even the slightest insight into what lenders’ expectations are in the short-term future will be very helpful to their client who calls upon them for their insight.
Stay close to your lender. Stay close to your client.
- What external risk factors impact your thinking/business? ie geopolitics, climate events, pandemic fallout, etc
Our approach to lending has stayed relatively static over the past 30 years. We stick to our niche of providing SME commercial borrowers with an alternative when their banks are not “dancing the dance”. This really hasn’t changed. We have avoided construction, and leave that to the various other players in that field. That’s fine by us. That’s a risk that we do not want to be exposed to, but we have continued to be relevant to our borrowers in their purchases, refinance and cash out of residual stock. We are competitive in these areas compared to the other non-banks that specialise in construction.
Dean Koutsoumidis is the founder and managing director of Equity-One. He specialised in financial planning in the early 90s and then focussed on non-bank lending before the introduction of the Managed Investments Acts and the financial services regimes that followed. Mr Koutsoumidis established Equity-One and continues serving the non-bank SME sector. Equity-One’s recent engagement with Westlawn Finance and Consolidated Operations Group (COG) sets the groundwork for continued growth and value-adding opportunities for its SME clients.
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