The latest MFAA Industry Intelligence Service Report 1 identifies that despite the fact that the number of mortgage brokers writing commercial loans is increasing, the total number of brokers active in this category at present is still only 31 per cent. Meanwhile, for the April to September 2022 period, commercial loans settled through their aggregator’s panel reached the highest-ever value – at $17.24 billion2. This is a category with a total book value of $70.06 billion as at September 2022.
The competitive imperative
For the first time since IIS research began, the number of brokers in Australia has passed the 19,000 mark, at 19,2361. That’s an increase of 5.2 per cent year on year, a level of competition that is quite unprecedented. The ability to offer breadth of service that includes commercial lending can support brokers to rise above this crowded space to build a more holistic and competitive offer for clients. And in today’s environment, why would you refer on a client you could help?
So why aren’t more brokers working in the commercial space?
It would seem to be a fear of the unknown. “The headline is that many brokers feel that it’s too complex as a category,” says Pepper Money’s national sales manager of commercial Ben McKell. “But the reality is that commercial lending is not one single category – commercial property lending is one part of a wider category, and it’s a great entry point.”
The distinction Mr McKell is making is between property, construction, and development lending. All very different – and each requiring quite different levels of expertise. “The degree of difficulty in commercial property lending is like that between writing a mum-and-dad home loan and a self-employed home loan,” continues Mr McKell. “If you can write a self-employed home loan you can write commercial.”
What Mr McKell does agree, is that education can be the key to ongoing success: “That’s why we have developed workshops for those interested in commercial real estate lending that brokers can access through their Pepper Money Commercial BDM.”
Given how straightforward commercial real estate can be, if you are feeling keen, you can jump right into accreditation today. Mr McKell promises that you will not be jumping into the unknown alone: “With our specialist team of Commercial BDMs on hand you can lean in on our commercial expertise to guide you through the process. With direct access to the credit teams, you’re your BDM support to workshop any deals, we really do make it easy.”
To get accredited:
Visit: pepper.com.au/broker/tools/cre-accreditation
Complete online quiz and Pepper Money will issue your accreditation details*
*To become accredited with Pepper Money Commercial you must answer all the questions with the quiz correctly.
Commercial SMSF
To offer your clients even more options, you can also talk to your Pepper Money BDM about Commercial SMSF – a potentially super smart way to get into commercial property.
