My broking business has settled approximately $10 billion worth of commercial finance in the past few years. From multi-million-dollar developments in Sydney to billion-dollar projects in Southeast Asia, every one of those transactions was referred to us by an Australian mortgage broker.
For more than 30 years my broking business has run on referrals. During that time, I’ve seen the number of specialist commercial finance brokers shrink significantly. Meanwhile, banks and aggregation groups have encouraged residential brokers to diversify. But few people at banks or aggregators would know how to structure a complex commercial transaction, let alone teach brokers how to do it. What they should instead be doing is promoting partnerships and greater collaboration among brokers.
It takes patience and time to become a skilled technician. Most young entrants to the world of finance broking these days are focused on volumes and recognition. Becoming a specialist requires diligence and experience. There are no quick wins.
Ask any successful medical specialist how long it took them to build up their practice on referrals and you will have an idea of the type of dedication required to become a leader in your field.
Transactional broking may work for some, but it has never been my model. Our customers value relationships, experience, and expertise. These are the same things I look for in my referral partners.
I’ve never had more referral partners than I can count on one hand, for the simple reason that so few mortgage brokers have the ability to appreciate the value they can offer to a commercial finance specialist like us. Brokers also notoriously undervalue their own skills, particularly when it comes to home loans, which requires its own unique set of skills.
I believe home loan brokers are specialists just as commercial brokers are. Each can add far more value to a client by working as a team than by attempting to be something they’re not.
The handful of brokers I have a close relationship with have been able to double or triple their revenue simply by sending us their commercial clients. And that doesn’t include the home loan business we send their way.
We’ve never accepted a referral that we haven’t been able to place. Our partners understand exactly what type of clients we work with and some of them make the bulk of their income by finding them for us.
When you’re arranging finance for major development and infrastructure projects across the Asia Pacific, it’s important that those who promote your business understand the nature of your work. For some of our broker partners, this has required a shift in mindset; from thinking in millions of dollars to thinking in billions of dollars.
Understanding what a high net worth client is looking to achieve, beyond their home loan needs, is where astute mortgage brokers can really shine in the commercial lending space.
Having a referral relationship with a commercial finance brokerage like Acuity Funding is a smart way for brokers to ensure their clients are getting all their needs met by a team of experienced professionals who respect each other’s specialties.