Thinktank Commercial's head of sales and distribution on why challenges facing commercial brokers are only a good thing
2017 has proved to be a year of both opportunity and challenge for brokers in the area of commercial finance. With lending volumes reaching new highs for many brokers and lenders, it has been a year where strong and persistent client demand has been extremely well serviced by the third party channel.
Various challenges however have been evident, particularly as macro and prudential factors have played out with curbs on certain types of lending and products impacting both residential and commercial finance. The contraction in appetite for construction funding from the major lenders has been well documented, and shows no sign of changing any time soon, yet the same change and uncertainty has been affecting mainstream commercial lending as banks have amended policy, withdrawn products and played with pricing.
Whatever the reasons that lie behind these decisions, it increases the value brokers can deliver by ensuring the have access to a complementary yet diverse panel of lenders which they can turn to as needs and circumstances arise. This is where having established relationships with a combination of banks and non-banks can prove essential as commonly, the drivers around policy, product and price tend to be different. So when banks are applying the brakes in some areas, the non-banks are frequently unaffected and it is business as usual.
Of course, the reverse can also hold true but either way, this is where it is vital to maintain quality relationships with lender representatives you can rely on and trust to keep you informed about what is happening in the market and why. Keeping in regular contact with a lender who can support a range of conversations and provide direction on all things commercial may just turn out to be the difference between converting or losing the next deal.
As sights turn to 2018 the economy and lending conditions with it are expected to remain generally positive and yet the government and regulators continue to fixate on industry oversight and intervention. Lending appetite will continue to be influenced by these factors and we anticipate that the funding environment will continue to demonstrate reactive decisions being made with, at times, little warning. We believe having the benefit of up to date industry information, insight and the means to readily access alternate finance options is likely to be a common ingredient of success in the year ahead.
Peter Vala is head of sales and distribution at Thinktank Commercial Property Finance. He has a strong working relationship with brokers and aggregators and extensive experience across residential, commercial and development finance.