When businesses are starting out or hitting a point of expansion, there are often a variety of financial challenges that can present themselves to entrepreneurs. Is it a wise time to invest in new assets that may expand the company’s reach? Or would it be better to hoard cash for a potential rainy day further down the line?
Asset finance can help bridge the gap in such situations. Brokers who are working with clients who are in the process of estab-lishing or expanding their own businesses may consider offering such products as a solution. Asset finance, explains John Mohnacheff, national sales manager at Liberty Finance, is primarily sought by customers who are looking to source a new vehicle to grow their business or boost their productivity, without sacrificing their cash flow.
“Even if they can aff ord the expense upfront, financing a new vehicle allows customers to tailor their repayment terms to better suit their budget over the long term, while maintaining cash reserves,” says Mohnacheff . “And, if they are using the vehicle in question for business purposes, it might be tax deductible.”
Mohnacheff says it’s important for brokers to ensure that customers are aware of the myriad ways they can support them in reaching their financial goals – on both business and personal levels. Brokers shouldn’t be intimidated by the prospect of expanding into new areas; rather, it’s an opportunity for them to broaden both their range of services and the potential customers that they can reach.
“Some brokers avoid moving into other areas of lending because of perceived complexity, but when it comes down to it, there is very little that changes,” says Mohnacheff.
Essentially, working with business owners is the same as working with any other customer; the fundamentals of quality service remain the same. Customers seeking asset finance expect good communication and fast turnaround times, and they still want to access the financial solutions that suit their needs, Mohnacheff explains.
“Succeeding in asset financing requires the same skills as it does to succeed in any other area of lending – and there is so much opportunity for brokers who see the benefit of expanding their customer offering,” says Mohnacheff.
But how does this play out in practical terms? What sorts of discussions do brokers need to be having with their clients in order to guarantee that they’re maximising their opportunities? Mohnacheff suggests it’s best to start with the basics and work from there.
“The first step is to have an open and honest conversation with customers about their current situation and their future business goals and work out the kind of finance they might be looking for,” he says. “Depending on their needs, a simple motor loan could benefit them more than they realise, and provide the perfect solution to their personal or business needs.”
Mohnacheff also sees such conversations as crucial to looking at a client’s wider finances in a holistic fashion. People often come from complex or non-traditional financial backgrounds, but this doesn’t mean they should not have the chance to attempt entrepreneurial projects. Brokers should be able to leverage their skill sets to aid people who find themselves in such situations, rather than simply rejecting them out of hand.
“One of the things that sets us apart from others is our unique approach to lending, and our ability to look at the customer’s circumstances more broadly,” says Mohnacheff. “While some lenders may automatically decline borrowers with a history of bad credit, we look at the big picture and assess applications on a case-by-case basis.”
Indeed, Mohnacheff sees asset finance as part of a broader trend towards diversification in the broking industry. While there’s still room for sole specialists in broking, many brokers are looking for alternative income solutions, in no small part due to the cyclic nature of property. For commercial brokers, it’s also a logical extension of working in the business space.
“For brokers who help customers obtain a mortgage, it’s always worth enquiring about the customer’s additional lending needs, as you never know what you might uncover from a simple question,” says Mohnacheff.
“From car loans to debt consolidation and perhaps even commercial, business or SMSF loans, there could be countless opportunities for mortgage brokers to find new leads within their existing databases. Liberty has always championed diversification, and our BDMs can provide brokers with the personalised training they need.”