Diversifying in asset finance enables a broker to provide a more holistic service to their clients says Connective head of asset finance Brent Starrenburg.
Those considering the move shouldn’t hesitate to speak to their aggregator and others in the industry before launching their new offering to clients.
MPA spoke with Starrenburg off the back of the aggregator’s partnership launch with Premium Car Search for some tips on where to get started.
Instant tax write off presents further opportunities
While anytime is a good time to diversify into asset finance, this month presents extra opportunities with the current instant tax write off sitting at up to $150,000, says Starrenburg.
“There’s always a lot of people looking to capitalise on that end of financial year piece if they’re small businesses, where they’re trying to get as much of that equipment in before the end of the tax year so they can make those claims,” he says.
“What we’re seeing is clients are obviously asking the question, the brokers are responding to those questions and being able to assist them.”
How Connective can help
For brokers who want to diversify but are unsure where to begin, he says talking to others in the industry who already deal in asset finance is the best way to get started. Engaging the help of their aggregator is also key, depending on the level of expertise they have in this field.
“We take this side of the business very seriously. We’ve got dedicated people who understand asset finance and can talk about how to integrate asset finance into the business,” Starrenburg says.
He points to BOLT, Connective’s system that allows brokers to filter through which lenders will deal in finance for a particular asset.
“Where one lender won’t bite, somebody will,” he adds.
“This system will allow the broker to put in some information, it will allow them to itemise the lenders that will actually at least consider that asset and then they can go through from there.”
“The other thing too is understanding how you can actually assist your clients further.
“We’ve recently partnered up with a company called Premium Car Search which are based in NSW and they have a national footprint.
“It means that the customer, especially in COVID, doesn’t actually have to go into a dealer. As long as they know what car they want they can remain in iso without having to meet people – but still buy a car.”
Top tips for getting started
Starrenburg says the industry body for commercial finance, CAFBA, offer a Cert 4 that is tailored to the asset finance industry. They are also rolling out a specific asset finance educational program that can help brokers really get into the nitty gritty of it.
An effective marketing strategy can be the difference between attracting repeat business and having your existing clientele lose interest in you, he says.
“Whatever CRM you are using, segregate it out,” he says.
“Understand who your small business operators are, understand who your consumers, your mums and dads are – start working at that level.
“Then when it comes to this time of year, the end of financial year, market to your database. Make sure that your clients know that you can offer those services – especially with the instant tax write off.”
Paying more attention to a client’s assets and liabilities when they come to you for a home loan can help you identify other ways you can help them, he adds.
“If they’ve got a car loan payment, talk to them about that payment at that time. You may find that that particular client may be coming up for renewal, they may be looking to change their car, in which case you can talk to them about their finance for that new vehicle.
“If it’s a business owner they may have assets like a small digger or a truck. There’s more than just looking at the individual transaction at hand.”
The benefits of having a diverse offering
Starrenburg says there are real benefits to offering more than one type of finance to a client.
“If you talk to any bank, they’ll tell you that they try and educate their staff to get as many different products into a single client – and I think their magic number is about four,” he says.
“The reason why they do that is because that client is less likely to go to another bank.”
Brokers who can offer more than one finance solution can improve customer retention while generating new business from their existing database.
“The more stuff a broker can do, the more they become that trusted expert from a finance perspective that that client’s always going to come back to and refer friends and family to.”
He says while a lot of people fear delving into the unknown, there is support available for those starting out in asset finance.
“If you are delving into the asset finance space and you’re really unsure, there are alternatives where you can potentially lean on your aggregator.”
He adds there are also services that can handle and look after the client on your behalf.
“Don’t be afraid to let go of the loans, don’t be afraid to ask more questions – I think that’s probably the biggest thing.”