The commercial finance market has officially bifurcated. We are witnessing the emergence of two distinct ecosystems: the high-speed, algorithm-driven fintech market and the relationship-heavy, complex bank market.
Diversification into commercial lending continues to be a primary growth lever. Recent data indicates a significant shift in broker activity:
Broker Participation in Commercial Lending
The Reality Check
With 37% of brokers now arranging commercial mortgages and another 28% planning to start, the competition is heating up. Understanding where to place a deal is now just as critical as finding the client.
The Speed Gap: Fintechs vs. Banks
Data from Broker Pulse reveals a massive disparity in processing efficiency. This isn't just a few hours difference; we are talking about entirely different time zones of funding.
Fintech lenders like Prospa and Shift have optimized for pure speed, averaging turnaround times of ~1.5 days. They utilize bank statement scraping and algorithmic credit scoring to bypass manual assessment.
In contrast, major banks like Westpac (7.8 days) and NAB (6.5 days) lag significantly. They prioritize comprehensive credit checks and relationship diligence.
Average Days to Unconditional Approval
The Triage Strategy: Where Does Your Deal Go?
This data creates a clear triage strategy for brokers. You cannot simply look at the rate; you must assess the "Urgency vs. Complexity" trade-off.
Click on a client scenario below to see the recommended strategy:
Navigating the 2025 "Credit Squeeze"
While residential lending has stabilized, commercial lenders are tightening criteria in 2025. There is a renewed focus on sustainability over asset values.
Self-Employed Scrutiny
Lenders are scrutinizing the sustainability of business income in a softening economy. Expect forensic analysis of "add-backs" and one-off income spikes.
DTI & Cash Flow
Debt-to-Income (DTI) ratios are back. Lenders want to see consistent cash flow coverage (DSCR) rather than just equity in the property.
The Risk for Residential Brokers
For residential brokers, this complexity presents a genuine risk. Mishandling a commercial deal because you didn't understand the credit policy can damage your primary residential relationship.
Broker Takeaway: The Mentorship Model
Trying to learn complex commercial credit policy "on the fly" with a live deal is a recipe for client dissatisfaction. We advocate for a "Spot and Refer" partnership for brokers new to commercial, or finding a dedicated commercial mentor within your aggregator group.