The Broker's Visual Guide to Diversifying into Commercial Lending
Relying only on residential loans is a risk. A growing number of brokers are building more resilient businesses by expanding into commercial finance. This isn't just a trend; it's a strategic move to future-proof your income.
The Goal:
Build a Lower-Risk, All-Weather Business
Source: MFAA Data
The biggest mistake is assuming resi knowledge translates. It doesn't. You must shift your focus from the borrower's salary to the asset's income potential. This section breaks down the core differences.
In a less-regulated space with higher risks, a mentor is your personal risk management department. They provide the practical wisdom that bridges the gap between theory and real-world deal-making.
Your best commercial leads are your existing self-employed clients. They already trust you. Servicing their business needs protects your relationships and uncovers new revenue without marketing spend.
The smartest first step isn't writing a complex deal yourself. It's partnering with a specialist. You mitigate risk, earn a commission, and get a front-row seat to learn from a pro—a true win-win-win.
Analysis is on personal income, credit score, and ability to pay from a salary.
Governed by the NCCP Act, offering high consumer protection and clear rules.
Loan-to-Value Ratios can reach 95% with LMI, requiring a smaller deposit.
Analysis is on the property's cash flow, lease strength, and business viability.
Terms are more negotiable, but broker and client risk is significantly higher.
Generally capped at 65-75%, requiring more significant equity or cash contribution.
Partnering with a specialist is the safest and most profitable way to enter the market. It creates a powerful win-win-win scenario for everyone involved.
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Mitigate risk, avoid PI issues, and earn a referral commission.
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Receives expert advice and the best outcome from a specialist.
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Get a front-row seat to learn from a pro, building your own competence.