The most recent MFAA Industry Intelligence Service (IIS) report, released in April 2020, shows that the number of mortgage brokers underwriting commercial loans as well as residential mortgages increased to a new high of 3,670 in September 2019.
The increase suggests that “in a difficult home loan market, more and more brokers are turning to diversification in this sector, expanding their portfolio beyond residential home loans into other growth sectors,” according to the report. report.
This promising growth in commercial space looked set to continue well into 2020 – until the COVID-19 pandemic hits, that is.
“Our credit decision engine analyzes over 450 unique data points in about 15 seconds … and a response and funding is possible within 24 hours.”
The commercial loan market has been one of the hardest hit by the pandemic. However, Beau Bertoli, co-founder and chief revenue officer of Prospa, says the biggest trend currently driving SMEs and business lending is digitization.
“Microsoft Research reports that there have been two years of digital acceleration in a matter of months. Government support has raised awareness among non-bank lenders like Prospa and accelerated the adoption of digital products and services, ”he said. “Small business clients, brokers and lenders all operate in this new environment, and speed, simplicity and great service are now more important than ever. “
Indeed, brokers have embraced the rapid transition to adopting more flexible ways of working, including virtual verification of identity processes that have the potential to speed up property financing.
Of course, for Prospa, fast turnaround times have long been a part of its core offering.
Beau Bertoli, Co-Founder and Chief Revenue Officer, Prospa
“Our online applications take 10 minutes and our credit decision engine analyzes over 450 unique data points in about 15 seconds. We are committed to lending responsibly, and a response and funding is possible within 24 hours, ”says Bertoli.
“We just had a client from a tile company in Victoria who used a loan to cover the initial costs of a large remodeling project. He had to act quickly to get the order from overseas and say yes to the opportunity. This speed is a huge relief for customers who want to get back to business.
“Bertoli adds that as a fintech, Prospa is well placed to face the evolving challenges of the current market. The depth and breadth of its ability to provide financing can provide solutions across a range of types of financing, from small businesses that need financing to help with cash flow, equipment and vehicle financing, to company machine or car loans and commercial overdrafts. Prospa can meet the needs of the borrower in a variety of ways, with products and interest rates tailored to the specific risk of the client.
“We are agile and can adapt quickly. We are using smart technology to assess risk, so that we can continue to provide a rapid response in today’s environment, ”said Bertoli.
“Small businesses are going through uncertain times right now, and rapid demand and decision allow them to focus on getting back to business. We are also a cloud-based company and our team can provide the same level of customer and partner support by working remotely.
While current conditions may be difficult, there are also plenty of reasons to be optimistic about the future. The value of commercial loans settled by brokers peaked at around $ 9 billion in April-September 2019, according to the IIS report, the total book value of commercial loans granted by mortgage brokers hit a record $ 43.1 billion.
“The future will be different and the brokers who will win in this new market will be those who will be agile and will know how to adapt”
Programs like the government coronavirus SME guarantee program, in which Prospa is participating, are expected to put a foundation in the form of commercial loans while the program is in effect – until September of this year. In addition, they will go a long way in raising awareness of small businesses and considering non-bank lenders in the future.
“There is a lot of energy and enthusiasm from the brokerage community around including non-bank lenders like Prospa in the program. It’s great to have this support, and we work closely with partners to distribute funds quickly and responsibly to small businesses. We have started to roll out our new business return loan and line of credit products under this program, and these will soon be widely available to partners, ”said Bertoli.
Prospa offers loans of up to $ 250,000 under the SME Guarantee and $ 300,000 more broadly, and sees a strong appetite for financing from a range of businesses.
“Recently, there has been a strong appetite from companies that were able to end hibernation earlier than expected and are thinking positively and proactively about their recovery,” he explains.
“There are also companies in certain industries that are experiencing increased demand for products and services and need funds to support their growth. On top of that, we are seeing demand for otherwise viable businesses with temporary cash flow issues due to COVID-19 that need funding to get through this time. “
One of the main advantages that Prospa currently offers to SMEs is its speed of service, he adds. In an age of brokers grappling with lenders who take several extra weeks to process even the simplest business loan applications, Prospa remains able to make decisions within 24 hours – with funds available just as quickly.
“We know that small business owners don’t have time to fill out a lot of paperwork or wait six weeks for a response. We offer simple online application and use smart technology to make quick credit decision which small businesses need right now. They must be able to take their next step, ”says Bertoli.
“Looking ahead, one of the biggest opportunities we see is the digital acceleration that has taken place. The future benefits for productivity, efficiency and communication are enormous.
“Everyone is operating in a digital world right now, and this is an opportunity for brokers to re-evaluate the way they run their business and deliver their services. I encourage brokers to consider investing in cloud-based solutions that can help them scale and deliver a seamless customer experience. The future will be different and the brokers who will win in this new market will be those who will be agile and will know how to adapt.