Smart advisers spice up offerings with SME lending
It wasn’t until a new interstate highway reduced traffic to Colonel Sanders’ modest fried chicken shop and left him nearly broke that he decided to pack up his pressure cooker, his unique blend of 11 herbs and spices, and start selling his recipe to restaurant owners around the country.
Many mortgage advisers today find themselves at a similar crossroads. With the housing market facing headwinds, more are looking beyond residential properties to secure their financial future with lending to small-to-medium enterprises (SMEs) – a $20bn industry that's beckoning advisers to expand their horizons.
Like Colonel Sanders, mortgage advisers are sitting on a goldmine without realising it. According to industry estimates, 40% of mortgage holders who use advisers are also small business owners. These clients, already in the adviser's database, represent a latent asset waiting to be activated.
"These customers are already in your database and are most likely looking for access to capital,” says Camilla Tumai, NZ general manager at leading non-bank SME lender Bizcap. "You're already the trusted source for mortgages, so by partnering with the right lenders, you can be their trusted source for business loans as well."
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