Branching Out - Resimac

feature / Short-term finance
“a swift turnaround for the
loan – which means swift
payment for the broker – is a
key benefit of short‑term work”
fast money
A swift turnaround for the loan – which means
swift payment for the broker – is a key benefit of
short‑term work, Mr Evans says. Typically, payment
is received within 24 and 48 hours, depending on the
loan’s nature.
Brokers normally charge the client a professional
service fee – generally between one and 1.5 per
cent of the amount — with the lender paying
the broker their commission at or very shortly
after settlement.
The cost of a short‑term loan to the client, however,
is often a concern to brokers. “Short‑term lending, by
any measure, looks expensive – and it is expensive,”
says Mr Littleford.
“There are still lenders out there charging fees like
four or five per cent per month, although their time on
the planet is coming to an end – ASIC and the other
regulators are trying to make sure these practices are
ironed out.
“There must be a reasonable profit for the lender
to undertake the transaction but that [lender] doesn’t
have to be unconscionable in its approach. For
brokers], it’s just a matter of researching who’s who in
the zoo and saying, this is a reasonable rate.
“The products for what the client requires are out
44 / branching out
there at competitive rates,” he says. “It’s not a deal
they’re going to write every day; it’s a deal they’ll
write from time to time and [the lender will] need to
have someone who can say, ‘That for what [the deal]
is, this is reliable and reasonably priced’.”
the broker opportunity
So, would brokers benefit from adding short‑
term lending to their customer proposition?
Kerri Chambers, general manager, operations at
Rapid Capital believes so.
“The way the banks are up and down at the
moment, I believe it’s a good opportunity for
brokers to look at short‑term lending and it gives
brokers the chance to give their clients a little bit
more,” she says.
“A lot of people don’t know what’s available
anymore, so people prefer to go to a broker as
opposed to sitting on the internet doing the research
themselves. The [average] person doesn’t know who to
turn to these days.
“We do quite a lot of marketing to get these people
to realise you don’t need to lose the deposit on your
property because the bank’s too slow. Brokers are
obviously more educated than the regular client, so
that’s why they are important.”