April 23rd, 2018
Nick Kakalis, MD of Finance Unlimited, talks about Connective Asset Finance and BOLT and how he uses it to increase revenue, develop relationships and retain clients.
Tell us a bit about your background:
I started broking in 2003 and I joined Connective in 2004. Before I became a broker, I was a chartered accountant working at KPMG. From the start, a lot of my clients were in small business, so they needed more than just home loans.
I don’t like the word ‘diversification’. The way I see it, we are lenders and we provide loans to borrowers, that’s what we do. If a client comes in because they want to buy a car, we help them do that. It’s not something new, it’s just a different loan type. I don’t see myself as diversifying – commercial and asset finance is not something else that we do. It’s all the same principles and the same processes (as home loans), just a different product.
Our clients had a need for business borrowing – cars, equipment, commercial property – you name it. When an opportunity came in, we did not go out and say “we need to learn about asset finance first” we just did it, and we’ve just done it from the beginning.
If you think about it that way, asset finance is simple. There’s no need to tell yourself you’re doing something more difficult – you just need to embrace it.
Has asset finance always been a big part of your profit base then?
Asset and commercial finance is around 15 – 20% of our business. I don’t think of it as our main bread winner, but we’re not going to do without it – 20% of revenue is a big thing.
The truth is that you can often earn a better hourly rate from an asset finance deal than you can from a home loan. With a car loan, you make about double what you make on a home loan.
One of the things we do here at Finance Unlimited is track how we spend our time, so we can determine which activities are not profitable. For example, we can identify what type of clients are time wasters, and which product ranges are a waste of time to work with. We can work out if we are being too slow to kill a file if it’s not going anywhere – generally find ways to maximise our time and work more profitably.
So, through this process, we discovered that a lease takes two or three hours. On a car that costs about $50,000 you make $1,500 upfront. For two or three hours work that’s not bad! You’re making between $500 and $750 per hour.
Whereas, a home loan takes at least six or seven hours. For an average $300,000 home loan you might be making $1500 – $1800 upfront – so you’re making about $250 – $300 an hour.
That’s the core principal that we look at.
What are the benefits of the Connective Asset Finance offer and BOLT?
Look, BOLT itself is a great system. It’s easy to use, and the support guys are good. Asset finance isn’t something that we know as well as home loans because we’re only doing it 20% of the time. So, having them there as a safety check is great – you can pick up the phone or email the scenario and they will basically work it out and pick a choice of lenders for you. You don’t have to sit there and think about whether this is going to be an ANZ deal or a Commonwealth Bank deal, like you do with a home loan. You don’t have to worry about knowing the lender’s policy and if your deal will suit them.
So, BOLT is fantastic in that sense. If you don’t know much about asset finance, or you’ve never done it before, or you’re too busy, it’s gold!
Say you’ve never done a car lease before – the BOLT Scenarios Team will help you. (They help me all the time and I’m experienced!) The only thing you need to do is make sure you send through all the documents and information, just like you would with any loan and any lender. They do everything else and keep you in the loop.
What about the Connective Asset Finance lender panel? How does it help you service your customers?
All the lenders we might want to use are on the Connective Asset Finance panel, and they seem to cover every scenario our clients may have. I don’t think there’s anything we can’t do.
I’ve got a direct accreditation with Macquarie and the Commonwealth Bank and I’m happy to use them, but I’d rather use BOLT if there are any time constraints. Around Christmas for example, there was a lot of asset finance business coming through and there was no way I could get it done in the time frame with everything else I had on, so I just sent it off through BOLT and the team got it done for me.
Sure, when you get them to do it you make a little less money, but you’re doing less work too. You still get some money even if you haven’t got time to deal with it, so that’s a great thing.
Can you give us an example of how Connective Asset Finance helped you get a better outcome for a customer?
Oh yes! I had a very tricky lease recently – a client bought a 35-year-old car – a vintage Australian classic. He bought the car just assuming the finance would go through, but it was a vintage car and not a standard thing, so he put himself in a difficult situation. I spoke to Macquarie about finance and they said they just couldn’t do it. So, I asked the guys at BOLT and they really worked hard on it and found a lender who would take it on. There was no way I could have done it without their help – I had no idea who to ask.
We’ve also had a few situations with equipment finance that were a bit tricky. Equipment finance lending is more difficult because every situation is unique. I had a client who was looking at equipment for taxis. The piece of equipment he needed cost $200 each and he needed hundreds of them for all the drivers who used his depot. So, I rang the BOLT Scenarios Team, and to my surprise, they came up with a couple of options fast – second and third tier lenders I wouldn’t have thought of. Problem solved!
What’s the biggest advantage of BOLT in your opinion?
The big advantage with BOLT is that you can do a very quick quote from wherever you are. A customer wanted a quote for a car loan and rang me up after six when I was at home. I didn’t want to get my computer out, so I just logged on to BOLT from my phone and sent him a screen shot of the quote. It was just an informal quote (because I didn’t send all the compliance paperwork with it), but he got a good idea of how much the interest rate and repayments would be. It took me three minutes and the customer got what he needed to compare the quote the car dealer was giving him. It’s the speed that makes all the difference – to you and to the customer.
This kind of thing is invaluable in terms of customer service and building relationships – even when you don’t get the deal. It doesn’t take up a lot of your time to help them out, so you’re not really losing anything, and your client sees you as a valuable resource. When you confirm they’re getting a good deal with someone else, you’re still their go-to guy, their expert. They remember when you’re there for them.
We promote it in our newsletter – that customers should get in touch and let us compare car deals for them. That way, they can get that peace of mind from us. It means a lot.
What would you tell other brokers who are thinking of giving it a go?
If brokers have any trepidations about doing asset finance, they don’t need to worry. I think the great thing about BOLT and Connective Asset Finance is that you have expert support you can always rely on. You might shy away because you don’t want to be the broker who stuffed it up – I get it – but I’m telling you, they’ll give you the help you need to do it properly!
Want to know more about Connective Asset Finance?
Simply talk with your local Broker Support Manager today. Alternatively, call or email your local Connective Asset Finance BDM using the details below.
Steve Light Connective Asset Finance BDM for VIC/SA/WA Phone: 0499 399 433 or email firstname.lastname@example.org
Phillip Meehan Connective Asset Finance BDM for NSW/QLD Phone: 0488 788 839 or email email@example.com.