Hot Markets for Asset Finance for Next Financial Year
Matt Thompson, Business Development Manager in QLD, shares his insights on the biggest opportunities for growth, what he missed most during the pandemic, and how brokers can leverage the instant asset tax write-off to assist their clients.
It's almost EOFY. What should CAF brokers be focused on doing right now to set themselves up for success?
Get deals in early! Some lenders are regrettably taking 10 days to pick up a deal at the moment, so June 30 is getting closer and closer. But remember, there are still lenders approving deals in 1-2 days and settling quickly too.
How do you approach EOFY; is it an opportunity to reassess or improve any of your own processes?
Home loan applications are booming with our Connective brokers, so they’re sometimes finding it hard to carve out the time to write asset finance deals. We’ve been doing some intensive training with our Home Loan members to help them refer in asset finance deals to our processing team through Quick AF.
What do you think the Federal Government's extension of the instant asset tax write-off will mean for asset finance brokers and how can they help their clients take advantage of this?
June is always the time when clients try to minimise tax, and one way has always been to buy a new car/asset, etc. With the latest extension to the instant asset tax write-off, this is just an added incentive for clients to turn to brokers for help with purchasing assets and equipment for their business. Brokers can do their part by educating their clients about the recent changes to the instant asset tax write-off and motivating them to take action.
One recent issue to be aware of, however, is that because of increasing demand for cars, it’s also harder to purchase them as quickly as some clients might wish. So brokers need to remember to set their clients’ expectations accordingly. We have relationships with car buying services to help our brokers potentially get stock more quickly for their customers.
What are the biggest opportunities/sectors for growth for asset finance right now?
I think it’s the emergence of some very good ‘second tier’ lenders over the last 12-18 months. Our top five lenders are still the ‘usual suspects’, but Flexi Commercial has been going great guns with Connective members. They have an excellent Low Doc policy up to $250,000. They’re turning deals around (approving and settling) in days, not weeks.
Grow Asset Finance and Angle Finance have set themselves up as very capable lenders in terms of pricing and speed to market.
Motor vehicles still comprise more than 50% of our volumes but we still have lenders supporting agriculture, road transport and the hospitality industries.
Consumer lenders are turning deals around in hours with the Auto Approval functionality. They can pay suppliers via RTGS, making the asset handover as seamless as possible.
Caravans and motor homes have been a big focus for us during the pandemic period. As we head into winter, boats and pleasure craft finance has slowed down but it will pick up as the weather warms up in late August/early September.
How are you supporting your brokers as the country enters its pandemic recovery phase?
It’s vital to keep our members up-to-date, especially on changes and improvements in Commercial AF Low Doc policies. The reliance on bank statements and business activity statements (BAS) have reduced with the recovery, but lenders still want comfort that clients have weathered the storm and are getting back to pre-pandemic income and profitability levels. It’s important for brokers to have a wide lender panel to maximise approval rates and customer satisfaction.
What do you enjoy most about being a BDM?
I love all things asset finance. It’s all I’ve ever done since I left uni 30 years ago.
We’ve had some great face-to-face lender functions recently (one at a Kangaroo Point craft brewery) and our members have enjoyed the chance to catch up in person with Connective and our valuable lender partners.
I enjoy hooking up brokers and lenders and then hearing how our broker did their first deal with that new lender. I really missed this aggregator/broker/lender interaction at the peak of COVID-19.
Broker recruitment is a big part of my role and we have been very successful in attracting a lot of talented asset finance brokers to Connective in 2020 and 2021.Grow your asset finance business with Connective Asset Finance. Get started today!