In decades past, it was common practice for small businesses to have a close relationship with their local bank manager, especially in the suburbs and regions.
Relationships matured over the years as managers – equipped with the capability to assess and offer credit – cultivated an intimate understanding of their small business clients and all their banking needs.
Over time, these relationship dynamics have changed, generally in line with the size of the credit facility being taken by the borrower and to the point now where a relationship with a full service banker is rare if not impossible to access.
Not so with the non-banks.
It is my firm belief customers get the same standard of service from the non-banks irrespective of the loan size. For Thinktank, that means actually investing in close relationships with the mortgage brokers we work with to assist them in servicing their clients’ financial needs.
Brokers are now cultivating those deep relationships with their clients in the same way as bank managers of yesteryear.
Today, it is these brokers who are part of the local community. They are the trusted advisor, meeting face-to-face with clients to understand their needs and find the best lending solution for their circumstances.
Unlike a manager of a financial institution, brokers are not limited to one product – the credit world is their oyster to secure the best outcome for clients.
What does this mean in practice?
Brokers conduct a financial health check with clients to determine a holistic financial picture.
It is not just about the current situation: their debt loads, and whether loan consolidation is an option, or repayments, and how they can be accelerated to reduce the amount of interest being paid. It is also about having a broad knowledge of the economic environment; what is potentially around the corner and how it might have an impact on the clients’ business or personal circumstances.
By taking the time to fully understand their client’s financial position brokers forge a genuine relationship with clients, this is especially important in the current climate where interest rates are rising, and the Reserve Bank is taking steps to slow the economy.
It means that they know what is coming for the client, perhaps even before they do. If it’s a cash flow issue, for example, it could be arranging a temporary overdraft or consolidating liabilities.
Sometimes it is just a kind word of encouragement, knowing at that point of time, there is no practical assistance to give when the client is already on a good path. But even at these times relationships can be nurtured that will allow brokers to assist in the future, when the client’s circumstances or the economic environment change. It is through tough times that brokers can do well because they have taken the time to build deeper relationships.
In this broker-client relationship, Thinktank has a critical support role to play. To begin with, we only deal with the brokers, which is to say we have no first-party channels where we deal directly with the client. There is never any channel conflict – a significant point of difference with other mainstream lenders that have first-and-third party distribution channels.
All the brokers we deal with are either authorised representatives via an aggregator or they have their own credit licence. Every loan that is introduced to Thinktank is workshopped to assess how we might be able to assist. If it’s not something that fits, is outside our credit appetite, or not an asset that we would ordinarily take as security, then we look to suggest an alternative.
There are always going to be occasions where we simply can’t assist whether it is due to past credit history, not the right asset class (all Thinktank loans are secured against property), or an out of scope location.
It could be one of many reasons.
But we always have the conversation first with the broker to quickly establish how and where we can add value one way or another.
For nearly 20 years, Thinktank’s quality relationships with the many brokers we have worked with has been the cornerstone of our business – with almost $10 billion in loans now advanced it is testimony to how non-banks have stepped up to support brokers and their clients with a traditional relationship approach.
This article was submitted by Peter Vala, from Thinktank. Click here to learn more about Thinktank.
