Skip to content

Bigger is not necessarily better…

skyscraper

Drives for economies of scale by mortgage broking groups may not deliver as many benefits to brokers as these groups claim.

Boutique independent broking groups may in fact be better suited to serve brokers and further assist with keeping the market on an even keel due to in part our strong collaborative approach and robust service propositions.

Being bigger isn’t necessarily being better.

There’s only so much efficiency you can get from economies of scale through size and this does not necessarily translate to a better service proposition. I’d like to think the boutique independent broking groups provide a better service proposition as we’re more attuned with what brokers require for their business, with this translating to attracting a high calibre of broker.

These big businesses aren’t team-spirited co-operatives anymore because of size and due to many of them being either bank or institution owned.

As boutique independent broking groups, we do not deal with thousands of brokers and as such along with strong collaboration we pay greater attention to broker needs with a core value proposition being ‘quality rather than quantity’.

We do things a little differently – we believe we are more hands on and intimate with regards to understanding our business partners’ needs. Our value proposition as a boutique is not just on the aggregation; it’s always been centred around the full service – collaboration, value adding and helping brokers build better businesses and create additional revenue. As we know, a more intimate broking group-broker relationship can provide a broker with the right tools and a greater structured hands-on guidance to grow. Whether it is tailored offerings for single writers, small brokering groups through large brokering groups, boutiques cater better.

Small and Medium Enterprises (SME) Guarantee Scheme

The Scheme will enhance lenders’ willingness and ability to provide credit and will be available for new loans made by participating lenders until 30 September 2020.

The Government will provide eligible lenders with a guarantee of 50% per cent of new loans. Some generic terms are:

  • Businesses with a turnover of up to $50 million.

  • Maximum total size of loans of $250,000 per borrower.

  • Loans will be up to three years, with an initial six month repayment holiday.

  • Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Reduced Interest Rates

Consider your current banking arrangements. The Reserve Bank has recently reduce the cash rate and lenders have passed this on to various loans they have.

Instant Asset Write Off

An increase in the instant asset write-off threshold from $30,000 to $150,000 30 June 2020.

Deferment of Loan Repayments for up to 6 Months

The banks are developing their own approach as to how to deal with requests from their clients for repayment holidays. Some are automatically granting the request, others are assessing the requests individually.