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Commercial EdgeWeek One
2
2020
Agenda
2
01 What’s the opportunity?
02 Breaking down the steps to winning in commercial
2020
3
Who are we?
Richele Janjatovic Dawood OdehCommercial BDM
VIC & TASCommercial BDMNSW, ACT & QLD
We are an additional resource to our members business. Irrespective of where you are on your commercial journey, we’re here to help.
Our goal is to find the best solution for you and your customer.
4
2020
Our Commercial Team Structure
Collectively > 150 years of commercial lending experienceMinimum of 10 Years
What’s the opportunity?
6
2020
Business Customer Lifecycle
HomeLoans
~ $392b
AFGBusiness~ $389b
Commercial Property Investment(Stand-alone)Buy a
business
Business Premises(Owner occupied)
Vehicles/Equipment
More Equipment / Vehicles
Working capital / Invoice FinanceSMSF – Commercial
or Resi property
Investment Property
Family Home
Holiday Home
Same Client –Extra Income
7
2020
Increase your return – Paid referral 30%
Residential Home Loan $450,0000.60% Upfront $2,700
0.165% trail over 3 years $2,228
Commercial Property Loan $500,0000.50% Upfront $2,500
0.165% Trail over 3 years $2,475
Asset Finance $150,000 – 3 cars3% Brokerage $4,500
Total income $14,403
Referral fee = $810Net income (HL only) = $1,890Net income (HL + Commercial + AF) = $13,593
What did it cost you?Home Loan only$810 / $4,928 = 16%
Home Loan + Commercial + Asset Finance$810 / $14,403 = 5%
Increase your return by over 300%
Market share for the majors is reducing in the commercial space.
Lender Share of Big 4
Breaking down the steps to winning in commercial
10
2020
What support do you need?
Knowledge Do you need a better understanding of commercial – if so, what specifically?
Process Do you need more support on how to submit and structure the deal?
Skill Do you need help having conversations with self employed clients?
Mindset Do you want to?
(K + P + S) x M = Opportunity
AFGB Program• Commercial BDM’s + PM Support
• Commercial Scenario and Support Desk
• Learning and Development Program
• Commercial Edge Training Program
• Specialist Lender Product Program
The largest panel of business lenders of any Australian aggregator.
Specialist support for deal workshopping, applications and lodgement.
Simplified accreditations and paperwork.
Quickly find and secure a range of products for clients in one simple application.
Industry-first, back-channel messaging system.
Integrated live chat with business lending specialists.
AFG Commercial Powered by Thinktank product range.
Full learning and training pathways and courses.
Diversify your income and offer a complete financial solutionAFG Business is the only platform of its kind in Australia. You’ll be equipped with the tools and strategy to help you diversify into business lending.
12
2020
Six steps in commercial
Step 1Spot Opportunity
Step 2Book a meeting
Step 3Discover their goals and needs
Step 4Workshop the deal
Step 5Present options
Step 6Lodge & settle a deal
Step 1 Spot the opportunity
1. Market online – LinkedIn, FB and Instagram
2. Existing Financials
3. Align yourself to an accountant
4. Align yourself to a business broker
5. Align yourself to a commercial agent
14
2020
Purpose of funds is key
Purpose of funds
Determines the product
Determines the security required
Determines the loan term
Determines the rate
15
2020
Purpose of funds is keyWorking capital –anything to do with cash flow
Term Loans –anything to fund a larger asset i.e. a property or a business
Asset Finance –anything to fund an asset that has a serial number
Guarantees –guaranteeing performance of a job or securing a rental deposit
Overdraft Business loan Chattel Mortgages Performance guarantee
Line of credit Lease doc loan Novated lease Rental guarantee
Debtor Finance Commercial Bills Hire purchase
Commercial credit card
Short term loans
Trade finance
The first thing to always ask is – what do you need the money for?
This will direct the conversation to what products you have available in the market. They will always fall into four categories as per above – then you’ll have sub-categories available.
For example, you wouldn’t provide business loan to a customer, who needs a car for their business.
Refer to handout – Financials
Step 2 Book the meeting
• Use the double bind technique
“Hi Joe,
The purpose of my call is because I was thinking about your business and would love to float an idea past you.
Would next Wednesday after 1pm or Thursday after 10am suit you?”
Step 3 Discover their goalsand needs• Utilise your aggregator fact find or
create your own
• Your goal is to walk away understanding:
1. Purpose of funds
2. What they do
3. What is important to them
2020
19
Step 4 Workshop
Purpose of funds:Seeking a commercial property for o/o purposes. Clients will cease renting and the new site will provide an additional 600 sqm storage and office space.
Address: 123 ABC St, Port Melbourne
Purchase price: $1,200,000
Loan amount sought: $960,000
LVR Sought: 80%
Stamp duty and GST: Client will self fund
Additional landed security: Nil
Sponsor: Sponsor has been in commercial and residential plumbing for 11 years and operating his business for 6 years
Website: Insert website of the business
Doc type: Full financials available
Other: Paid default on personal credit file $256.98
Important to the client:
Lowest deposit and need for low doc as financials are not available
Step 5 Present options
2020
21
AFGB PlatformAsset Finance
Commercial
Contact usNext week
01 Commercial property lending
02 Servicing calculations
Richele Janjatovic Dawood OdehCommercial BDM
VIC & TASCommercial BDM
NSW, ACT & [email protected] [email protected]
Thank you for attending
Please note AFG does not provide tax, legal or accounting advice. Any information contained in this document is of a general nature only and does not take into account the objectives, financial situation or need of any particular person and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Therefore, before making any decision, your clients should consider the appropriateness of the information with regard to those matters and consult their own tax, legal and accounting advisors before engaging in or considering the appropriateness of any
transaction.Australian Finance Group (Commercial) Pty Ltd ABN 52 081 643 512 Australian Credit Licence 392750