Why brokers are turning to BOQ
BOQ Head of Third Party, Karen Carter, addresses the increasing popularity of non-banks and non-major lenders amongst brokers.
BOQ Head of Third Party, Karen Carter
Despite the challenges of recovering from the COVID-19 pandemic, natural disasters and the flow-on effects of Russia’s invasion of Ukraine on the world economy; the good news is that many small business owners in Australia are looking to invest in their future. However, for the broker community it’s important to take the time to really understand why and how the needs of SME customers are shifting.
At BOQ we’re seeing positive signs of recovery with almost 75 per cent of our SME customers having higher cash deposit balances than pre-pandemic levels.
Although most SMEs are in good financial shape, there are discrepancies between sectors and across state borders, largely due to the impact of COVID-19 lockdowns. The sectors hardest hit by government regulations and cautionary spending by consumers – notably hospitality, recreation, some transport sectors and smaller retailers, particularly in CBD locations – are still doing it tough and have tight budgets as a consequence.
Unfortunately, just as these sectors were starting to bounce back, the recent large-scale flooding in parts of New South Wales and Queensland have added to an already challenging trading environment for many SMEs.
With the property sector performing strongly on account of low interest rates and primary producers doing well due to favourable market conditions, we’re seeing that these sectors are likely to have higher leverage than the SME average.
Small business owners are generally struggling with three main issues – state government regulation, staff retention and access to materials. And of course, for businesses in those sectors doing it tough, there is the added mental stress of recouping loses after months of lockdown closures and an uncertain outlook in terms of customer demand.
With these challenges, many businesses have been forced to look for ways to adapt – and technology has become an enabler of innovation and opportunity for many SMEs who are recognising the benefits of digitisation. For example, the fast-tracked digitisation of previously manual processes has made internal processes more efficient and the necessity to create platforms that enable access to interactive documents for employees working from home has seen an uplift in productivity. As a service provider it is imperative brokers keep instep with these businesses and not be left behind. BOQ Commercial Broker itself launched an online portal in November 2021, complete with guidelines on niche industries, pricing tool and checklists, so our accredited brokers could self-service, and better understand and deliver solutions to SME clients sooner.
While businesses continue to adapt, access to finance has never been more crucial and BOQ has responded with SME policy changes that create more breadth and flexibility in lending. To help improve cash flow with less cash needed up front, for Commercial loans of up to $3 million we can offer eligible clients*;
Visit the Commercial Broker web page to find out more about how Karen and her team can support your broker business.
Source: BOQ internal data. Only businesses with business deposit accounts since pre-pandemic included.
*For Small and Medium Enterprise (SME) with a Total Business Related Exposure (TBRE) of less than $3m and Total Aggregate Exposure (TAE) of less than $10m. SME, security type and loan purpose eligibility criteria applies (‘SME eligibility criteria’). A maximum Loan-to-Value ratio (LVR) of 85% and the 10 year interest only option applies to owner occupied commercial security, otherwise the maximum LVR is 80% and the maximum interest only period is 5 years. Where the SME eligibility criteria is not met the maximum Loan-to-Value ratio is 70% (non-residential and mixed security) or 80% (residential security), and the maximum loan term is 15 years (non-residential and mixed security) or 25 years (residential security). Applies to the Business Term Loan product only. Not available on Self-Managed Super Fund (SMSF) loans.
This blog post is for general information purposes only and is not intended as financial, taxation or professional advice. It has not been prepared with reference to the financial circumstances of any particular person or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article.
Credit provided by Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian Credit Licence no. 244616 (BOQ). Conditions, criteria and fees apply. BOQ's standard credit assessment criteria apply. This website contains general advice, which has been prepared without taking account of your objectives, financial situation or needs. You should consider the appropriateness of any advice before acting on it. You should obtain and read the relevant T&Cs and Guide to Fees and Charges that apply to this product before making any decision about whether to acquire or continue to hold it, available at your local BOQ branch or at boq.com.au.
Acceptance of any application for credit is always at BOQ's lending discretion.
Information current as at 01 January 2024.
For more information about Federal, State and Territory Government financial support measures available to Australian businesses, download our comprehensive summary here. You can also stay up-to-date with new announcements via the Australian Government's support for business page found here, or for State and Territory-specific information, click here.