Have you made the move from banker to finance broker?
Get excited – you've stepped into a world of great flexibility and fast approvals as you work with non-bank lenders.
Unlike traditional banks, non-bank lenders operate with a variety of risk appetites, security requirements, and approval processes. These aspects give you more opportunities to help clients secure the right funding, when and how they need it.
Here are three key things for ex-bankers to know when working with the alternative finance market
1. Things move quickly - be ready to go
The wheels can turn slowly at big banks.
Becoming a finance broker is like moving into the fast lane of finance, where non-bank lenders are ready with fast funding solutions.
Online loan applications, the ability to link bank statements, digital execution of loan documents, and flexibility with security collateral mean alternative finance providers can provide funding fast. As a broker, you need to be ready to go, too.
Significantly, brokers can usually pick up the phone and speak directly with the decision makers in credit teams. It’s the type of access that means you can get a fast solution for your client.
Here, the ability of finance brokers to form great relationships comes into its own. It’s an ability even more important when you’ve stepped out from the bank network and are building your own business.
Finance in the fast lane:
Get funding for your clients faster than with traditional lenders
Work with alternative lenders using speedy digital processes
Get direct access to the decision-makers in credit teams
2. More than property – break free of standard securities
A new advantage when working with non-bank lenders is being able to move away from property security being a default requirement.
While banks often insist on real estate as security, non-bank lenders generally take a more risk-based approach. This means unsecured loans are in play. So too, alternative security structures, such as General Security Agreements (GSAs).
This means clients don't necessarily need to put down their homes or commercial properties to access funding. Instead, they can leverage their business’s cashflow, receivables, or other assets – giving them greater flexibility and less risk to their personal wealth.
As a finance broker, this gives you greater flexibility to make a deal.
Why this matters for your SME clients:
They can obtain funding quickly without risking their family home
They have more security options to suit their business needs
They can access finance without having property assets
3. Know your GSAs for fast and flexible loans
We mentioned General Security Agreements above.
A key part of non-bank lending, these agreements provide a security over business assets. They provide a level of protection to the lender, and a structure that allows them to offer higher loan amounts than fully unsecured loans.
GSAs open up opportunities for businesses to access finance by demonstrating their commercial performance, rather than strictly relying on a real estate asset. For finance brokers, they’re an essential document to understand as they open up fast, flexible and alternative borrowing opportunities for your clients.
Key benefits of GSAs:
Borrowers can secure funding without tying up their home or personal assets
Lenders have protection without needing mortgage-backed security
A more business-friendly approach that aligns risk with commercial performance
As an ex-banker, you already understand credit risk, loan structuring and compliance.
As a finance broker, you now have the flexibility to help SMEs access working capital without the constraints of traditional bank processes and policies.
You can:
Offer faster, more flexible finance to clients who need quick access to funds
Help businesses grow without forcing them to risk their personal assets
Build a diverse funding toolkit that allows you to serve more clients, more effectively
* Disclaimer: Fees, lending criteria, terms and conditions apply (including an origination fee on each advance). Actual fixed fee (or interest expense) and repayments will vary based on your individual circumstances. Advertised rates are subject to change at any time. Fixed fee (or interest expense) accrues upfront and is paid in instalments. While Banjo does not generally take security over assets, director guarantees may be required and a general security deed or other security may be required for larger loans or in respect of some loan types. Statements regarding timing in relation to applications, approvals and funding are only indicative. Any advice given does not take into account your personal circumstances and you should carefully consider what products are appropriate for you and obtain professional advice where relevant.
