This Week’s Dilemma…

I\'m getting more and more enquiries of a commercial or semi-commercial nature but this is not my speciality. I don\'t want to turn this business away because it would be additional income and a good way to diversify. But learning how to handle commercial mortgages will take valuable time away from my mainstream business which needs my full attention, and I can\'t afford to recruit an experienced commercial adviser without being sure of getting enough commercial business. How can I square this circle??

We know brokers often feel that handling commercial mortgage enquiries will be ‘too difficult’ so they need a simple route to commercial lending.

Residential brokers are skilled in processing loan applications but until recently commercial mortgage lending was not structured in a way that intermediaries could feel confident with. We have therefore structured simple and transparent risk-based products that brokers can understand and explain to their clients.

We have also developed a suite of documentation and guides that can help brokers to handle commercial mortgage applications with skill and confidence.

But the process of packaging a commercial loan is a little more involved than the residential mortgage process. For example, valuations can involve factors linked to the nature of leases and goodwill elements.

Residential mortgage firms that don’t want to get involved in these areas can still say yes to commercial enquiries and deal with them by referring them to a specialist in return for an introduction fee.

This kind of arrangement works well, often with the commercial specialist paying over the entire proc element of their fee to the introducer.

Some market entrants go on to develop their own skills and deal with the commercial side of their broking business, while others will find that a partnering arrangement with a commercial specialist is all they need.