Know your clients’ business

Assisting clients to access credit to sustainably grow their businesses has brought this Victoria-based broker success.

Coming to broking with a background in commercial and corporate banking, Scott Seng from MoneyQuest Balwyn works with business clients ranging from start-ups and small-medium enterprises through to corporate clients.

“I worked in banks for quite a long time and always on the business banking side, so when we started the business (MoneyQuest Balwyn) my intention was always to focus on commercial lending,” said Scott.

“To round out my lending knowledge, I wrote my first home loan in 2017. I leant on the experience of my business partner and other brokers to upskill and learn how to write residential mortgages. We now do some home loans for our business clients as a value add,” he said.

When talking about commercial broking, Scott highlighted that it’s about more than financing commercial property, for example he works with clients to secure financing to purchase inventory, materials or equipment that will allow their businesses to grow. And, most of the transactions he facilitates are not property-backed.

Scott says he enjoys helping his clients and going on the journey with them, recalling his favourite client stories as those where he’s been able to help them turn things around and grow.

In contrast to many residential mortgage clients a broker may have, a commercial client can often have revolving credit needs meaning they are in contact with their broker multiple times through a year.

As Scott explains, it’s about getting the client the funding they need to grow sustainably – not too much and not too little.

“For example, if a business needs $5 million to grow, but only has $2 million in funding, the business could implode or struggle to expand. And, the opposite is true too – if a client needs $5 million, but gets $12 million, that can be detrimental to the business, for example if they invest in too much stock,” explains Scott.

“This approach can help our clients’ businesses expand, and then we can assist them with increasing their credit facilities in line with what their needs are.”

To be able to see how much funding a business can sustainably borrow, Scott says it’s critical to know each client’s business in detail – beyond the financial statements. An important part of this is meeting the client onsite.

“Clients are more comfortable talking about their business on their turf. They can show you around and you can learn about their business.

“When you take a deal to a lender, there’s a lot of questions around why they should take it. The more we know, the more we understand the business, the better it is for us as brokers to be able to answer those questions without having to go back to our client and be able to position the deal with the lender,” said Scott.

Scott also noted that bankers or credit assessors at lenders can often move roles or institutions, so by knowing his clients’ businesses well, he is in a position to explain it to new staff at lenders, saving his clients from having to do this.

Asking for advice from other brokers, BDMs or bankers is a resource Scott says he taps into and he encourages other brokers not to be afraid to ask questions.

“I regularly speak to other brokers and say I’ve got this type of transaction which I know you do, where have you seen appetite from lenders who might do this, or seek advice on how to position it to the lender,” said Scott.