He’s the self-described ‘youngest old man’ of the finance industry. And after speaking with Surinder Agnihotri of Trail Book Loans and Australian Business Credit and learning about his diverse experience and passionate entrepreneurism, it is easy to see why.
With a quarter century in the industry, Surinder Agnihotri has used his time productively, turning an ability to understand what finance professionals need to help them grow their business, into multiple businesses of his own.
Now, this seasoned veteran is looking towards the future with plans of giving more back to the industry, which he predicts has a very bright future. Surinder Agnihotri is this edition’s Prospa Groundbreaker.
MFAA: Surinder, can you tell us about your current roles and businesses?
Surinder Agnihotri (SA): Effectively, every business that I am involved in is about building a broker’s business and adding value to their business. One of the things I found astounding for years is the fact that it’s a mortgage broker’s job to source money for people, but if they require money themselves they actually couldn’t get it short of putting property security on the line. So, the first thing that we did was to come up with a trail book loan product that allowed brokers to borrow money themselves. After that, we started monitoring to make sure that books were not churning off, which led to us developing a program that automatically tracks and audits trail payments each month. And we’ve started to roll that out to brokers as a value-add, so they can see what’s happening within their business and treat their book as an actual business, rather than a loan writer with a trail income stream. As we move forward, our passion’s more about educating the industry, helping brokers to become business people, not just loan writers.
MFAA: Surinder, can you tell me about your journey and how you came to this idea of providing finance specifically for brokers?
SA: Having been in aggregation for the predominant part of my career, it is surprising how much you keep learning as you build aggregation businesses. It probably started in my head as an idea back in 2009, so in the hey day just before the GFC everything was great, then the GFC hit. I was running a finance brokerage under a franchise, and had some tax debts that I needed to clean up courtesy of the GFC, but I couldn’t find anywhere to raise the capital despite the fact I had a $400 million active loan book at the time. That is where the idea started, and it just kept building over the journey and basically, it is what I am meant to do. I am great with brokers, I have recruited, trained and mentored over 1,000 brokers in my career, and I’m really good at policy and credit. So that was just a natural blend.
MFAA: So, this product solved a problem for brokers who were seeking finance themselves?
SA: Yes. The way that books are sold is so opaque it is quite scary, but we will lend a broker a maximum of 1.5 times their annual trail income, for any business purpose over a five-year P&I term. And we keep it really simple. Then when we expanded, we introduced two new products, which were financing for financial planners, and financing for real estate agents, being two products that brokers refer to us, and by referring finance for their referral partners it actually further embeds their relationships.
MFAA: So, what have brokers really been crying out for in terms of finance?
SA: A lot of what we do focuses on business expansion, consolidation, office fit outs etc. We view a trail book as a genuine asset. I find it amazing that you can walk into a car dealership, get a $70,000 car loan with no deposit, and as soon as you drive away, the car’s worth $45,000, and everyone’s happy to lend money because they’ve got an asset attached to it.
MFAA: How has business been during the recent challenges?
SA: Our current clients seem to be going ok, which shows the industry is robust and solid. Interestingly, probably 80% of the enquiries we are getting are large brokers looking to make large acquisitions. It seems some of the more elderly large brokers are looking to exit because of COVID, so there is going to be that interesting consolidation within that. But as a business COVID gave us the down time to custom-build our systems, which was a job that we had planned to do in December and January but were too busy.
MFAA: As we continue to go through a period of significant change, what do you think the future looks like for brokers?
SA: I honestly believe we move to a 70%-plus market share. Lending is not going to get any easier, it’s murky at best trying to figure out what the best policy for a loan is out there, and I think Best Interests Duty just crystallises and formalises what 95% of brokers do anyway.
Also, COVID has shown just what brokers do for their clients - assisting clients in hardship, refinancing in difficult circumstances. A lot of brokers just picked up the phone and spoke to their clients and reassured them. So for that to happen and then straight into Best Interests Duty and RG209 review, I think it’s great for the industry.
MFAA: What are your plans for the future?
SA: As one of the youngest old men in the industry now, I’m 44 and I’ve been doing this for 25 years, I think the next part of my journey after I’ve built Australian Business Credit, Trail Book Loans, Trail Finder and Trail Market, and all of the work I’m doing to try to add value for brokers, is going to be my time to give back to the industry. I want to get more involved in a mentoring role specifically for financial services, small businesses, start to do more work with the industry bodies and really ramp up our corporate responsibility program.
MFAA: Thanks for your time.