Brokers have a great opportunity to serve self-employed borrowers who are particularly keen for relief from rising rates and inflation, according to Chris Paterson, general manager distribution at non-bank lender Resimac.
Paterson (pictured above) said self-employed borrowers were often charged higher rates than PAYG workers which meant they were more willing to explore financial options.
“Many self-employed borrowers need the expertise of brokers to find solutions,” Paterson said. “These borrowers may have not had complete financials, but the good news is they may still satisfy our flexible credit policy.”
A tough environment for self-employed borrowers
Self-employed individuals make up about 16% of Australia’s employed population, according to ABS data, with over 1.3 million working as owner-managers without employees.
With interest rates increasing and expected to rise further and cost-of-living pressures creeping up, Paterson said many self-employed borrowers could not afford to make a financial blunder.
Resimac has focused on self-employed borrowers since rising rates prompted intense competition for prime borrowers.
CreditorWatch data reveals a year-on-year increase of 87% in credit inquiries from businesses in November, with a 61% rise from the previous month.
Resimac said it was helping its 14,000 accredited brokers pursue self-employed borrowers with a flexible and competitive product range, which includes prime, alt doc and specialist residential mortgage products.
“We take a commercial approach to credit assessment, and our home loans offer features that are tailored to the needs to self-employed borrowers, including debt consolidation and unlimited cashout regardless of loan size,” Paterson said.
One of the ways Resimac caters to self-employed borrowers is by offering a range of income verification methods. An accountant’s verification, six months of business activity statements or three months of business bank statements are accepted.
Paterson said brokers could enjoy plenty of benefits from serving these borrowers.
“Firstly, brokers will be saying ‘yes’ to more opportunities and diversifying their customer base,” he said. “Diversifying a customer base can better protect a brokerage from market cycles like the one we are experiencing.”
Patterson also said the self-employed tended to be more grateful for brokers’ assistance and were a great source of referrals.