3 HIDDEN BENEFITS OF WORKING WITH SELF-EMPLOYED BORROWERS
Self-employed borrowers are one of the easiest niches to diversify into, and building relationships in this sector comes with a host of added benefits you may not have considered.
Being a broker is not always easy, especially in the post-royal commission landscape. Finding ways to optimise workflows and maximise client relationships is crucial to safeguard your success amid turbulent conditions.
When faced with the increased workload each loan now represents, it may be tempting to focus on finding only the easiest scenarios to work on, rather than spending time getting to know other market segments. While this may increase your output in the short term, for long-term success, diversifying into different niches is crucial to keep new customers coming through the door so you don’t cannibalise your database.
Self-employed borrowers are one of the easiest niches to diversify into, as their needs are often not that different from their PAYG counterparts. What’s more, working with this segment comes with a whole range of benefits you may not have considered before. Read on to see why your business should work with self-employed borrowers.
BENEFIT 1 – STRENGTHEN YOUR BUSINESS THROUGH DIVERSIFICATION
Yes, we admit we’ve been going on about diversification recently – but there’s a good reason for that. Diversification is a key strategy in business to reduce risk and maximise returns. This is particularly important during turbulent market conditions as we’re currently experiencing.
Self-employed customers are a brilliant segment to focus on when diversifying because they come with a host of needs and objectives – some of which are very similar to PAYG borrowers, while others are totally unique. This means you can dip your toe in and build relationships based on the products and services you’re already comfortable with, and then springboard into a near endless pool of further diversification opportunities specifically for this market.
BENEFIT 2 – BUILD LONG-TERM CLIENT RELATIONSHIPS
Studies have shown that attracting a new customer to your business will cost you between 5 and 25 times more than retaining an existing one. If that doesn’t persuade you to focus your attention on return and referral business, maybe the fact that 73% of brokers we recently surveyed identified referrals as their best performing marketing strategy will.
The benefits of building long-term relationships with your customers are extensive, so finding ways to keep them engaged beyond the initial transaction is key. Working with self-employed borrowers can give you a leg up here, as they often need more consistent financial support than just the occasional home loan review.
Before long you could find yourself arranging cash-outs or redraw facilities to purchase equipment, pay out tax debts or just help cash flow along. Or you may refinance a home loan to get a business to the next level. And of course, occasionally you’ll do your regular home loan review.
BENEFIT 3 – ACCESS A CLIENT BASE HUNGRY FOR HELP
Proving income for a home loan has always been more involved for self-employed borrowers than PAYG ones, and since the royal commission prompted lenders to pay ever-growing attention to income verification, hurdles to securing self-employed loans have only increased. That leaves a growing market segment hungry for support from brokers who can show them solutions they may not be aware of.
Further, business owners are usually busy running their businesses, and on average will work 7 hours of overtime every single week. This means they have little time to compare lenders and follow up loan enquiries, another reason brokers should focus on engaging these borrowers to help them achieve their financial goals.
If you’re interested in starting to work with self-employed borrowers but don’t quite know where to start, why not have a look at the kinds of solutions Bluestone could offer these customers. Once you’re familiar with our products, let us take you through everything you should consider when packaging your first alt doc loan.
If you’d prefer some one-on-one support instead, reach out to your BDM, who will be more than happy to show you the ropes.
The information provided in this article is general in nature and should not be taken as constituting professional advice.