Brokers handling increasingly complex scenarios across both traditional and alternative lending avenues
Commercial broking is, in many ways, still in its infancy.
While broker share in the residential mortgages space has seen breakneck growth – having climbed from – to nearly 80% today, brokers’ commercial market share still sits at roughly 35% to 40%, depending on who you ask.
But as the broking industry matures, many experts expect this number to shoot up in the coming years.
Michael Volkiene (pictured, left), general Manager, loan origination and credit, of private credit group Msquared Capital, expects brokers to claim 55%-60% of the commercial lending space over the next three years.
He sees this as a result of brokers diversifying and responding to the increasingly sophisticated needs and expectations of their clients.
Private credit, he argues, is on a similar trajectory.
“In the US, close to 50% is written in private. In Europe it’s around 40%. In Australia, you probably sit between 9% and 12% at the moment,” notes Volkiene. He sees the “natural” level here moving to around 22%-25% over the same period.
Volkiene believes abundant dry powder, banks retreating from complex scenarios, and the rise of specialist non‑bank players are all helping private credit gain ground.
“Brokers are seeing some challenges with the traditional lenders,” he says, pointing to bottlenecks around SLAs, shifting appetite and confidence.
Msquared operates predominantly in the three‑ to 36‑month space, funding non‑regulated commercial deals such as bridging, residual stock and cash‑out facilities.
But while the likes of Msquared tout the benefits of the unregulated commercial lending space, sentiment is clearly bullish among the traditional players too.
Speaking on NAB’s latest commercial broker economic update, executive of commercial broker Chris Thomas (pictured, right) highlighted “significant levels of system growth for business lending, much higher than in previous years”, noting that businesses are clearly prepared to borrow despite higher interest rates.
During the update, NAB chief economist Sally Auld said internal data shows much of the uplift is concentrated in property and agriculture, with a particularly strong appetite for the purchase of commercial buildings rather than just land or residential stock.
That pattern, she argued, signals businesses are making longer‑term bets on income‑producing assets and regional growth rather than simply chasing short‑term gains.
Auld also pointed to NAB’s business survey, which shows most firms that want credit still report it is “pretty easy” to obtain, suggesting banks remain keen to lend and current rate levels are not yet biting hard enough to choke off investment demand (although this was said prior to the March RBA rate hike).
NAB gained market share in both small-to-medium enterprise and total business lending in 2025, per its latest set of results.
Big Four competitor Westpac has also enjoyed growth in business lending. Following a concerted effort by management to target the commercial space, interim results published last September showed a 14% year-on-year growth in the segment.
Brokers urged to diversify
Brokers can no longer afford to be “resi‑only” players, says Volkiene, who sees diversification into commercial as both inevitable and accelerating.
He says brokers want to provide “cradle to grave” solutions for clients, supporting them as they move between residential, business and investment needs.
“Commercial lending is relationship driven and technically complex,” says Volkiene. “Experience matters – from understanding diverse income streams and non‑standard documentation, to taking a commercial approach to valuations.”
Volkiene reckons commercial expertise gives brokers a way to deepen their client relationships and grow their businesses. Others in the broking industry thoroughly agree.
In ongoing roadshows across Australia and New Zealand, Simon Bednar, chief executive of mortgage aggregator Finsure, has been stressing the importance of diversification, especially in response to the Middle East crisis that is causing havoc on fuel prices and consumer confidence.
“We are all facing challenging times with interest rate increases and market fluctuations outside of our control. It’s important for brokers to be prepared to diversify their service offering and revenue streams in response to these events,” Bednar told brokers.
He continued: “This will enable brokers to offset the negative impact of rate rises and better protect their businesses from unpredictable outside forces. Our industry is increasingly moving towards a more professional approach which helps develop more loyal clients during difficult times.”
Finsure saw a 43% surge in commercial and asset finance lending in its latest financial year. “We are seeing more and more brokers moving into diversified lending – particularly commercial – as they look to expand their revenue in this competitive environment,” said Bednar.
Mortgage aggregators crack into commercial
Finsure is not the only mortgage broking group to see similar trends.
Connective recently powered up its commercial lending offering by adding ORDE Financial, Pallas Capital and Msquared Capital to its lender panel.
Brent Starrenburg, head of commercial and asset finance at Connective, is seeing brokers navigate increasingly complex commercial lending scenarios.
Additions like Msquared to Connective's lender panel to flesh out the options available to brokers handling these complex scenarios. “Msquared Capital brings strong commercial experience and a practical credit approach, particularly for more complex property transactions,” says Starrenburg. “That gives our brokers confidence they can deliver when traditional options fall short."
LMG, Australia's largest mortgage aggregator, has also made an aggressive push into commercial broking.
“The average person is going to have financial needs beyond just a mortgage… What we’re seeing is good brokers want to say to their customer, ‘I’m your destination for all your financial needs, whether that’s a car loan or if you want to buy a factory,’” LMG group executive of commercial finance Stephen Scahill told MPA at last year's LMG Growth Summit.
“It’s about convenience for customers, but for brokers it’s also about securing your own network,” said Scahill.
