For the diversified broker, it pays to know the ins and outs of asset and equipment finance
Asset and equipment (A&E) finance is becoming a crucial piece of the diversified broker pie as customers demand a progressively broader offering from their trusted advisers. In fact, over 70% of asset finance sales in Australia are currently estimated to originate through brokers; not quite at the 76% levels seen in the mortgage finance space, but certainly close.
It’s a number that Mathew Clowes (pictured, left), head of wholesale at non-bank lender Resimac, believes will only continue to rise in the future.
Brokers “are increasingly benefiting from the rising demand for specialised advice and the broader range of financing products available”, Clowes says in a discussion with MPA. “More brokers are recognising the value in broadening their portfolios and offering solutions that span multiple sectors.”
In Clowes’ view, putting effort into expanding their knowledge and becoming specialists in specific sectors “can help {brokers) deliver greater value to clients and differentiate themselves in a competitive market”.
The story is similar at aggregation business Specialist Finance Group, which has spent the past three years kitting out its commercial finance services to complement bread-and-butter residential distribution.
A&E finance “is off to a huge start” at SFG in 2025, says general manager Blake Buchanan (pictured, right), noting a nearly 30% surge in year-on-year volumes.
“It certainly is exciting to watch the growth from a few different angles as typical residential brokerages mature in their offer and diversify into this space,” he says. “Absolutely I see mortgage brokers grow their share as they evolve and become finance brokers to offer broader services to their clients.”
In speaking to these industry leaders, it becomes clear that the growing dominance of brokers in the A&E finance space stems from customers seeking a comprehensive range of broking services through a single point of contact. It comes back to the buzzword du jour – diversification.
Convenience is undoubtedly a motivating factor, but there’s reason for brokers to be flattered by their increasingly diversified profession. It indicates a substantial level of trust that their expertise goes far beyond writing standardised home loans.
At its core, Clowes sees A&E finance as part and parcel of offering the full scope of expertise to clients. “As businesses continue to seek tailored solutions, brokers are well positioned to capture an even larger share of the market and further establish themselves as essential players in the asset finance space,” he says.
While diversification may feel like a predominantly post-Covid buzzword, Buchanan sees broker diversification as a trend that first kicked off some 17 years ago in the wake of the GFC, when businesses were “looking to create other income streams in uncertain times”.
Read more: SMSFs offer brokers unique path to diversification
“I would say that it’s not a trend but a constant part of a brokerage's evolution,” Buchanan says. “Meaning that a broker joins the field, builds their model and, when ready, diversifies.”
Nonetheless, he has witnessed an acceleration of broker diversification more recently, “which is resulting in greater benefits to brokerages and their clients”.
Growing sustainably
Buchanan agrees that expert residential brokers can successfully diversify their models to offer expert assistance in this field, but he adds that brokerages are also inclined to hire in or contract out to existing experts in the field.
This makes for a win-win situation, Buchanan explains, as they can “both tap into the brokers’ existing database but also bring in new client types for a more holistic financial solutions relationship”.
Ultimately, it’s up to the individual broker how they want to grow their business, but Buchanan makes the important point that diversifying into A&E finance is not a decision to take lightly.
“Master your current craft before investing in diversification, rather than trying to be all things to all people but a master of none,” he says. “Investing can mean many things such as time, money, education and support. This industry is a giving one, so ask many questions of many people as they will be willing to help with your journey.”
Clowes stresses that brokers looking to dive deeper into asset and equipment finance must first become a trusted adviser to their clients. “This means understanding their unique needs, industry-specific challenges and financial goals so you can offer tailored solutions,” he says.
“Staying informed about the latest market developments, the diverse range of lender solutions and compliance requirements is essential in doing this.”
Regarding those lender options, Clowes says the flexibility in repayment structures, asset types and borrower profiles “means that brokers can find the right fit for their clients’ needs, whether they are looking for short-term or long-term financing, secured or unsecured loans”.
He adds: “This diversity is crucial for brokers; it enables them to offer more bespoke solutions, improving their ability to meet a wider range of client requirements.
“At Resimac, we are proud to be part of this diverse range of lending options, providing brokers with the flexibility and support they need to deliver the best outcomes for their clients.”
However, a common mistake Clowes sees brokers make when entering the A&E finance space “is underestimating the broad range of lending options and the intricacies of the industry”.
Asset finance is not a one-size-fits-all solution, he warns. “There are various products to suit different client needs. Brokers who may not invest time in understanding these details can potentially mismatch these client needs and the products they offer.”
Buchanan believes there is a healthy availability of lenders now available, “but this space requires constant evolution due to the speed of the transactions combined with technology and trend advancements”.
What’s trending?
Auto lending has enjoyed particularly strong growth at Resimac, partly because of its recent acquisition of the St. George auto portfolio, but also due to organic expansion. As a result, Resimac has sought to fortify its consumer finance and novated lease range to capture growing demand.
Sustainable finance solutions have also emerged as a priority, particularly in the electric vehicles and green technology sectors, which are “offering brokers the opportunity to align with their clients’ eco-friendly goals”.
Read more: Resimac completes migration of 100,000 Westpac customers
Buchanan has witnessed an emerging trend of customers cashing out against their assets to maintain cash flow through a high-cost environment “or to gear up for the next chapter of growth” as inflation continues to trend lower, creating a positive interest rate outlook among customers.
In terms of the health of the asset finance space, Buchanan says it “often operates the same way as all consumers – they tighten the belt when things get expensive and spend and grow when it’s less so”.
Many businesses have had to make “conservative decisions” about their A&E purchases amid rising costs of energy, transport and other fundamentals, says Buchanan, although “the outlook and confidence appears to be growing, and operators will also make financial decisions based on the outlook”.
Clowes says: “When business owners are more confident, they are more likely to invest in new equipment, machinery or vehicles.”
Put simply, if and when business confidence starts to improve, so will the opportunities for the adequately diversified broker start to multiply.
Unfortunately, there is no crystal ball telling us where rates and business confidence are heading next, especially at a time when an immensely unpredictable leader of the free world is tossing out tariffs like they are chocolate bars.
The most recent data points to a subdued appetite for business credit and asset finance applications, while the NAB business confidence index was trending below average at the time of writing.
For the diversified broker, perhaps the best course of action is to block out the noise and focus on making sure your business has the necessary tools to thrive in a competitive market.
As Buchanan warns: “Brokers who are not in this space run the risk of losing clients to more sophisticated firms if they do not have a plan or partnership in place to assist clients with these needs.”
