How asset finance lenders are responding post-COVID

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With phase two of the government’s existing SME guarantee scheme due to close at the end of this month, Brent Starrenburg believes it will be interesting to see what happens with lender appetite. Despite this, the head of asset finance for Connective has seen many asset finance lenders relax their policies around COVID-affected industries – one of many signals that the asset finance sector will thrive for the foreseeable future.

“I expect that asset finance activity will continue to be strong for the next 6-12 months,” Starrenburg told MPA. “Everyone would agree the recovery has been a lot stronger than what was anticipated. We’ve seen the growth in the asset finance space continue on an upward trend as an aggregator, but we’ve also seen more brokers utilise the (Connective’s asset finance) platform and get into that space with a bit more confidence in knowing they’ve got this system that will help them get through it.”

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Starrenburg said recently the used car market went up significantly in terms of both price and demand after COVID-19 put the brakes on shipping in new vehicles.

“We’re now starting to see a lot of those new cars come through, so the demand for new cars is starting to increase again and I’m expecting that will start to go through towards the end of the year,” he said.

Over the past year, demand for caravans and other leisure equipment skyrocketed as people unable to travel overseas found new ways to get some rest and recreation, he said. But it hasn’t just been consumers looking for asset finance. The government’s extension of the instant asset write-off scheme has seen a lot of SMEs bring forward equipment purchases.

“We’ve seen that have an effect in May as well as June,” he said.

Witnessing an impressive growth in conversions on Connective’s asset finance platform, Starrenburg said more brokers were interested in expanding their services to clients beyond just mortgages. He said operating under the term finance broker rather than mortgage broker was a good way to grow awareness among a broker’s client base.

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“If you say I’m a mortgage broker, the first thing people think is that’s all you do,” he said. “Whereas if you say you are a finance broker, then obviously you do various aspects of finance, whether that be asset finance, personal loans, commercial finance or mortgages. By having that diverse value add, or offering it, it helps to even that relationship and builds trust and loyalty within your client base.”

Kate McIntyreKate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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