Maintaining his sixth position from last year with an impressive increase in the number and value of loans settled, Tom Waltham says his success has been down to strong relationships with clients and lender partners as well as a broad understanding of banking and finance across a number of sectors.

Being solutions-driven and focused on providing a service that meets clients’ expectations results in a lot of repeat business and referrals, says the managing director of Capital United.

The brokerage grew from its establishment in Adelaide in 2007 as a commercial finance business with one client to one that has been expanded to service clients across a range of transactions types.

“We are a small team of professionals who are passionate about what we do,” Waltham says.

Looking back at the commercial space in 2019, Waltham says he had noticed a trend of increased bias of lenders towards good existing clients, rather than new borrowers, and he expects this trend to continue.

In SME lending, from which just over a quarter of Waltham’s loans have stemmed, he says lenders were increasing their funding allocations and, while core lending parameters and credit principals remained unchanged, more lenders were prepared to lend against balance sheets in comparison to previous years.

“Understanding what certain lenders were/are looking for allowed us to actively target borrowers with a cash flow funding need that could be met by a lender’s product – whether that be for domestic or international trade finance; general working capital finance; debtor finance or other,” he says.

“The strong entry to the market of a number of non-bank lenders also had an impact and has opened up lending to the SMEs that traditionally would not have been able to access this type of funding.”

More than two thirds of Waltham’s loans over the past 12 months were for development finance, but with the pandemic he believes access to this funding will be “extremely challenging”. He says, “We have already seen a number bank of non-bank lenders indicate that they are putting a hold on any new-to-bank development finance applications, rather than pricing for risk, reducing LVRs or increasing presale requirements.”

Over the next few months in the commercial space, Waltham expects fewer transactions and more time-intensive application processes, but with a small and flexible team he says Capital United can look at transactions across all types of borrowers.

“Going forward we will continue to support our clients and the challenges they face and assist them to navigate the COVID-19 environment and the uncertainty around the economic and banking and finance sector. We still have enquiries; however, the enquiries have changed,” he says.

Total value of loans settled: $139,637,432
Number of commercial loans settled: 41
Average commercial loan size: $3,405,791
Years as a commercial broker: 13
Aggregator: FAST

Link: MPG Top10 Commercial Broker List for 2020

Another South Australian representative on this year’s list, Tom Waltham operates Capital United out of Adelaide CBD. The debt advisory and broking firm specialises in debt finance across a range of transaction types and sectors.

The father of three began his career as an accountant, followed by a range of other roles, before becoming a NAB BDM for the corporate banking team in Adelaide. He spent nearly five years at the major bank and ended up in a senior relationship manager role in business banking. “I thoroughly enjoyed my time at NAB and learnt a lot about banking and finance,” he says. “It was my time at NAB that opened my eyes to the opportunity in the third party space.”

Waltham’s interest in setting up a broking business was “peaked” in 2007 after learning that third party residential transactions settled with the major banks accounted for around 40% of all residential loans, whereas at the same time commercial introduced transactions only accounted for approximately 10% via third party.

“Wind the clock forward to current day, and commercial volumes introduced to the major banks now account for circa 40% via third party and residential volumes at circa 59% via third party, and growing,” he says.

Waltham says there is no doubt lending parameters have tightened and turnaround times have increased over the past 12 to 18 months as a result of the royal commission, but he still believes there has been no better time to be a broker.

“Having strong relationships across a number of lenders, as well as an in-depth knowledge of which lenders are funding certain transaction types, should allow brokers to value add and meet their client’s need in obtaining optimal loan terms,” he explains.

Even before the past 12 months, Waltham knew how important it was to maintain and create relationships with multiple lenders. He said it was a “main focus” of his to do that and his relationships extended across major banks, credit unions, second tier lenders and private funders. In 2018 the group settled deals across 10 lenders.

Going a step further than this, finding the major banks becoming more restrictive in property lending after macro prudential reforms were introduced post-GFC, Waltham co-founded non-bank lender Keystone Capital in 2013. The lender specialises in first mortgage property transactions and has seen significant growth in both borrower and investor demand across Australia.

Looking ahead, Waltham expects while the second tier and non-bank sector will continue to grow, the major banks will look “aggressively” to retain existing clients that meet their lending parameters, as well as offer competitive terms to new bank clients that tick the right boxes.

“Clients that that do not necessarily meet all lending requirements may have to look beyond the majors and toward the rapidly expanding second tier and non-bank sector for their debt funding needs – via a reputable broker of course,” he adds.

Total value of commercial loan settlements: $150,979,471
Number of commercial loans settled: 24
Average commercial loan size: $6,290,811
Years as a commercial broker: 18
Aggregator: FAST

Link: Your Mortgage