A stalwart of the self-employed
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The number of self-employed borrowers supported by Resimac is growing, and the leading non-bank wants to share its success with brokers
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THOSE WHO are self-employed can take some comfort from the fact that, as they head into far more challenging business conditions in 2023, one leading non-bank has the experience to help them ride out the storm.
“A self-employed borrower may not have a full year’s financials, or they may have irregular income, but the good news is these borrowers may still satisfy our flexible credit policy,” says Resimac general manager distribution Chris Paterson.
Resimac is the ideal lender when it comes to the self-employed because it offers the full range of loan types that might be needed as a customer re-establishes their financial status.
“Because we offer the full range of lending products – from prime through to specialist – self-employed customers can use our near prime and specialist products as a stepping stone to help them rebuild,” says Paterson.
“Once they’ve demonstrated meeting their repayments over a required period, eligible customers on a specialist product may then be able to move to a prime product.”
Resimac is one of Australia and New Zealand’s premier non-bank lenders. We offer competitive interest rates and flexible home loan options with great features, including offset accounts and the ability to make extra repayments and redraw funds. Thanks to our flexible funding program, we provide solutions to a wide range of customers, including the self-employed and contractors as well as customers with previous credit impairments, through our network of over 12,000 broker partners.
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Chris Paterson, Resimac
Many self-employed customers are concerned as economic indicators increasingly show that the rate-hiking cycle that began last May is finally starting to have an effect on consumer sentiment. Retail trade and other areas reliant on disposable income were subdued heading into the Christmas period as consumers reallocated money to higher home loan repayments, energy, food and other essentials.
CreditorWatch data shows that credit enquiries from businesses overall in November had increased by a massive 87% year-on-year and 61% since the previous month.
Chris Paterson, Resimac
“Rising rates and inflation have made self-employed borrowers particularly keen to find financial relief,” says Paterson.
Debt consolidation is a big part of this.
“These borrowers are trying to reduce their bills and repayments wherever they can, and debt consolidation can help.”
Resimac has long served the self-employed, who make up around 14% of the employed population in Australia, and the non-bank understands the barriers this group can face at banks.
“The self-employed need a lender that will take a holistic view of their position,” says Paterson. “These borrowers are best served by a lender that looks at their employment history, historical income, current income, security property and wider circumstances.”
Running your own business is not like other forms of employment, and Resimac understands that even as the economy heads into more uncertain times, being self-employed still retains significant appeal for a certain entrepreneurial mindset.
“For many Australians, the career dream is to be self-employed and run their own successful business,” says Paterson. “People want the flexibility to run a successful business, earn and drive their own income. Our team at Resimac can help them to do that.”
Government data shows that, as of the end of June 2022, there were 167,646 new businesses in Australia – a 7% increase on the same time a year before, despite the disruption caused by events such as the pandemic, climate-related disasters and their flow-on effects. Of these new businesses, which included sole proprietorships, some 84% were non-employing.
Self-employed customers are also a current growth story for Resimac. In November, the proportion of broker settlements using its near prime and specialist products reached approximately 70% of the product mix, with most of these borrowers falling into the self-employed segment.
What appears to be a tougher year ahead is unlikely to alter this trend.
“The popularity of those products is growing month-on-month for us, and we expect this to continue in 2023,” says Paterson.
“We have a really strong BDM team that goes above and beyond to understand a broker’s business and educate them on solutions,” says Paterson.
Resimac’s marketing communications also keep brokers informed about market trends and how the non-bank can help.
Paterson is keen to counter an image problem that the self-employed have in some parts of the lending market.
“We want to clarify that this customer category can be good-quality, compliant, and there are solutions for them.”
With the ranks of the self-employed growing, and Resimac lifting its share of this segment, there are clearly opportunities for brokers to open up new lines of business just as other, more vanilla lending appears set to ebb.
“By diversifying into this segment, [brokers] can grow their businesses,” says Paterson. “If you deliver good service, you will find a word-of-mouth network that will generate referrals.”
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“Rising rates and inflation have made self-employed borrowers particularly keen to find financial relief”
“We want to clarify that [the self-employed] customer category can be good-quality, compliant, and there are solutions for them”
The number of self-employed borrowers supported by Resimac is growing, and the leading non-bank wants to share its success with brokers
The number of self-employed borrowers supported by Resimac is growing, and the leading non-bank wants to share its success with brokers
Market entry and exit rates for non-employing businesses
He says Resimac stands out from the competition in a market that is sometimes not well served by parts of the financial industry. Resimac offers highly competitive alt-doc products, with some of the lowest rates in the sector.
“Not all lenders offer these alt-doc products,” says Paterson.
They help free up borrowers’ cash flow to run a business and make it easier for them to consolidate debt. These are common needs of the self-employed. All Resimac products also come with features such as offset accounts, redraw and Visa debit cards.
Brokers have an important role to play here as the self-employed scramble to batten down the hatches for 2023. Learning about alt-doc products may be new for some brokers, but Resimac’s wealth of experience can make it easy.
% of SMEs expecting to need extra finance over following 3 months
Source: SME Sentiment Tracker by ACA Research
Offering assistance when it’s needed will help brokers build strong relationships with their clients for the future when times are less uncertain. It makes sense for brokers to diversify the markets they serve not only for the benefit of their own bottom lines but also to help out a group of plucky and resilient businesspeople who are a key mainstay of a healthy economy.
As a leading lender in the area, Resimac is a natural choice for brokers serving this market.
“We are really seeing our products resonate with self-employed borrowers, and we want brokers to share in our success,” says Paterson.
IN Partnership with
“We want to clarify that [the self-employed] customer category can be good-quality, compliant, and there are solutions for them”
CHRIS PATERSON, RESIMAC
“We want to clarify that [the self-employed] customer category can be good-quality, compliant, and there are solutions for them”
CHRIS PATERSON,
RESIMAC
15
12
9
6
3
0
11%
12%
15%
Sept 22
Oct 22
Nov 22
Source: ABS Counts of Australian Businesses, including Entries and Exits
Entry
Exit
25.1%
17.6%
16.2%
15.8%
2021/22
2020/21
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Copyright © 2023 KM Business Information Australia Pty Ltd
Copyright © 2023 KM Business Information Australia Pty Ltd
Copyright © 2023 KM Business Information Australia Pty Ltd
Source: ABS Counts of Australian Businesses, including Entries and Exits
25.1%
16.2%
17.6%
15.8%
Entry
Exit
2021/22
2020/21
Market entry and exit rates for non-employing businesses
Source: ABS Counts of Australian Businesses, including Entries and Exits
25.1%
16.2%
17.6%
15.8%
Entry
Exit
2021/22
2020/21
Market entry and exit rates for non-employing businesses
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Lasting appeal of owning a business
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