Thinktank: A bold future

Jonathan Street and Peter Vala offer their thoughts on the future of Thinktank, the commercial market, and where brokers fit into the picture

Commercial lender Thinktank is going through a bold transition at present. CEO Jonathan Street and head of sales and distribution Peter Vala offer their thoughts on the future of Thinktank, the commercial market, and where brokers fit into the picture

MPA: As a specialist commercial property lender, have you noticed any trends in the market that brokers should be aware of?

Jonathan Street: We’d have to say the most apparent trend over the past year or so has been the shift in commercial property purchasers towards buying in an SMSF. Although not all purchasers are borrowing as part of the acquisition, the sea change clearly demonstrates the rapidly increasing awareness among SMEs, property investors, wealth advisers and finance professionals of the significant capital gains and income tax advantages of holding property to term within a super fund.

Anecdotally, we have been seeing between six and eight out of 10 purchases of commercial property below $5m going into SMSF structures, and, unless the federal government substantially moves the goalposts, this trend is here to stay, particularly for commercial property where a business owner-occupier can hold their property in a SMSF and lease it back. Brokers, lenders, advisers and borrowers should all become well informed of the benefits of SMSFs and look for opportunities to become involved, or increase their involvement, in this rapidly evolving segment of the market.

MPA: What’s your approach to forging strong relationships with the broker channel?

Peter Vala: We have always had a can-do attitude and seek to maintain regular communication with our business partners. Thinktank essentially helps brokers meet their clients’ financial needs. I am looking to deepen our relationships within the broker community and provide an outstanding level of service based upon my own experience, understanding of the industry, commercial property and credit knowledge, and our market-leading package of financial options, access and support.

MPA: What would you say makes Thinktank stand out from other commercial lenders?

PV: At times there has been a perception that we are a second-tier nonconforming lender. The reality is Thinktank is a specialist commercial property finance provider that offers a genuine and indeed better alternative in many cases to mainstream commercial finance options. We are not here to cross-sell other products and services that attempt to lock the client’s wallet and goodwill into the one financial institution or in any way detract from, or undermine, a broker’s relationship with the borrower.

We have a deep understanding of the commercial property market and we share this knowledge openly with our accredited introducers via our personal communication, regular market updates, and in the course of individual deals. It is this unique understanding of the commercial property sector that allows us to assess transactions in a different light to other institutions and allows us to
provide tailored terms and conditions to the benefit of the customer and their individual circumstances.

MPA: Based on broker feedback that you’ve received, what would you say are the key issues or challenges that brokers are facing at the moment?

PV: Customer retention: A broker’s business revolves around their client base, and it is paramount that the broker remain a trusted adviser of their customer. Actions by some in the market can see this relationship challenged or diminished, particularly where the funder appears to assume a trusted adviser position in the borrower’s mind and, in turn, a broker’s future business can be
jeopardised. Thinktank unreservedly respects the fundamental and ongoing relationship between a client and their broker, which means we see our accredited brokers as both clients and trusted business partners for the long term.

Potential commission changes: We understand viable trailing commission is an important part of a broker’s income stream, and as such we remain committed to delivering flexible, trail-based remuneration to brokers from date of settlement right through to loan discharge. While other lenders are constantly turning on or off the commissions tap according to market conditions and their own circumstances, our approach on commissions has not changed from day one nearly a decade ago, and that is to pay leading commissions and leave the option of flexibility in the hands of our finance partners.

MPA: What kind of feedback have you been receiving regarding Thinktank’s service proposition?

JS: We continually receive positive feedback around our service and delivery. Internal and independent external surveys have backed that up, but it doesn’t mean there aren’t areas where we can still seek to make improvements. Peter coming on board last month has been a great addition for us. He is extremely service focused and relationship driven, which only adds to our overall proposition. Ultimately, it is all about the package we offer brokers and their clients. A business like ours must offer a compelling combination of relevant products, contemporary modes of access and delivery, consistently outstanding service, and value-adding expertise in property and finance that is relevant to our finance partners and their clients.

MPA: Thinktank is going through a transformative time after expansion in funding lines and the introduction of key initiatives based around technology, product development and brand reach. What can you reveal about the transformation?

JS: While we are still in the mid-stages of the transformation, we have been very encouraged by the positive response received right across our business relationships, from finance partners to service providers, stakeholders and institutions in capital markets. The motivation behind the change has been to allow the business to shift gears by extending our market reach, becoming more accessible, directing investment into core relationships, and scaling up our operations and funding.

Everything has been slotting into place very smoothly, and the most pleasing aspect for us at this stage is the validation received from not only the positive feedback but the immediate uplift we have seen in actual loan volumes and the pipeline of new business. Things are looking very positive.

MPA: Thinktank revealed its new branding at this year’s MFAA National Convention. What has been the reaction to this?

JS: On the whole, reaction has been great and overwhelmingly positive. As is always the case with these things, we’ve received some ‘constructive’ feedback in there as well, but the change-up has people looking, talking and engaging with us, which is fantastic.

MPA: What are Thinktank’s plans for the year ahead?

JS: We expect the year ahead to be a busy one as we keep the focus on execution around key initiatives such as an imminent product release in the SMSF area, further technology roll-outs that have us quite excited, a move to larger premises next month to accommodate our progressive expansion and, for the most part, continuing to build on and invest in our key relationships and partners within the industry.

We are seeing, and are keen to continue seeing, measured growth occurring in our business and that of our business partners, yet we do remain inherently watchful around the direction of the economy alongside implications for both residential and commercial property markets.

We are in a different era of shorter cycles and pervasive uncertainty, which makes it a challenge for everyone running a business, although that doesn’t necessarily diminish the number of types of opportunities that are out there, and, for our part, we anticipate a pretty solid year ahead.