30 Aug Five minutes with Glen Barnes at Commercial Finance Connections
This month we sat down with Glen Barnes, founder and director of Commercial Finance Connections, who generously shared his insights on current market trends, and where private lending is playing a significant role in the commercial finance sector.
With a career in banking and finance spanning 35 years, commercial finance broker Glen Barnes has helped companies navigate the highs and lows of market cycles, regulatory changes, the global financial crisis, and more recently the pandemic.
And through the challenges and opportunities, there are two constants, Glen says, which will always place a company in good stead: reputation and relationships.
Why did you make the switch from banking to brokering?
I enjoy the diversity that comes with brokering and the ability to build long-term relationship with clients and industry colleagues.
As a broker, you’re able to become more solutions and relationship focused. We can take a broad view of the market for our clients and advise accordingly – we know the hurdles and the opportunities, and we have a panel of lenders we can go to.
What areas do you specialise in?
Our clients range from small and medium-sized family businesses to larger private groups with annual turnover anywhere between $100 million and $500 million.
Where’s the best financial solution for businesses with a risk appetite?
When a deal isn’t mainstream, we know that the best solution is private lending. Proven cash flow is so important to banks from a risk perspective. I’ll direct clients to IBN Private when I know they can establish and prove their model within 12 – 18 months.
A great example of this would be a newly built retail centre, not yet fully committed by tenants. The developer/asset owner may require a short-term loan to create incentives, such as fit outs, to fully lease the asset. They can then reset and transition to traditional banking.
How important is it to secure quick approvals for your clients?
The time it takes for a finance approval to get to ‘yes’ can have a huge impact on a business.
There are the costs associated with lost time, or lost deals, and reputation cost is another factor. Our job is to find them the best solution, sooner.
How is the growth in Fintech changing the way people borrow?
There’s a huge growth in Fintech, but interest rates are as high as 14%. Their loan limits are also capped, so they can’t grow with you.
In my experience, relationships and success are things you can rely on, and corporate memory is still so important.
The gap between banking and private lending is narrowing and it makes more sense for businesses to continue to explore their options in these spaces. At the good end of private lending, you can secure interest rates of between 7% and 8% on commercial lending, and at the bad end of banking you can land in the territory of 6%.