IN A list that is somewhat dominated by property development, it’s easy to forget about other areas of business. Yet it’s taken a broker from a particularly niche space – pharmacy finance – to add $40m to his settlement total, disrupt broking technology and break into the top five, all over 12 months. To add even more confusion, as Mark Churchill explains, in terms of pharmacy turnover “it was actually the worst year we’ve had”.
Allfin Finance, located in South Melbourne, is a pharmacy specialist, providing finance for equipment, refinancing, but primarily acquisitions, which is why the annual rate of acquisitions dropping from an average of 500 to 150 is such a concern. Nevertheless, five years of educating clients are “starting to pay off ” says Churchill, with more refinancing work, and business beginning to come in from other areas of health care.
“I think the general commercial market is just hard with banks,” says Churchill. “In the past, policy was just a guideline, and they’d do deals outside that. Now it’s become the general rule.” Consequently, lenders’ rigid application of policy has resulted in the average time for an acquisition deal being pushed out from eight weeks to up to 12.
Not that process isn’t important to Allfin; in fact it’s central to its value proposition. The aim is to walk the client through the process, says Churchill. “We demonstrate that we actually have taken it [the deal] to the banks … we do a process to review the deal before it goes to the banks, and get the client to sign off on it. Then once we go to the banks we come back with the four main options and they choose which bank they want to go with.”
This process “builds trust between us and the client – we’re not just giving them a name; we’re showing them the process and giving them the choice, and I think that’s paying off ”, Churchill explains. Another way that the brokerage seeks to build trust – and quite an unusual one in the commercial space – is by avoiding overly close relationships with other specialists. “I think that’s why people come to us, because their accountant also does their finance; he’s a pharmacy broker and does value-add services: the line starts to become blurred in terms of whether they’re getting the best deal or not.”
Allfin also aims to take a proactive role in regular reporting of the client’s position to the banks. “Most brokers don’t get involved in that at all, but I see it as a way to drive conversations with the client and make sure we’re in front of them once or twice a year.”
As the year comes to a close, Allfin is diversifying – into the software business. They’re co-creators and major shareholders in Kubio, a cloud-based platform that can process loans from start to finish, developed in conjunction with other commercial brokers and Macquarie Business Banking. Churchill believes the platform will have a huge impact. He says: “The concept will change this industry … I came on board with the healthcare piece. We’re already national but we want to get bigger, and we need the platform to do it.”