Background

This firm is a commercial finance brokerage based in Leeds, established in 2017. The two principals specialise in commercial mortgages, development finance, and bridging loans. Their average deal size is substantial, typically generating proc fees of 5,000 to 15,000 pounds per case. But commercial deals are infrequent and unpredictable. A single deal can take three to six months to complete, and some fall through entirely after weeks of work.

The firm's annual revenue was healthy on paper, around 280,000 pounds, but the monthly distribution was wildly uneven. One month might see 45,000 pounds in completions. The next might see nothing. This cash flow volatility created genuine business stress: they had to maintain staff, office space, and operating costs regardless of whether deals were completing. The principals were spending considerable time and energy on pipeline management and cash flow forecasting rather than growing the business.

The Challenge

The firm wanted to add a more consistent, predictable revenue stream to complement their commercial work. Residential mortgages seemed like a natural fit: the principals held the appropriate qualifications, the regulatory permissions were already in place through their network, and the products were considerably simpler than the commercial deals they handled daily. The challenges were practical:

  • No residential pipeline: All their marketing, relationships, and reputation were built around commercial finance. They had no flow of residential enquiries.
  • Different skill set: While the principals understood residential mortgages, they hadn't actively advised on them for years. The lender landscape, products, and processes had changed.
  • Time allocation: The principals needed to continue focusing on commercial deals. Adding residential workload on top wasn't sustainable long-term.
  • Volume requirements: Residential cases generate much smaller fees than commercial deals. To make a meaningful impact on revenue and cash flow, they needed a significant and consistent volume of residential completions.

The Solution

The firm decided to hire a residential mortgage adviser specifically to handle the new lead-based business. They recruited an experienced mortgage adviser who had been working at a large network and was looking for a more entrepreneurial environment.

We set up a lead programme combining two lead types that complemented the firm's existing expertise:

The buy-to-let leads were a strategic choice. The firm's commercial expertise meant they could handle complex BTL cases that many residential-only brokers would struggle with: HMOs, limited company structures, portfolio landlords, and commercial-to-residential conversions. This overlap created a competitive advantage that improved conversion rates on BTL leads specifically.

The new residential adviser was set up with their own CRM pipeline, instant lead notifications, and the follow-up system we provide to all new partners. They were fully operational within two weeks of starting.

The Results

The residential adviser proved to be an excellent hire. With experience handling leads from their previous role, they were already familiar with the speed and persistence required. Their contact rates were above 70% from week one.

The buy-to-let leads produced particularly strong results. Many BTL enquiries involved complex structures that the adviser could handle thanks to the firm's commercial lending knowledge and connections. When a standard BTL case turned into something more complex, such as a portfolio landlord needing commercial finance for a new development, the principals could pick up the case and add it to their commercial pipeline. This cross-pollination between residential and commercial wasn't planned, but it became a valuable source of additional commercial deal flow.

Results over six months:

  • Month 1: 100 leads, 5 completions, 4,200 in proc fees
  • Month 2: 100 leads, 8 completions, 6,800 in proc fees
  • Month 3: 100 leads, 10 completions, 7,500 in proc fees
  • Month 4: 100 leads, 12 completions, 8,400 in proc fees
  • Month 5: 100 leads, 13 completions, 9,100 in proc fees
  • Month 6: 100 leads, 12 completions, 8,400 in proc fees (plus 2 cases referred to commercial division)

By month four, the residential division was generating approximately 8,400 pounds per month in proc fees. This wasn't life-changing revenue compared to a single large commercial deal, but its consistency was transformative. The firm now had a baseline of 8,000+ pounds in monthly revenue that they could rely on regardless of what happened with their commercial pipeline.

The cost per lead averaged 31 pounds across both lead types. With a 12% lead-to-completion rate and average proc fees of approximately 700 pounds per residential case, the return on lead investment was strong. Buy-to-let cases averaged higher fees (around 900 pounds) due to larger loan sizes, while standard residential cases averaged around 550 pounds.

The unexpected commercial cross-referral benefit was significant. Over six months, seven BTL lead enquiries converted into commercial cases worth a combined 42,000 pounds in proc fees, cases that would never have reached the firm without the residential lead programme.

Cash Flow Impact

The most important outcome wasn't the total revenue but the cash flow stability. Before the residential programme, the firm's monthly revenue looked like a seismograph: dramatic peaks and troughs with no predictable pattern. After six months with the residential programme, the pattern smoothed considerably. Residential completions provided a steady baseline of 8,000-9,000 pounds per month, on top of which commercial deals added their larger but irregular contributions.

This stability had practical benefits beyond the numbers. The principals stopped worrying about whether they could cover next month's payroll. They invested in better technology. They began planning a second residential adviser hire. The reduced stress around cash flow actually improved their commercial deal conversion because they were negotiating from a position of strength rather than desperation.

What Made the Difference

The firm's principal highlighted the strategic decision to treat residential as a separate business unit:

'If we'd tried to do residential ourselves alongside our commercial work, it would have failed. We'd have let leads go cold because we were busy on a commercial deal, and the whole thing would have fizzled out. Hiring a dedicated person and giving them the tools and leads to build their own pipeline was the right approach.'

They also noted the unexpected synergy between residential leads and commercial business:

'Some of our best commercial deals this year came from BTL leads that turned into something bigger. A landlord looking for a buy-to-let mortgage mentions they're also looking at a development project. That conversation doesn't happen if we're not in the residential space at all.'

'We built our business on commercial deals, and we're still proud of that expertise. But adding residential leads has given us something commercial never could: consistency. Knowing that a baseline of revenue is coming in every month, regardless of whether a big deal completes, has fundamentally changed how we operate. It's reduced stress, improved decision-making, and opened up opportunities we didn't expect.'

- Principal, Leeds Commercial Finance Broker

The firm is now planning to increase their lead volume and add a second residential adviser. They're also exploring commercial finance leads to see whether digital lead generation can work for their core business as effectively as it has for residential.