Brokers turn to specialist financier for developer clients
Reporter
The major banks’ tightened lending criteria has helped deliver a 30 per cent lift in volumes at specialist financier NWC Finance, the lender has said.
According to the short-term financier, an increase of demand for land owner and developer finance was a major contributor to the rise in lending over the 2016/17 financial year.
Joe Morello, director at NWC Finance, elaborated: “Finance brokers are coming to us from around Australia as their clients are having their finance pulled at the last minute by their banks.
“We are seeing record demand largely coming from owners seeking urgent finance after they have received a notice to complete from their banks, which have pulled the pin at the last minute before settlement of purchase.
“We are also finding more demand from finance brokers, lawyers and accountants, whose investor clients are failing to gain Tier 1 lender backing of their land banking, with volumes up [by] 40 per cent over the last year in this sector.”
Mr Morello said that there had also been “strong demand” from clients suffering from “cash flow problems” and struggling to refinance their existing banking facilities.
According to the director of NWC Finance, the banks have become “very strict in providing finance because of tightened lending policies as a result of new APRA controls on their capital adequacy and concern about potentially high-risk loans”.
He said that the company, which provides short-term loans of up to $20 million on first and second mortgages, expects to be approached by more brokers, accountants during the 2018 financial year “as the banks further tighten their lending practices”.
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