What makes borrowers choose non-bank lenders?

September 15, 2021

September 15, 2021

September 15, 2021

What makes borrowers choose non-bank lenders?

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In this educational piece, we explore why are non-bank lenders so popular and how they differ from their banking counterpart.

The pull-back of traditional lenders post the GFC, coupled with tighter lending standards for banks imposed by APRA, meant some real estate borrowers were left short. Seeing an opportunity to fill the gap, non-bank lenders have emerged to fill the void.  

Same, same but different

Non-bank lenders are much like banks in that they’re both financial institutions that provide loans. But that’s about where the similarities end. Banks are built to service the mainstream borrower. Their systems and processes are designed to process transactions in bulk, based on fairly rigid qualification criteria. Loans that fall outside this tight range generally won’t be funded by the banks. This is where the opportunity for non-bank lenders lies. 

The rise of the non-bank lender

Non-bank lenders have carved out a growing share of the market by offering value in areas that are important to borrowers, but where the banks get stuck. Looking for a faster response? Need to speak to a decision-maker? Want a customised solution? Need a shorter-term loan? In all these cases, a non-bank lender can offer value and a customer-centric solution.

These are some of the factors that borrowers value, that draws them towards non-bank lenders:

  1. Speed: Borrowers need fast access to funds so they can take advantage of an opportunity as it arises. Non-bank lenders can generally provide loans quicker and with more flexibly than traditional banks.

  2. Flexibility: Borrowers can customise the loan to their requirements based on the purpose of the loan and underlying real estate asset.

  3. Access the decision makers: Non-bank lenders are smaller and more nimble than large banks. Borrowers generally deal directly with management who are the key decision-makers on funding.

  4. Simple paperwork: The paperwork is commercially focused, and so much simpler than applying for a traditional bank loan.

  5. Assessment criteria: Non-banks have their own methods for evaluating customers and are more flexible in assessing deals.

Is private real estate debt right for you?

If you’re a wholesale investor looking for exposure to 1st mortgage-backed real estate opportunities, AltX’s platform provides direct access on a ‘deal-by-deal’ basis. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

The pull-back of traditional lenders post the GFC, coupled with tighter lending standards for banks imposed by APRA, meant some real estate borrowers were left short. Seeing an opportunity to fill the gap, non-bank lenders have emerged to fill the void.  

Same, same but different

Non-bank lenders are much like banks in that they’re both financial institutions that provide loans. But that’s about where the similarities end. Banks are built to service the mainstream borrower. Their systems and processes are designed to process transactions in bulk, based on fairly rigid qualification criteria. Loans that fall outside this tight range generally won’t be funded by the banks. This is where the opportunity for non-bank lenders lies. 

The rise of the non-bank lender

Non-bank lenders have carved out a growing share of the market by offering value in areas that are important to borrowers, but where the banks get stuck. Looking for a faster response? Need to speak to a decision-maker? Want a customised solution? Need a shorter-term loan? In all these cases, a non-bank lender can offer value and a customer-centric solution.

These are some of the factors that borrowers value, that draws them towards non-bank lenders:

  1. Speed: Borrowers need fast access to funds so they can take advantage of an opportunity as it arises. Non-bank lenders can generally provide loans quicker and with more flexibly than traditional banks.

  2. Flexibility: Borrowers can customise the loan to their requirements based on the purpose of the loan and underlying real estate asset.

  3. Access the decision makers: Non-bank lenders are smaller and more nimble than large banks. Borrowers generally deal directly with management who are the key decision-makers on funding.

  4. Simple paperwork: The paperwork is commercially focused, and so much simpler than applying for a traditional bank loan.

  5. Assessment criteria: Non-banks have their own methods for evaluating customers and are more flexible in assessing deals.

Is private real estate debt right for you?

If you’re a wholesale investor looking for exposure to 1st mortgage-backed real estate opportunities, AltX’s platform provides direct access on a ‘deal-by-deal’ basis. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

The pull-back of traditional lenders post the GFC, coupled with tighter lending standards for banks imposed by APRA, meant some real estate borrowers were left short. Seeing an opportunity to fill the gap, non-bank lenders have emerged to fill the void.  

Same, same but different

Non-bank lenders are much like banks in that they’re both financial institutions that provide loans. But that’s about where the similarities end. Banks are built to service the mainstream borrower. Their systems and processes are designed to process transactions in bulk, based on fairly rigid qualification criteria. Loans that fall outside this tight range generally won’t be funded by the banks. This is where the opportunity for non-bank lenders lies. 

The rise of the non-bank lender

Non-bank lenders have carved out a growing share of the market by offering value in areas that are important to borrowers, but where the banks get stuck. Looking for a faster response? Need to speak to a decision-maker? Want a customised solution? Need a shorter-term loan? In all these cases, a non-bank lender can offer value and a customer-centric solution.

These are some of the factors that borrowers value, that draws them towards non-bank lenders:

  1. Speed: Borrowers need fast access to funds so they can take advantage of an opportunity as it arises. Non-bank lenders can generally provide loans quicker and with more flexibly than traditional banks.

  2. Flexibility: Borrowers can customise the loan to their requirements based on the purpose of the loan and underlying real estate asset.

  3. Access the decision makers: Non-bank lenders are smaller and more nimble than large banks. Borrowers generally deal directly with management who are the key decision-makers on funding.

  4. Simple paperwork: The paperwork is commercially focused, and so much simpler than applying for a traditional bank loan.

  5. Assessment criteria: Non-banks have their own methods for evaluating customers and are more flexible in assessing deals.

Is private real estate debt right for you?

If you’re a wholesale investor looking for exposure to 1st mortgage-backed real estate opportunities, AltX’s platform provides direct access on a ‘deal-by-deal’ basis. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

The pull-back of traditional lenders post the GFC, coupled with tighter lending standards for banks imposed by APRA, meant some real estate borrowers were left short. Seeing an opportunity to fill the gap, non-bank lenders have emerged to fill the void.  

Same, same but different

Non-bank lenders are much like banks in that they’re both financial institutions that provide loans. But that’s about where the similarities end. Banks are built to service the mainstream borrower. Their systems and processes are designed to process transactions in bulk, based on fairly rigid qualification criteria. Loans that fall outside this tight range generally won’t be funded by the banks. This is where the opportunity for non-bank lenders lies. 

The rise of the non-bank lender

Non-bank lenders have carved out a growing share of the market by offering value in areas that are important to borrowers, but where the banks get stuck. Looking for a faster response? Need to speak to a decision-maker? Want a customised solution? Need a shorter-term loan? In all these cases, a non-bank lender can offer value and a customer-centric solution.

These are some of the factors that borrowers value, that draws them towards non-bank lenders:

  1. Speed: Borrowers need fast access to funds so they can take advantage of an opportunity as it arises. Non-bank lenders can generally provide loans quicker and with more flexibly than traditional banks.

  2. Flexibility: Borrowers can customise the loan to their requirements based on the purpose of the loan and underlying real estate asset.

  3. Access the decision makers: Non-bank lenders are smaller and more nimble than large banks. Borrowers generally deal directly with management who are the key decision-makers on funding.

  4. Simple paperwork: The paperwork is commercially focused, and so much simpler than applying for a traditional bank loan.

  5. Assessment criteria: Non-banks have their own methods for evaluating customers and are more flexible in assessing deals.

Is private real estate debt right for you?

If you’re a wholesale investor looking for exposure to 1st mortgage-backed real estate opportunities, AltX’s platform provides direct access on a ‘deal-by-deal’ basis. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit here.

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AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd