Non-bank lender doubles warehouse lending

With already $500 million in loans written in two years, specialist non-bank lender Central Real Capital (CRC) has doubled its Balmain Corporation warehouse facility to $200 million , it announced on Wednesday (28 September).

Coupled with a planned injection of $100 million in additional private capital from founder Tony Denny, the expanded warehouse line, “ strengthens CRC’s position as a leading non-bank provider of development finance, with total financing capacity of more than $500 million expected by next July,” it confirmed.

The capital boost coincides with CRC reaching $500 million in total loans written since commencing operations two years ago with $200 million of its founder’s private capital, CRC explained.

CRC specialises in financing developments in the early or pre-construction phase, where traditional banks are often unable or hesitant to participate, it clarified.

Underlying collateral can include land with or without a development approval (DA), residual residential stock, selected non-residential construction, retail, commercial and industrial assets, it explained.

With typical loan terms of up to 12 months, CRC acts as a financial bridge enabling a borrower to advance their project to a point where it can be refinanced by a bank on more conventional terms, it added.

Mr Denny said CRC was filling a gap in the market for debt funding of up to $20 million tailored to the specific needs of mid-scale commercial or residential developments.

“We are seeing a lot of projects that are highly bankable, but do not sit within traditional bank lending models — even more so as credit markets and bank lending criteria tighten,” Mr Denny said.

“With $500 million in loans written within two years, our approach clearly is resonating.

“There is room for private lenders that are nimble, who understand and can move quickly to meet developers’ funding needs, and who are reliable.”

Extending its Balmain partnership

Since writing its first loan in 2020, CRC has lent to more than 50 development projects, advancing an average of $8.3 million with an average loan tenor of 12 months, it highlighted.

Projects financed by CRC have included fast-food outlets in Queensland and regional NSW; the acquisition of an amalgamated site in Newport; and residential subdivision projects in Sydney’s north-west and south-west growth corridors.

CRC chief executive David Stone said CRC was delighted to be extending its partnership with Balmain Corporation in supporting its fast-growing lending platform. 

“Strong developer activity coupled with nervousness from mainstream banks is driving increased levels of enquiry,” Mr Stone said.

“Put simply, borrowers want private lending that is reliable.

“Banks have a role to play in financing developments, but they face constraints that private lenders do not.

“The combination of our institutional funding and the backing of a highly committed private balance sheet — $500 million in total —
gives us flexibility, depth and nimbleness that many other lenders can’t match.

“We see an enormous opportunity to build on our existing platform to become the pre-eminent private provider of development finance in Australia.”

[Related: Breaking the mould]

Written by Fabian Cotter

Last Updated: 28 September 2022

Published: 29 September 2022