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A new product has been released that is said to help brokers address an “underserved market” by giving “Australia’s small businesses access to funding at a reasonable cost”.
Non-conforming lender Bluestone Mortgages has announced the release of its latest offering to brokers, which allows them to offer their clients a line of credit option with the standard variable rate product, a split loan and redraw capability.
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According to Bluestone, the new offering represents a “uniquely flexible combination”, as there is a code-compliant product for self-employed and PAYG borrowers, up to 85 per cent LVR, with levels of credit impairment allowable.
Borrowers can also pre-pay a major proportion of their loan and redraw this amount any time in the future.
According to the lender, the redraw and line of credit are “extremely important” for self-employed borrowers as it allows them to “credit surplus funds to their mortgage and utilise those funds when and where necessary”.
Bluestone noted that rising house prices were prompting many small business owners to expand as a result of the equity in their homes, but that access to that credit could “be difficult for many, regardless of any housing collateral they may already have”.
It added that the product was released following research from the Australian Bureau of Statistics and the Australian Centre for Financial Studies, which found that as small and medium-sized enterprises (SMEs) make up 97 per cent of all Australian businesses and provide more than 68 per cent of all industry employment, restricting the flow of funds to the SME sector could have a “negative effect" on the economy.
Royden D’Vaz, head of sales and marketing at Bluestone, commented, “We’re focusing our efforts on providing brokers with products and features designed to assist and benefit more customers and especially this underserviced part of the market.
“We understand the challenges that brokers and their self-employed clients face when trying to obtain a mortgage that will ultimately help to fund their business.
“We want to give more of Australia’s small businesses access to funding at a reasonable cost, so we are developing a suite of lending solutions specifically targeted to this market by giving them a helping hand when others won’t.”
[Related: Brokers ‘need to look at specialist lending’]
