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Dominic Lambrinos, head of financial structuring of all major transactions at Chifley Securities, speaks to The Adviser about the lender’s key point of difference in the commercial lending space.
Tell us about Chifley Securities and its involvement in the commercial lending space.
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Chifley Securities works towards being a premier place to go for commercial lending in the property sector. In particular, it specialises in the non-bank space and is commonly categorised as a third-tier lender.
The company procures funds from very high net worth individuals and matches appropriate property transactions to these funds. It has six different investors providing some $700 million in available funding.
Chifley excels in the type of property loans where the banks say 'no' – borrowers still can have somewhere to go – and we have settled loans from $2 million to $37 million.
In addition to Chifley Securities, EasyBiz Finance, its sister company, also works in the commercial lending space, but instead of working in the property sector, it specialises in business loans like equipment leases and business working capital like debtors factoring, trade finance and unsecured business loans. EasyBiz Finance works in the more traditional broker space.
What benefits has Chifley seen since becoming involved in commercial lending?
It has benefited by being drawn along with the property boom in Sydney. By being involved in the private funding sector, Chifley Securities has been able to work closely with borrowers and investors, allowing it to complete more transactions than would otherwise be possible. We have assisted many brokers to develop new commercial finance skills through our standard forms and FBAA-approved courses.
What is Chifley doing to help brokers write commercial loans?
Commercial property loans are generally large sums and require a business approach in preparing a submission tailored to the borrower’s individual circumstances. It's hard to standardise such a loan in one set of forms as may be the case in PAYG residential loans.
Business loans can also be difficult because brokers need an understanding of how to read balance sheets, and profit and loss accounts.
Chifley Securities has recognised these discrepancies in the market place and has developed a commercial property course as well as a ‘how to understand financial statements’ course. Both courses run for one day and are approved by the FBAA.
For brokers looking to make the move into commercial lending, what should be their first steps?
The first steps are twofold, as in most businesses. The first way forward is to develop a funding channel that can assist with funding transactions. No lender can do every loan so it’s important to develop a wide supply chain. It is these types of organisations that can help with developing, training and assistance, and this includes the FBAA.
The ‘other’ first way forward is to put oneself in the market place as a commercial finance broker and advising existing contacts, using social media (don’t forget the power of LinkedIn) and direct marketing to businesses including accountants, solicitors and receivers.
