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By: Jessica Darnbrough
Future Financial is gearing up to take on the majors by making its suite of business and investment loans more competitive.
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The non-bank lender said it is ready to do battle on the business front with loans for business and investment purposes starting from 6.29 per cent.
Moreover, the products will come with a loan to value ratio (LVR) of up to 95 per cent.
The company’s director Josh Norris said Future Financial’s new competitive attitude signaled the end of big four dominance.
“During the GFC the big four were able to increase net interest margin revenue by 21 per cent or almost $7 billion,” Mr Norris said.
“Small businesses were hit hard, suffering from higher rates and a big increase in business lending margins.
“But despite this money grab, the banks eyes were too big for their balance sheets, and they are now struggling to rein in their capital adequacy ratio before the Australian Prudential Regulation Authority forces their hand. All the banks have tightened up on lending to Australian business and also to consumers and now we are aiming to step in and provide a viable alternative to the majors.”
Future Financial is not the only non-bank lender to do battle with the majors.
Last month, Collins Securities launched a 95 per cent LVR, non-genuine savings product that is aimed directly at the investor market.
The company's general manager Allan Willoughby said the non-bank lenders were beginning to see a void forming in the investor market as the majors progressively reduce their LVRs.
"Our new 95 per cent LVR Investor package also fills a void left by the departure of the major banks from this space," he said.
