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The Adviser speaks to Interim Finance director Andrew Littleford about short-term lending and the non-bank sector
Q1. What opportunities are there in short-term lending?
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Opportunities expose themselves in many ways and forms. To name a few: the purchase of an established business or the creation of new business, well-timed
purchases of inventory and stock or the purchase of, and funding for commercial property and their fit-outs. Equally as important as capitalising on business opportunities as they arise is the ability to quickly access working capital. There’s a direct and immediate opportunity for brokers to diversify into this lucrative sector.
Q2. Can funding play a role in the sector’s overall competitiveness?
Not really. Funding is more of a semantic versus a point of di fference. The more pertinent advantage of the non-bank sector is the ability to provide relevant, customised and competitive products – efficiently.
Q3. Will APRA’s investment curbs give the non-bank sector a boost?
Historically it has been the case that when macroprudential tools are imposed on the market, the same volume of loans shifts to an alternative financial intermediary that isn’t bound by these controls. There has been much speculation that with the introduction of larger deposit requirements, reduced discounts in interest rates and higher levels of serviceability the non-bank sector would find itself in receipt of a greater number of investor loans. While we are sure to see a surge in non-bank investor loans, to what extent is difficult to judge.
Q4. Interim Finance is a short-term lender. What does this typically involve?
This typically involves providing working capital loans to a wide range of businesses – from small-scale ventures in their initial set-up stages to established operations
focused on expansion. The company is known for its competitive and flexible caveat loans and second mortgages, and is experiencing increasing demand for
bridging finance and short-term first mortgages.
Q5. Rather than lenders of last resort, how should the non-bank sector be considered?
Non-banks should be considered as a provider of flexible, purpose-specific loans designed to meet the needs of a variety of market segments that don’t meet the lending criteria of traditional lenders.
