How does Equity-One differentiate its private lending services from competitors in the market?
Over time Equity-One has built longstanding professional relationships with investors, brokers, and clients. Our staff take the time to understand each client’s situation to come up with the best tailored solution and ensure the process is as smooth as possible. We pride ourselves on our swift response when new scenarios are introduced with decisions being made by a highly experienced team. These factors have contributed to building trust in our expertise, which lenders and brokers appreciate.
Can you walk us through the typical process a client goes through when seeking a private lending solution with Equity-One?
The process typically starts with a broker or borrower contacting the office with a scenario. After correspondence is made, the credit team assesses and prices the new scenario. If the client is happy with the figures put forth, we ask for a lender application to be filled out and sent to us, which the credit team uses to prepare a letter of offer. The letter of offer confirms the loan has been approved and is sent to the client for review.
What types of properties or projects are most suitable for private lending through Equity-One? Are there specific criteria you look for?
We are quite diverse in the properties and projects we approve. We typically lend against residential, commercial, and vacant land and occasionally industrial properties, too, including both first and second mortgages. These properties vary in location from inner-city apartments to interstate rural vacant land.
Could you share a success story or case study where Equity-One’s private lending solution made a significant impact for a client?
Equity-One assisted a borrower who was referred to us directly. The borrower is a builder with an established business and was hit with an unexpected, large tax business-related debt, coming out the other side of COVID-19. They thought their only option was to fund this themselves via the sale of their principal place of residence and using equity in this property, until they talked to us. Equity-One workshopped the transaction with the borrower and was able to arrange funding to repay their existing business debts, repay the outstanding ATO debt, and a small amount of working capital. With the ATO now sorted, they can focus on continuing to manage and grow their construction business.
How does Equity-One determine the interest rates and terms for private lending solutions? Are they flexible based on individual circumstances?
Generally, a standard rate applies across our loan products, but each application is considered on a case-by-case basis as we understand circumstances are varied. Our goal is to deliver a solution that will provide the best possible outcome. By understanding our client's situation and needs, we're able to achieve this.
Are there specific industries or sectors where Equity-One has seen increased demand for private lending solutions recently?
There has been an increase in farm-zone land banking in regional/rural areas. We have participated in some transactions like these, but they generally are not the mainstay of what we do. Interestingly, in interest rate cycles such as the one we are experiencing now, as the major banks tighten their lending criteria, we see an increase of bank-worthy candidates seeking an alternative to their traditional bank. It is not uncommon for a high-quality borrower with a high-quality asset to seek out lending alternatives in these times.
What kind of client profile does Equity-One usually work with for private lending? Are there specific qualifications or requirements?
We specialise in helping borrowers who are bank-quality but not bank-ready. As mentioned above, most borrowers have excellent relationships with their banks and have transacted on an asset fully expecting their bank to participate, but as settlement looms closer, they realise they need a second string in their bow. That’s where we come in. Our loans are designed to fix a short-term problem without the short-term pricing. All our loans can be repaid anytime with no break costs, too, so it is an ideal backup plan.
Could you elaborate on any partnerships or collaborations Equity-One has established to enhance its private lending offerings?
All our business is from word of mouth, which we cherish and value very much. We just focus on good outcomes and the rest takes care of itself.
What are some common misconceptions clients might have about private lending and how does Equity-One address these?
Some misconceptions, unfortunately, are not entirely unfounded. There are private lenders that can be abrasive in the way they deal with their clients and their pricing and unfair terms reflect this. We see numerous private lenders that we simply would not want a borrower to go anywhere near them, but unfortunately, they exist and they do cause damage to the sector. There are, however, other non-bank/private lenders that do a great job and serve a real gap in the marketplace, by offering loans with terms and pricing that really assist borrowers. It is very important to find the good ones and avoid the “prickly” ones.
How does Equity-One ensure compliance with relevant regulations and guidelines when providing private lending services?
Equity-One adheres to relevant and necessary compliance guidelines that are overseen by the compliance officer at each stage of the loan process. The compliance regulations are regularly reviewed and our processes are updated to ensure we are keeping up to date with legislation and ASIC.
