Securitised lenders may have been starved of funds since the July US sub-prime collapse but Australia’s private lenders are bringing home the bacon.
Eurofinance general manager Colin Sherry says business is brisk for the boutique finance company as it picks up loans that other lenders struggle to fund.
“Eurofinance is very much on the front foot at the moment as we capitalise on opportunities created by the current market climate,” Sherry told Mortgage Business.
Balance sheet funding and debentures have placed the lender in the enviable position of leaving rates unchanged, with a ready flow of funds at its disposal.
“Around two thirds of our funds are from a bank balance sheet, with the other third raised through debentures.
“We’ve not been affected by the current non-bank bad press, however an increasing number of brokers are now inquiring about how we fund our loans,” he says.
Provident Capital chief operating officer John Fulker agrees that private lenders are currently in a strong position.
“The liquidity crisis stemming from the US credit issues has had a minimal impact on our business,” says Fulker.
According to Fulker, media coverage of the funding crisis created a short-term emotional response from investors, but demand from private and retail investors quickly picked up. And Fulker is confident Provident will prosper in the current market conditions.
“There’s great potential for growth at the moment. Smaller loan portfolios may struggle with funding constraints and new prices, providing private lenders with the opportunity to grow through acquisitions,” he says.