A non-bank lender has experienced significant growth across a specific band of its business, an influx it partially attributes to the spike in brokers actively focusing on increasing their commercial offerings.
The “record rise” at Semper was seen across commercial transactions above two million dollars, which were up 42% on the quarter before.
The fintech has linked the increase to its provision of consistent rates, extension of its loan terms, and the growing number of brokers who are expanding their suite of services to include commercial offerings.
“The stability of our non-bank warehouse facility has enabled us to maintain products, pricing and LVR exposures, which seem popular in these uncertain times,” explained Andrew Way, Semper founder and director.
“We are confident we will continue to write sizable transactions without concerns of capital short-falls. We’re in a rare position of having a robust warehousing facility through our joint venture with Costa Asset Management.”
The lender reported the growth has largely consisted of complex cross-collateralised property transactions, with property developers and investment opportunists seeking finance to complete in both metro and semi-rural locations.
“The transactions are fairly complex, and borrowers are seeking longer terms, often with an initial period of interest-servicing relief which we have the flexibility to provide,” said Way.
“We’re also writing more blends than stand-alone first or second mortgages. Consequently, our average loan term is moving from seven or eight months to twelve to eighteen and this may be a direct reflection of our rates of interest coming down.”
Way sees the group’s growth over recent months as confirmation disruption can actually drive prosperity.
“We are, of course, sensitive to the broader aspects of COVID-19, but we strongly urge brokers to not assume the pandemic has had a universally negative effect on businesses,” he said.
”We are experiencing the contrary in our niche of the market as we’re consistently lending to ‘opportunity takers.’ Similarly, none of our loans have been COVID-affected.”
The Semper founder’s sentiments were echoed by Nick Harper, commercial broking specialist at Fuzion Capital.
“While it sounds counter-intuitive, at this time, there’s a significant opportunity to write transactions supporting business growth and restructuring,” he explained.
“In particular, it seems some are looking to leverage opportunities to renegotiate with partners that may have a less robust nature in uncertain times. So, we’re seeing an uplift in property secured loans to buy out partners, or to buy other businesses outright.
“We encourage the broader broking community to upskill to commercial lending, or to collaborate with specialists in the area, to expand the markets they serve while the residential market is quiet.”