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If you need a loan for business or personal reasons, many people’s first choice will be to go to their local bank, but this isn’t the only way. Sometimes, there are other options that can actually offer a greater level of flexibility.
Non-bank lenders in Sydney, Melbourne and across the country are making waves as a safe, fast and effective way for many Australians to get the personal or commercial loans they need. But when is it the right time to explore the services of these private lenders, and when should you stick with the big banks?
We’ve created this blog to detail what you’ll need to know.
What is a Non-Bank Lender?
There are non-bank lenders operating in Melbourne, Sydney, and most major cities across the country. Although they also approve both personal and commercial loans, non-bank lenders are distinctly different from banks in that they do not accept deposits (they are not Authorised Deposit-taking Institutions, or ADIs). Instead, they finance their loans through private means and make their profits when they lend out these funds.
However, it’s also important to note that modern non-bank lenders are just as safe to borrow from as a big bank, and they must comply with a number of industry legal rules and regulations. These include the Australian Consumer Law, National Consumer Credit Protection laws, ASIC laws, and other relevant rules around privacy as well.
An accredited non-bank lender found through a business loan broker in Australia like Hodgestone Finance, with a history of positive achievements (as shown through our 98% loan approval success rate), can be a smart choice for anyone having issues with their regular bank in getting the loan they need.
Find the right non-bank lender for your business needs through Hodgestone Finance, the trusted commercial loan broker for Sydney, Melbourne, and Brisbane companies.
The Benefits of Engaging With a Non-Bank Lender
Engaging the services of a non-bank lender can open the door to a range of benefits. Here are the most notable:
Flexibility for Clients with Credit Issues
Credit-related issues are a common roadblock to loan approval. Fortunately, non-bank lenders can be a viable option in these circumstances. If you have problems with your credit, for example, it naturally makes acquiring a loan quite difficult, as your bank may not want to risk loaning you money they may not get back.
You could have bad credit if you have unpaid defaults, a history of late repayments, or credit card defaults. While this will usually lock you out of getting a loan from your bank, non-bank lenders have a little more flexibility here and may still be able to assist you, as long as you are truthful about your situation and have proof that you are actively working towards bettering your credit score.
In fact, working with a non-bank lender and successfully paying off your loan is actually a smart way to help improve your credit score.
Less Documentation is Required
A lack of proper documentation is another common hurdle many Australians face. Even if you’ve been a loyal client for many years, the bank may not grant approval without clear evidence of tax returns, financial statements, and other proof of income documents that generally make you a safe choice for a large loan.
While non-bank lenders still require certain documents, you won’t need to provide nearly as mich if you were trying to get a loan from a big bank instead. Turning to non-bank lenders is also a viable pathway if your current financials don’t accurately reflect the current state of the business. Old financials have the ability to make your situation look worse than it actually is, as well as disincentivise the banks from loaning to you.
Here at Hodgestone Finance, we regularly assist self-employed sole traders, investors, and anyone without regular PAYG income with finding the best low-doc commercial loans that are designed and personalised for their individual needs. All you’ll need to do is provide us with an up-to-date Business Activity Statement, a letter from your accountant or a signed declaration of income, as well as an ABN and Goods and Services Tax (GST) registration.
Please read our blog, ‘What Documents Do You Need for a Low Doc Commercial Loan?’, for more detailed information on what is required.
Get Your Loan Approved Quickly and Capitalise on Opportunity
Because they are large, busy and thriving institutions, anyone who has worked with a big bank knows that they can be slow to get things going. While taking their time for something like a traditional home loan isn’t a bad thing (as frustrating as it can be), if you need money quickly, a non-bank lender might be the better choice.
The smaller size of non-bank lenders allows them to work quicker and smarter, securing your loan in a matter of days or weeks, not months. This can be extremely important for businesses looking to grow or strengthen quickly through the purchase of an asset that has suddenly become available, but won’t remain on the market for long.
This could be land, property, or even machinery–a fast, safe loan secured through a business loan broker in Australia like Hodgestone Finance will allow you to purchase what you need exactly when you need to.
Specialised Services
Many non-bank lenders will specialise in certain areas of lending, allowing customers to find and work with experienced and knowledgeable professionals who are experts at getting customers the perfect loan for their needs.
At Hodgestone Finance, we can assist our clients in finding the right loan for their needs, whether it’s for business, residential, or personal reasons. By taking into account your borrowing history, current situation, and future goals, we can make sure you end up with a loan that is primed to ensure your success.
Better Rates
Non-bank lenders are often working with large margins because they borrow their funds at wholesale prices, allowing them to offer their clients very competitive rates. They can also offer you a lower standard rate because, unlike a bank, they operate with less overheads that could affect their expenses.
At Hodgestone Finance, we’ve made it easy to see our current full doc and low doc rates online. Simply click on our Commercial Loans or Home Loans pages for up-to-date rates and loan-to-value ratios (LVRs), or get in touch with us at info@hodgestonefinance.com.au to find out more information about our rates.
Looking for a trustworthy commercial mortgage broker in Australia? Connect with Hodgestone Finance now to see why so many recommend us for all their non-bank lending.
When to Approach a Big Bank for Your Loan
It is important to note that, while non-bank lenders are a secure and reliable choice for many different types of loans, there are still occasions where you may find you are better off sticking with the big banks.
These can include:
- You want all your financial products housed under one roof, and you love the convenience of working with a bank you know.
- You want a lender that isn’t as exposed to market fluctuations.
If doing all your financials with the same institution is important to you, and you have a good credit score, a history of financial security and aren’t in any rush for a loan, then there’s no reason not to go with a big bank. However, we still encourage you to get in touch with Hodgestone Finance to see if we can help connect you with private lenders in Sydney, Melbourne, Brisbane, or elsewhere in the country who can offer you a better rate.
FAQs About Non-Bank Lenders
Will borrowing from a non-bank lender affect my credit score?
Like any loan, the effect of borrowing from a non-bank lender on your credit score will depend on how you manage your repayments. Borrowing a realistic amount and making timely repayments will assist you in maintaining a healthy credit score.
Is it safe to borrow from a non-bank lender?
The larger size of big banks gives them an air of security that many appreciate, but in reality, non-bank lenders are just as regulated by the ASIC, and all of them still need to stick to responsible lending laws.
Will my credit score impact my loan approval with a non-bank lender?
Non-bank lenders will usually have more relaxed lending criteria, but they will still look at your credit score when assessing your eligibility for a loan. Non-bank lenders tend to focus more on business revenue and cash flow when determining if you’ll be able to get a loan.
Partner with Hodgestone Finance and Connect with the Perfect Non-Bank Lender in Australia for Your Needs
As experienced commercial mortgage brokers in Australia backed by over 20 years of property finance experience, Hodgestone Finance is ready to help you find the ideal loan for your situation. With a network of over 30 non-bank lenders and private financiers available at our fingertips, we have secured over 500 loans for our clients, with 150 customers helped–and counting!
Get a free quote now, or call our head office on 1300 463 439 to speak with an expert about how we can help you secure the right type of loan, no matter where in the country you’re located.
We find you the suitable loan that works for you.
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