Non-banks urged to service ‘unmet demand’ for debt funding

According to Australian private finance and investment house Wingate, unmet demand for corporate debt funding has given rise to new opportunities for non-bank lenders.

Kevin Wunsh, managing director of Wingate Corporate Investments, said that a shift in the banking landscape has created “significant opportunities” for non-banks to deliver debt capital solutions to Australian mid-size companies.

“Australian businesses face a significant void when searching for credit to grow and expand,” he said.

“Traditional banks have changed their approach and seemingly reduced lending and rationed credit following the Hayne royal commission and changes to the regulatory environment.

“At Wingate, we believe this opens up a significant opportunity to support Australian businesses and create further diversification for our investors.”

Mr Wunsh noted the complexities associated with the provision of debt funding.

“Mid-size companies are significantly underserviced when it comes to seeking capital. Financing opportunities are typically too large or complex for many alternative non-bank financiers or large family offices, and too small to attract interest from the banks or global debt providers,” he added.

Wingate’s call comes amid continued work to improve access to finance for Australian businesses, which included the establishment of the Australian Business Securitisation Fund (ABSF).   

The ABSF was set up to provide additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms.

The government is currently assessing proposals from stakeholders that have expressed interest in investing in the fund.

 [Related: Bill to establish $2bn finance fund enters Parliament]