A non-bank commercial mortgage provider has collaborated with Costa Asset Management in a proof of concept to employ investment capital for loans to SMEs via a proprietary loan management platform.
Semper Capital manages commercial mortgage risk and applies risk-management and credit assessment tools developed over a decade in the non-bank space. Together, Costa and Semper will work on expanding the non-bank lender’s range of SME products.
Commenting on the new partnership, Costa Asset Management chairman Robert Costa said the group will be looking to leverage technology to provide sharper rates and better client engagement.
“The non-bank finance space in Australia in one area where technology can be used to create pricing benefits and improve investor participation,” he said.
“Property is something in which Costa has a great deal of experience and in our operations we have employed technology wherever possible to create price advantages.”
Semper Capital director Andrew Way said there is room in Australia to improve funding opportunities that offer direct investment in well-managed portfolios.
However, the challenge with organic growth is going from low volume–high cost to a high volume–low cost funding structure, he said.
“With an expansion of Costa funding and further development of our systems we expect to arrive at products the banks will eventually find competitive,” he said.
“Initial lending will be restricted to areas where alternate funding is difficult to secure and where a sympathetic approach to client management is required.
“The Costa Brand is something people have come to trust.”
Mr Way said the lender’s first task will be to employ Costa funds in sectors where that trust is lacking where the non-bank can complete on price.
“All the while we will be preparing a wider range of products to support SMEs to expand competition on rate for risk basis with all lenders,” he said.