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Chifley Securities has established a new business that aims to fill a gap the banks are “not interested” in targeting.
Commencing with a soft launch in March this year and $150 million in funding, the non-bank lender created a new business that provides finance for property developments following strong demand from clients.
“During the calendar year ending 31 December 2015, Chifley Securities received 326 applications for finance, and approximately 30 per cent of those involved some form of property development type finance,” Chifley principal Dominic Lambrinos told Mortgage Business.
“We commenced this business with the intention of specialising in loans where the first and second tier banks were not interested in participating in – in particular, loans where the development did not have sufficient pre-sale criteria met or there was insufficient equity in the project to meet the banks’ requirements.
“Since developing financial products which concentrate in the above two areas, there has been a marked increase in interest in our product arising from the banks’ unwillingness to enter into some development projects.”
“In one week, we received 27 applications totalling over $350 million, which we believe to be directly related to the banks tightening their lending criteria in this segment.”
Chifley has funded three development projects since March 2015, all of which were in the Sydney basin, and has an additional five projects in progress, ranging from $7.3 million to $27 million.
Mr Lambrinos added that the lender has a detailed list of requirements for the types of projects it takes on.
“A major precept is that the site is required to be in the major metropolitan city on the east coast of Australia,” he said.
“Furthermore, Chifley looks at the sponsor to ensure they not only have the experience, but also the financial backing to take on a construction loan that the project actually requires.”