Equity-One’s Keep it Simple Approach
- 13 June 2024
Why this trusted non-bank lender is more than just a second option
What does Equity-One help borrowers do?
Equity-One is one of Australia’s most trusted non-bank lenders with 30 years of experience in helping borrowers find a solution when their bank is not being … commercial.
Most borrowers approach their institutional lender with the expectation that their application won’t be too difficult or complicated. To their surprise, however, too often the bank that they may have a long successful relationship with isn’t able to assist.
Equity-One specialises in these scenarios, when a borrower may need an alternative solution, without the “short-term pricing” that often accompanies private/non-bank lending. Equity-One can assist with financing commercial property purchases, refinance or cash out on residual stock, and many other non-code purposes. All of its loans are low doc, so it makes it easy to transact and fix the short-term need when borrowers need an alternative solution.
How easy is it to introduce Equity-One into the client conversation?
The answer is simple: very Easy. Generally, most brokers provide a suite of options to their clients, with a range of pricing and corresponding credit requirements that the borrower must fulfil. It is important to cover off at least one or two non-bank options. Even if these are second choice options, the reality is that in the context when the banks are not able to assist and a settlement deadline is looming, an Equity-One option doesn’t seem like a second option at all. It also helps the clients be prepared for a variety of outcomes and time frames to best make an informed choice on which they would like to proceed. In many instances, brokers may suggest that a loan from a non-bank, like Equity-One, isn’t actually a second choice but rather a better option at the outset because there will be confidence around the settlement timing. The bank may then be the second option as a long-term exit plan.
What is the product lead time to settlement?
We have a saying that keeps recurring: keep it simple. We like to keep things a little old-fashioned. When a broker calls or emails, we like to give fast responses as to whether we can assist or not, with the pricing to follow in that same conversation. Term sheets/quotes are provided on the same day. If a client would like to proceed with an application, letters of offer are also provided on the same day. Mortgage document preparation nowadays is also fast, usually taking one day to issue. To plan ahead, it’s always wise to get the valuation done early in the piece. We can help with that with a simple phone call.
Which clients is it suitable for?
Any SME borrower who is purchasing, refinancing, or needing to tap into the equity of their property for any non-code purpose. While borrowers usually have financials, we can consider various low doc forms of serviceability. This may be bank statements, BAS statements, accountant’s letters, or even projections from the borrower. Alternatively, if the borrower has a clear exit plan (usually a sale) then we hold the interest in our trust account, thereby not requiring the servicing information. This differs from prepayment of interest that some other private lenders do because if the loan is repaid early, then the unused interest is refunded to the borrower.
Do brokers need to upskill or is this a pure referral model?
We are here to help brokers with whatever way they need for the transaction. Some brokers have had a lot of experience with commercial SME non-bank lending, whereas it is a new experience for others. Brokers can lean on us as much as they need to, so we ensure their client gets the best experience from it. We encourage brokers not to hesitate in asking us specifically what they need for their client. Equally, we need to understand what the touchpoints are for them so as to provide the best service. Any new brokers are “onboarded” with us quickly and we are here at the ready for them.
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