At Equity-One, brokers work directly with our credit team throughout the entire loan process. Having assessed more than 500 commercial lending opportunities this year, Senior Credit Analysts Yuki Feng and Vivien Wang are often the people on the other end of those conversations. Here, they share three observations that regularly shape the way they assess transactions.

1. The first question isn’t “what’s the security?”

While commercial lending conversations often begin with security, LVR or facility structure, credit assessment usually starts somewhere else.

“One of the first things we try to understand is what the borrower is actually looking to achieve,” says Yuki. “The proposed structure is important, but before we can assess it, we need to understand the purpose of the loan and the commercial objective behind it.”

A loan is often part of a broader property, business or investment strategy. Understanding that context helps credit teams assess the transaction and focus on the considerations most relevant to the deal.

“The headline terms only tell us part of the story,” says Vivien. “The same security type and loan amount can present very different credit considerations depending on why the borrower needs the funds and how the debt is expected to be repaid.”

2. Complexity is expected. Clarity is essential.

Multiple entities, trust structures, layered security positions and time-sensitive settlements are all standard features of commercial transactions. In many cases, they are the reason a borrower is seeking a private lending solution in the first place.

“Complexity on its own is not unusual,” says Yuki. “Many of the transactions we assess involve multiple moving parts. The key is understanding how those pieces fit together and what the borrower is ultimately trying to achieve.”

“We can receive extensive supporting material and borrower documentation but still need to establish the fundamentals,” Vivien explains. “Having that context early tends to be more valuable than perfection.”

For brokers, that means a transaction doesn’t need to be perfectly packaged before the conversation starts. Early discussions can help identify key considerations and provide valuable credit feedback before significant time and effort is invested.

3. All exit strategies must be realistic

Most commercial transactions have an intended exit strategy. Refinancing, asset sales, completed developments and future cash flow are common examples. What matters during assessment is not the label attached to the exit, but whether it is realistic and achievable.

“Every transaction has a proposed repayment strategy, but the key question is whether it stands up to scrutiny,” says Vivien. “A refinance, sale or asset realisation can all be valid repayment pathways. The assessment comes down to whether the assumptions supporting that outcome are reasonable and well understood.”

“One of the most productive discussions we can have is around what needs to occur between settlement and repayment,” adds Yuki. “Understanding that pathway often provides a much clearer picture of how the transaction is expected to perform over its full lifecycle.”

While every transaction is different, one theme remains consistent: the earlier the conversation starts, the easier it becomes to understand the opportunity, work through complexity and assess the most appropriate pathway forward. That’s why Equity-One continues to provide brokers with direct access to its credit team throughout the loan process.

To speak with a member of Equity-One’s credit team please call (03) 9602 3477 or email loans@equity-one.com