Private group Chifley Securities has entered the non-bank finance lending field, aimed at the commercial property market, with an initial lending pool of $480 million.
Backed by Dominic Lambrinos and the principals of Nationwide Capital, Domenic and Joe Morello, the new company will offer loans to investors in commercial property from $2 million to $30 million.
The founders say it will be a similar service to that offered to residential investors by Aussie Home Loans.
Mr Lambrinos, who has about 32 years of experience in finance and is the owner of EasyBiz Finance, said Chifley would offer attractive commissions to brokers who brought deals, while financing costs would range from 8.5 per cent to 12 per cent a year.
Usually the loans would be for a year, but could be extended, he said.
“Unfortunately the major banks are proving to be too difficult to work with, as their lending covenants and red tape are holding back the commercial property sector in Australia.
“Our investors are all high net worth individuals, who have each put in $50 million, so they know the value of money and are willing to lend to people, where the mainstream banks won’t.”
Most of the lenders were Australian, with a smaller percentage from the United States, Europe and Asia, he said.
Joe Morello said property developers and investors were aware of the tough terms imposed by the main banks since the global financial crisis and they were seeking alternatives to the traditional funding route.”
Chifley Securities had developed a simplified, single-application process for financing commercial property loans using its pool of investors, he said.
Mr Lambrinos said the market for private lending was fragmented and not regulated under any specific banking code.
But there were suggestions the Australian Securities and Investment Commission might review the need to introduce some guidelines, he said.
“In commercial property, there are times when an investor needs a loan quickly to settle the deal. We can do our own valuation and assessment and have the cash available within 24 hours.”
November 25, 2014
Commercial Property Editor,
The Sydney Morning Herald