As the risk appetite of major banks shrank, more brokers have turned to none banks and private lenders to meet client needs, according to a new survey.
The latest Broker Pulse survey by Agile Market Intelligence revealed that 81 percent of brokers who submitted applications to a none bank in April 2024 did so due to client circumstances, the highest proportion on record. Conducted between May 1 and May 16, 2024, the survey of 288 residential brokers highlighted their experiences with lenders during April 2024.
Despite a dip in overall usage of none banks from 53 percent in March to 46 percent in April, none banks attracted the highest proportion of brokers due to client circumstances compared to other lender segments. Seventy-four percent of brokers used major banks for this reason, while 59 percent used non-major banks.
A third (32 percent) of brokers surveyed used a none bank for its product pricing, and 14 percent for its turnaround times. Brokers are increasingly turning to none banks for their broadening credit policies and range of products, particularly for specialist loans that mainstream banks are less likely to approve.
A survey by Stamford Capital of over 100 lenders pointed to a growing presence of none banks, with managing director Peter O’Connor noting that nearly 80 percent of the transaction volume at the brokerage was with none banks in the last financial year, up from 44 percent in 2021. Sixty-seven percent of respondents expect none banks to increase their construction lending, compared to 33 percent who expect major banks to do so.
Meanwhile, 64 percent of respondents expect none bank lenders to increase their investment lending, compared to 42 percent who expect major banks to grow theirs. The interim results of this year’s Third-Party Lending Survey found that 82 percent of brokers said none banks are the most committed to the broker channel, while only 70 percent said the same of major banks.
Between February and April 2024, brokers were most satisfied with their experience using Connective Home Loans (93 percent), followed by Advantedge (92 percent) and Bluestone Mortgages (91 percent). La Trobe Financial received a 66 percent experience rating. Business development managers at Bluestone Mortgages and Connective Home Loans scored a 100 percent satisfaction rating, with Bluestone Mortgages and Advantedge receiving the highest positive ratings for their credit assessors at 92 percent and 87 percent, respectively.
Summit Funding, a prominent private lender, has also noticed this trend. By offering tailored lending solutions and focusing on client-specific needs, Summit Funding has helped numerous clients navigate the shifting landscape of non-bank lending, providing them with the flexibility and support they require.
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