Specialist lender NWC Finance is seeing a record demand by brokers whose clients are suffering from cash-flow issues or struggling to refinance.
The firm has seen a 30% rise in revenue over the past year with demand increasing off the back of tighter lending restrictions by the banks.
“There has been a surge in calls this year from brokers and accountants whose clients’ finance has fallen over literally hours before settlement of purchases or expiration of finance facilities, slow or lack of payment by debtors or an urgent need for new capital,” Joe Morello, director of NWC Finance.
“We are finding this is happening more often as the banks are pulling their funding for deals, often too late for clients or arrange alternative finance from top and second tier banks.”
New controls by the Australian Prudential Regulation Authority
(APRA) on capital adequacy and high risk loans mean banks are becoming increasingly strict on providing finance, he added.
“I think the banks are deeming very good loans as too risky. They’re just not lending at the moment. We manage [our risk] through our valuations. We check out the properties, check out the values. It’s a great market because there are a lot of private funders out there who can refinance if required,” Morello told Australian Broker.
NWC Finance offers short-term finance of up to $20m on first and second mortgages. These funds can be used for a range of matters including preventing wind-up notices and general business transactions.
“We expect NWC Finance will be approached by many more accountants, lawyers and finance brokers during 2017 as the banks further tighten their lending practices and businesses struggle with ATO and creditor commitments.”
NWC Finance pays a broker commission of 1.1% upfront with no clawbacks, he added.
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