Pagoda Finance director Danny Luu knows the problems that investor and developer clients face when seeking finance. With a broking business that is primarily focused on international and local developers, he’s seen just how volatile the market can be.
“Two years ago a lot of the banks were still finding their feet when it came to doing business with overseas developers,” Luu says. “As it turned out, a lot of them went in quite hard, but in the last three months they’ve also pulled out pretty hard as well.”
That’s where Luu says non-bank finance group Chifley Securities is stepping in. With a total pool of $1.1 billion in capital available for commercial property finance, Luu has been able to use Chifley Securities when he needed a finance approval fast.
“I was first referred to Chifley Securities about 18 months ago when timing was critical, and they were able to do a deal for my client really quickly,” Luu says. “With the banks at the time, a best case scenario would be six weeks - or it could even be three months.”
Luu says Chifley Securities has a record of “nutting out a solution” for his clients over the phone within a day, which he says is increasingly setting them apart from mainstream lenders and putting them at the top of the list for time sensitive developer clients.
“Timing is very important. A lot of clients want an answer immediately if they come to you for some debt. In many cases, there’s just no use waiting around for three weeks or so before the banks even let you know they are interested in the deal,” Luu says.
Decorp Finance principal Daniel Cooney has had similar past experiences with Chifley Securities. In his first deal with the lender, a large NSW construction company needed help restructuring its finance facilities, and a deal was done within a week.
“My client was having some legal issues with a major bank and wanted to segregate a large residential asset worth $10 million by pulling it out of the mix,” he says. “Chifley Securities were the only ones who could do it because of the nature of the deal.”
Cooney has become a specialist in large property development deals that fall outside banking criteria, after a career as a relationship manager at ANZ
. He says Chifley Securities keeps clients happy by making informed decisions quickly.
“A lot of funders in the market - even if they are private lenders operating outside the mainstream banking space – can still have a cumbersome credit and due diligence process with a number of different layers to negotiate,” he says. “But if there’s a good deal that has legs, Chifley Securities can basically make a decision on the spot.”
Cooney recently joined Chifley Securities to head up Chifley Partnership, an additional service that expands the lender’s ability to find a perfect fit for any developer deal.
“Chifley Securities has the capital and expertise to handle the majority of deals, but there are always some that fall out the bottom, either because of their size, location or style. Through Chifley Partnership, we work together closely with the broker and client to find them a funding partner that is a better fit for that particular deal,” he says.
What brokers want
Since launching Chifley Property Development, Chifley Securities has allocated $300 million to finance construction in a number of Sydney and Melbourne projects, with the lender’s broker partners paid 1% commission upon settlement.
Director Joe Morello says Chifley Securities has responded to strong market demand for commercial property finance and tighter mainstream lending criteria by offering broker clients an alternative finance option that is much faster, and much more flexible.
“Broker feedback is telling us we have a lot to offer experienced investor and developer clients,” Morello says. “As it gets harder to place good deals, brokers are seeing Chifley Securities as a partner that can understand their deal, and seize the opportunity faster.”
Danny Luu says tighter mainstream lending criteria will not stop overseas developers from coming to Australia. When Chifley Securities’ product offering and turnaround times are added together, Luu says the offering is a very strong one for clients.
“I think Chifley Securities are in a good space at the moment. They are doing a lot of stuff that the banks aren’t doing. With the product they have on board now, they are really taking over a lot of the banks’ business in the current market,” he says.
Chifley Securities is a non-bank commercial lender who accesses private loans from high net worth investors to promote and build commercial property investment in Australia.
Chifley aims to empower investors with new and unique opportunities, and empower brokers with access to private commercial funds.