MELBOURNE, AUSTRALIA – 15 July 2020
THE PANDEMIC SEES THE RISE OF PRIVATE LENDING
The traditional banking model is being shaken up by the global pandemic of COVID-19. In a world where credit is becoming tighter, banks are becoming more hesitant to lend money.
The result has left a growing credit gap across Australia that leaves a void to be filled. This is beginning to lead to more niche non-bank financing models appearing, creating a decentralised financial lending system away from the centralised major banks.
An example of innovation within the non-bank finance industry is Australian Property Bonds, a non-bank investment company that facilitates fixed income opportunities for investors providing finance to qualified borrowers.
An Australian Property Bonds representative said: "We are noticing that investors are seeking new ways to earn meaningful income from their money, given interest rates are low. Our service matches private lenders with businesses that can provide first mortgage security over Australian real estate, cutting out the middleman and providing the opportunity for better returns.
"Property as a form of security is going to play an important part in assisting with the recovery of the Australian economy, and investors are now able to benefit by taking the place of the banks."
