Policy updates give brokers greater flexibility, support
Leading non-bank lender Pepper Money has unveiled a series of commercial real estate loan policy changes aimed at giving brokers more flexibility and support.
Effective today (Tuesday, October 31), the changes are designed to offer serviceability solutions, increased loan sizes and LVRs, and diverse security types.
Pepper Money general manager, mortgages and commercial Barry Saoud (pictured above left) said the changes underlined the non-bank’s commitment to its brokers.
“As the financial landscape continues to evolve, these enhancements represent another step forward in enhancing the arsenal of options that brokers can provide, enabling them to deliver more tailored and effective solutions to their clients,” Saoud said.
The commercial real estate policy changes follow Pepper Money’s recent launch of Self-Managed Super Fund (SMSF) loans, designed for SMSFs seeking to purchase or refinance an existing property.
Saoud said Pepper Money’s previous initiatives to support brokers included the removal of clawbacks on commercial property lending, the expansion of funding across Australia (including non-metropolitan and regional areas), the simplified fee structures, and reduced legal charges.
“Now, by expanding and enhancing our commercial credit policies, we’re poised to open up more opportunities for brokers and more customers nationwide,” he said.
He said the latest policy enhancements were initiatives which supported brokers in their pivotal role of helping their commercial clients succeed.
“With more than 20 years of specialist and SME knowledge, dedicated BDMs around Australia and a ‘real-life approach to making deals happen,’ these collective enhancements and changes make Pepper Money the obvious choice for commercial lending,” Saoud said.
Commercial real estate policy enhancements
Pepper Money has a range of prime and near prime commercial property loans including full and alt-doc options for customers needing commercial lending solutions up to $5 million in loan size.
New policy enhancements include more loan options for clients; increased LVRs to 80% across the board; reduced minimum loan size to $100,000.
Expanded security types include
- vacant land accepted as a single security;
- National Disability Insurance Scheme (NDIS);
- student accommodation accepted;
- childcare centres valued ‘as-is’; and
- boarding houses accepted on full/alt Doc options.
Other features include:
- ICR no longer required for servicing;
- annual reviews not required for loans between $1m and $3m unless the LVR is >70% interest only; and
- accountants letters accepted up to $3m.
Clem Kian (pictured above right), director of Parramatta-based brokerage Finselect Group, welcomed the policy enhancements.
“Efficiency and speed are important for our clients, and Pepper Money never falls short on their commitment of certainty and confidence,” Kian said.
“The reduced minimum loan size will assist customers wanting to get into the market, and the expanded new security types such as NDIS and vacant land are brilliant because, not many lenders take them as security.
“These policy changes from Pepper Money are what the market needs, and it’s great to now have additional options on the table to offer our clients.”
Pepper Money policy enhancements in 2023
Saoud said this year Pepper Money had delivered over 15 policy enhancements to provide greater options for brokers and their clients.
They included:
- reduced serviceability buffers (residential and commercial);
- increased flexibility for credit impaired customers (residential);
- the ability to fund metro and non-metro locations (commercial);
- the Near Prime Clear home loan option now considers credit reports with RHI = 1 reporting for unsecured debt (residential);
- single form of income verification required on commercial Prime Alt Doc loan option;
- accountants letter sole reliance allowed up to $2.5m on Near Prime, Near Prime Clear,
- and Specialist (residential); increased defaults threshold from $1,000 to $3,000 on Near Prime and Specialist (residential).
In August, Pepper Money set a new record in asset finance originations over the first half of 2023, which had overtaken its total mortgage originations for the first time.
The non-bank lender has reported total originations of $3.5 billion over the first half year. Asset finance originations reached $1.8bn, while total mortgage originations were $1.7bn.
Do you think by enhancing commercial credit policies, Pepper Money will open up more opportunities for brokers and more customers nationwide? Share your thoughts below
