Education: Why are more borrowers choosing non-bank lenders?

Why are non-bank lenders so popular?

The withdrawal of traditional lenders post the GFC, coupled with tighter lending standards for banks, meant some real estate borrowers were left short. Seeing an opportunity to fill the gap, non-bank mortgage providers emerged and have been growing in popularity ever since.


Same, same but different

Private/non-bank lenders are like banks in that they’re both financial institutions that provide loans. But that’s about where the similarities end. Non-bank lenders aren’t ‘authorised deposit-taking institutions’ (ADIs), so they can’t take deposits from their customers. Instead, they must rely on other ways to source funds, which means offering loans to investors.

But banks offer loans, too. So, how do non-bank lenders win business in such a competitive market?


The rise of the non-bank lender

Different regulations govern banks and non-bank lenders, and this is a point of difference that the non-bank lenders take full advantage of. With fewer restrictions, they can be more flexible with the types of scenarios they fund.

Private non-bank lending is focused on providing fast and flexible funding solutions. Nick Raphaely, Co-Founder, AltX

The typical non-bank loan borrower is looking to jump through fewer hoops and close out their application faster than what banks can offer. This is where the non-bank lender really steps up.

  1. Speed Borrowers need fast access to funds so they can take advantage of an opportunity as it arises. Non-bank lenders can provide loans quicker and with more flexibly than traditional banks.
  2. Flexibility: Borrowers can customise the loan to their requirements based on the purpose of the loan and underlying real estate asset.
  3. Access the decision makers: Private /non-bank mortgage lenders are smaller and more nimble than large banks. Borrowers generally deal directly with management who are the key decision-makers on funding.
  4. Simple paperwork: The paperwork is much simpler than applying for a traditional bank loan.
  5. Assessment criteria: Non-banks have different methods for evaluating customers and are more flexible with who they will lend to, including those who may have a less-than-ideal credit history.


Is private real estate debt right for you?

If you’re a wholesale investor looking for a consistent, attractive yield, AltX’s platform lets you access quality, curated and fully vetted 1st mortgage investment opportunities. To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit


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Phone: 1300 991 380


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