Australia’s mainstream banks are so busy deferring existing loans that they have very little capacity to write new ones.
As of the 8th of May, the banks had deferred more than 643,000 loans due to the COVID-19 pandemic, according to the Australian Banking Association.
That included about 392,000 home loans.
Capital adequacy rules require the banks to maintain a certain percentage of cash on hand relative to the amount of loans they give out.
Because the banks have allowed existing borrowers to defer repayments for up to six months, they’re currently recouping less money – meaning they have less money to distribute to new borrowers.
That’s great if you’re an existing borrower, but not if you’re a new borrower or a broker.
Brokers are getting deals over the line
Thankfully, there’s a solution.
Credit Connect Group (CCG) is still helping brokers get finance for their clients.
CCG is either finding these loans from its own reserves or sourcing funding from its network of investors.
As a result, brokers who have been rejected by banks are getting residential and commercial deals over the line.
