Non-bank lender GAP Business Loans has announced a rate cut, marking its second one for the year.
The rate cut of one percentage point followed the lender’s recent announcement that it had secured lower-cost funding from its wholesale and institutional investors. Its benchmark interest rate is now at 9.95% after previously being cut to 10.50% in January from 10.95% in the previous year.
GAP Business Loans director Peter Arnold spoke of the lender’s desire to provide more competitive lending options to its brokers when it comes to interest rates and LVRs.
“Over the past three to four months, we’ve been working with our investors to reduce rates and to offer better lending options for SME,” said Arnold.
“While LVR plays a big factor in the credit process, rates are also front of mind. Our aim is to be one of the most competitive non-bank lenders in the market, and that requires a combination of rate, LVR and surety of settlement.”
Arnold also pointed out that the lender needed to have different approaches when it came to both rate and fees regarding the type of loans that it was targeting in order to differentiate itself from its competitors.
The lender currently offers loan terms that range from six to 36 months. It charges a fixed establishment fee of 1.5% for Category 1 loans and 1.65% for Category 2 loans. It guarantees that it has no fees for lines, early-payout, and exits.
Arnold said that the lender made moves to structure its lending operations in a way that would help brokers write more business.
“To make life simple for brokers and their clients, we have clear, specific loan guidelines. Providing a borrower has a good credit history and the loan meets our lending criteria, we will prioritise the application to ensure a seamless approval and settlement process,” he said.
He added that what matters is allowing brokers to have a positive business that would urge them to repeat their transactions with the lender.
