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Alternative lending is on the rise. And non-bank lender Resimac hopes to fill the void.
"More and more customers are falling outside the traditional lending guidelines, and major banks are more focused on vanilla customers, customers who are stable in their employment and income," Chris Paterson (pictured), general manager of distribution at Resimac, told Australian Broker. "Also, non-banks' credit appetite is broader than those of the major [banks]. Non-banks could support SMSF-based customers, self-employed, customers who have different income streams, customers who are higher risk in terms of credit activity on their credit reports, or inconsistent repayments on their mortgages.
"[Non-bank lending] is still strong lending, in terms of looking for a better option for the customers, and it's still compliant with regulatory requirements and product suitability that suits the customer needs," Paterson said. "However, [non-bank lending] is a potential [option] to generally support customers in getting back on track if they've had some delinquencies."
Increased regulatory scrutiny around lending guidelines and borrower criteria, particularly after the Global Financial Crisis, has caused traditional banks to steadily reduce the number of loans issued, particularly to self-employed, non-residents and individuals with less desirable credit scores. Non-bank lenders and private credit firms have been quick to swoop in, offering their services.
But unlike private credit shops, which often work in commercial finance, offering larger loans, non-banks are governed by the Australian Securities and Investment Commission (ASIC). Non-bank lenders also offer residential home loans.
Some estimates have pegged non-banks' share of the market at around 10%. Meanwhile, many more borrowers are considering non-banks. A 2024 survey by non-bank Brighten Home Loans found that 61% of buyers are thinking about using non-bank lenders in the next five years.
Paterson said the majority of Resimac's book is made up of residential loans. However, the firm also offers asset finance and small- and medium-sized business loans.
"We see more Australians wanting a flexible lifestyle approach," Paterson said. "So starting their own businesses and being self-employed. And we have a high percentage of customers who are self-employed."
Paterson also acknowledged that there are a plethora of options available to borrowers – and by extension brokers – in Australia. That means brokers have to be on point.
"There's a lot of competitors, especially in the non-bank space. I would say that there's more non-banks than there ever have been before, which is good for customers and brokers," Paterson said. “Brokers can help customers choose the best loan that suits their requirements.”
So far in 2025, Paterson said the majority of activity in the residential market has been refinancing, but predicted that with the Reserve Bank of Australia's (RBA) recent decision to cut the official cash rate (OCR), there will likely be more purchase activity as well.
"As the RBA starts to reduce [rates], we'll see increased activity in Sydney and Melbourne, because they're traditionally areas where prices are higher," he said.
"A key point is educating brokers, and we rely on our BDMs to do that," Paterson said. "We rely on consistent communication around credit policy and how that policy can help the broker grow their business so that they're not knocking back customers. And if they do have a customer that's quite complex, they can rely on support of a Resimac BDM, or a non-bank BDM, to really go in and unpack the scenario, look at the mitigants against the application and try to support the broker in the best product type, as opposed to knocking the customer back.
"Because there's so much competition, lenders may ask for different requirements on their products," he said. "So from the outset, if it's a broker who's new to writing those types of products, it could be a bit of back and forth, because the broker is not aware. And that's where the BDM is so important. If the broker spends time with the BDM, getting a full understanding of what the transaction involves and what supporting documents are involved, so that an application can be considered with as little back and forth as possible. That's what we're trying to achieve."
