Commercial lending shows resilience
As more brokers than ever move into commercial, La Trobe Financial is keen to support this trend and help them maximise opportunities as the economy shifts
Cory Bannister
La Trobe Financial
Industry experts
Michelle Bannister
La Trobe Financial
Jeremy Enconniere
La Trobe Financial
Isabella Constantinou
Simplicity Loans & Advisors
Cory Bannister is senior vice president and chief lending officer at
La Trobe Financial. He has a rich understanding of both the loan origination process via the third party channel, as well as the approval and settlement of institutional and retail loans. Bannister’s portfolio management experience extends to the selection and allocation of assets for multiple wholesale mortgage portfolios in excess of $1bn. He has been responsible for the management, review, risk profiling and audit of wholesale asset pools, and has had conduct of the relationships with substantial wholesale and retail investors, with responsibility for overseeing related reporting.
La Trobe Financial
Cory Bannister
Michelle Bannister is head of distribution in La Trobe Financial's Real Estate Credit Division. Based in Melbourne, she is responsible for the national sales team. Bannister was previously a senior client manager for partnerships and before that led La Trobe Financial’s credit department for eight years. With her extensive knowledge and experience of the mortgage industry, she strives to constantly develop business relationships, improve processes and recommend and develop new products, resulting in increased originations and settlements for the La Trobe Financial Group. Bannister's achievements have been recognised with several industry awards over the years.
La Trobe Financial
Michelle Bannister
Jeremy Enconniere is based in Melbourne in La Trobe Financial’s Real Estate Credit Finance Division. As a specialist commercial analyst, he manages major client and broker relationships across Australia, specialising in commercial credit and development finance. He has over seven years’ experience in banking and financial services, including in the mortgage industry across lending, distressed asset management and credit within the non-bank sector. His deep understanding of complex debt structuring helps him achieve the best outcomes for La Trobe Financial’s clients.
La Trobe Financial
Jeremy Enconniere
Jason Arnold has been actively involved in the mortgage origination and broking industry for over 15 years, with experience in structuring funding solutions for both simple and complex property loans. Having built effective relationships with the finance industry's most competitive bank and non-bank loan providers, Arnold is able to source optimal lending solutions for clients’ property acquisition, refinance or development projects. Professionally, he holds both a Bachelor of Commerce degree in International Trade and a Diploma of Finance and Mortgage Broking Management. He is also an MFAA Credit Adviser.
Quattro Finance
Jason Arnold
Isabella Constantinou is one of the few female brokers writing solely commercial lending transactions. She started in the mortgage broking industry in November 2017 and worked as an associate to one of the directors at Simplicity Loans & Advisors for three years before moving to an associate director position in April 2020. Since becoming a broker, Constantinou has settled over $350m in transactions and won a number of accolades, including being the first woman to win MPA’s Top Commercial Broker award in 2022, and receiving recognition as an Excellence Awardee in the Commercial Broker of the Year category at the 2022 Australian Mortgage Awards.
Simplicity Loans & Advisors
Isabella Constantinou
Matthew Johnson,
Simplicity Loans & Advisors
Consumers also seem to have no intention of putting their wallets away; total retail turnover has been on an upward trajectory for most of the last year.
“You've got rates needing to increase to try and stem inflation, but it’s just not having the desired impact on retail trade figures,” said Bannister.
All this suggests that hiking cycles and supply chain problems are mere speed bumps for the economy as demand is unshackled from its COVID fetters.
Andrew Kelly,
Anasta Finance Consulting
Labour shortages have also been causing delays. This is due to shortages not only in the construction sector but also across the loan ecosystem, of staff ranging from valuers to accountants to lenders.
“I'm finding that deals are taking longer to close now than they were 12 months ago,” said Matthew Paterson, commercial broker at Partnership Finance Group.
The pace of rate rises has also made it difficult to service clients’ needs.
How disruption to the supply chain affects funding requirements is another issue brokers need to keep up with. This is affecting almost every industry, from coffee to crossbeams, but is hardly a new issue.
According to Flexport’s Ocean Timeliness Indicator, the time taken for containers to travel across the Transpacific Eastbound (China to the US) route has decreased this year from 110 days in April to 86 days in late September, a significant improvement but longer than typical times of 60 days seen in 2019. Shipping container prices are now also less than half their pandemic nadir but still around four times more expensive than pre-COVID.
Reserve banks around the world are intent on reducing demand, but it seems rate hikes in Australia aren’t having much of an effect on the commercial lending market.
“We haven't seen a shift in demand at all at this stage,” said Cory Bannister, senior vice president and chief lending officer at La Trobe Financial.
The latest national accounts data shows that current savings levels remain just above 2019 levels, while people squirrelled away cash at around four times the normal pace during parts of 2020 and 2021.
In the building sector, as materials get delayed, labour is reallocated, which causes scheduling issues when the materials finally arrive on site.
The cumulative effect of this on multi-unit developments translates into a 15- to 22-month delay to completion in many cases.
“It throws out the whole profitability of the project,” said Bannister. “So now people are starting to put their hands in their pockets a little bit until the pressures come off.”
Companies have moved to accommodate these delays by taking on extra stock.
“There's a lot of small businesses that have adopted leaner structures over the last five years, and they’re now seeing problems where they are having to hold stock for much longer and hold working capital for much longer,” said Isabella Constantinou, associate director at Simplicity Loans & Advisors.
“Australians have got a huge war chest, built up through the COVID period,” said Bannister. “The sum is around $280bn that Australians have got in offset accounts and savings.”
In La Trobe Financial’s book, there is still very little evidence of stress in either its residential or commercial mortgage portfolios.
Reserve Bank data shows that year-on-year growth in commercial lending has topped 10% monthly since May. Likewise, based on the latest data from CreditorWatch, trade receivables, an indicator of business-to-business trade, are growing at the fastest pace since April 2019.
Read on
As one of Australia’s leading credit asset managers specialising in asset management and credit, La Trobe Financial is committed to making a positive impact on its community. With seven decades of proven credit management behind it, La Trobe Financial has funded over $36bn of investment for more than 229,000 customers. Its investors include large global institutions, Australia’s major banks, family offices, fund managers, and 55,000 everyday investors in its award-winning credit fund. La Trobe Financial is driven by one cause – to place “others before self” and make a positive impact by helping people create wealth with specialist and investment solutions.
Find out more
Matthew Johnson
Simplicity Loans & Advisors
Andrew Kelly
Anasta Finance Consulting
Cory Bannister, La Trobe Financial
Starting as a graduate at National Australia Bank in 2003, Matthew Johnson built a career focusing on servicing business and commercial clients’ lending needs before moving into finance broking in 2014. He has originated transactions across a broad array of industries and client types, including large wholesalers, manufacturers, import/exporters, construction projects, professional services firms, commercial investments for wealthy families, and overseas-owned enterprises. He is co-managing director and a founder of the Simplicity Loans Group, which he started up in 2017 to provide commercial lending advice to a mass market. The group now has staff in NSW, Victoria and Queensland.
Simplicity Loans & Advisors
Matthew Johnson
In Partnership with
Share
Matthew Johnson
Simplicity Loans & Advisors
Michelle Bannister
La Trobe Financial
Cory Bannister
La Trobe Financial
Industry experts
Andrew Kelly
Anasta Finance Consulting
Matthew Johnson
Simplicity Loans
& Advisors
Isabella Constantinou
Simplicity Loans & Advisors
Cory Bannister is senior vice president and chief lending officer at La Trobe Financial. He has a rich understanding of both the loan origination process via the third party channel, as well as the approval and settlement of institutional and retail loans. Bannister’s portfolio management experience extends to the selection and allocation of assets for multiple wholesale mortgage portfolios in excess of $1bn. He has been responsible for the management, review, risk profiling and audit of wholesale asset pools, and has had conduct of the relationships with substantial wholesale and retail investors, with responsibility for overseeing related reporting.
La Trobe Financial
Cory Bannister
Michelle Bannister is head of distribution in La Trobe Financial's Real Estate Credit Division. Based in Melbourne, she is responsible for the national sales team. Bannister was previously a senior client manager for partnerships and before that led La Trobe Financial’s credit department for eight years. With her extensive knowledge and experience of the mortgage industry, she strives to constantly develop business relationships, improve processes and recommend and develop new products, resulting in increased originations and settlements for the La Trobe Financial Group. Bannister's achievements have been recognised with several industry awards over the years.
La Trobe Financial
Michelle Bannister
Jeremy Enconniere is based in Melbourne in La Trobe Financial’s Real Estate Credit Finance Division. As a specialist commercial analyst, he manages major client and broker relationships across Australia, specialising in commercial credit and development finance. He has over seven years’ experience in banking and financial services, including in the mortgage industry across lending, distressed asset management and credit within the non-bank sector. His deep understanding of complex debt structuring helps him achieve the best outcomes for La Trobe Financial’s clients.
La Trobe Financial
Jeremy Enconniere
Jason Arnold has been actively involved in the mortgage origination and broking industry for over 15 years, with experience in structuring funding solutions for both simple and complex property loans. Having built effective relationships with the finance industry's most competitive bank and non-bank loan providers, Arnold is able to source optimal lending solutions for clients’ property acquisition, refinance or development projects. Professionally, he holds both a Bachelor of Commerce degree in International Trade and a Diploma of Finance and Mortgage Broking Management. He is also an MFAA Credit Adviser.
Quattro Finance
Jason Arnold
Simplicity Loans & Advisors
Isabella Constantinou
Starting as a graduate at National Australia Bank in 2003, Matthew Johnson built a career focusing on servicing business and commercial clients’ lending needs before moving into finance broking in 2014. He has originated transactions across a broad array of industries and client types, including large wholesalers, manufacturers, import/exporters, construction projects, professional services firms, commercial investments for wealthy families, and overseas-owned enterprises. He is co-managing director and a founder of the Simplicity Loans Group, which he started up in 2017 to provide commercial lending advice to a mass market. The group now has staff in NSW, Victoria and Queensland.
Simplicity Loans & Advisors
Matthew Johnson
Cory Bannister is senior vice president and chief lending officer at La Trobe Financial. He has a rich understanding of both the loan origination process via the third party channel, as well as the approval and settlement of institutional and retail loans. Bannister’s portfolio management experience extends to the selection and allocation of assets for multiple wholesale mortgage portfolios in excess of $1bn. He has been responsible for the management, review, risk profiling and audit of wholesale asset pools, and has had conduct of the relationships with substantial wholesale and retail investors, with responsibility for overseeing related reporting.
La Trobe Financial
Cory Bannister
Michelle Bannister is head of distribution in La Trobe Financial's Real Estate Credit Division. Based in Melbourne, she is responsible for the national sales team. Bannister was previously a senior client manager for partnerships and before that led La Trobe Financial’s credit department for eight years. With her extensive knowledge and experience of the mortgage industry, she strives to constantly develop business relationships, improve processes and recommend and develop new products, resulting in increased originations and settlements for the La Trobe Financial Group. Bannister's achievements have been recognised with several industry awards over the years.
La Trobe Financial
Michelle Bannister
Jeremy Enconniere is based in Melbourne in La Trobe Financial’s Real Estate Credit Finance Division. As a specialist commercial analyst, he manages major client and broker relationships across Australia, specialising in commercial credit and development finance. He has over seven years’ experience in banking and financial services, including in the mortgage industry across lending, distressed asset management and credit within the non-bank sector. His deep understanding of complex debt structuring helps him achieve the best outcomes for La Trobe Financial’s clients.
La Trobe Financial
Jeremy Enconniere
Jason Arnold has been actively involved in the mortgage origination and broking industry for over 15 years, with experience in structuring funding solutions for both simple and complex property loans. Having built effective relationships with the finance industry's most competitive bank and non-bank loan providers, Arnold is able to source optimal lending solutions for clients’ property acquisition, refinance or development projects. Professionally, he holds both a Bachelor of Commerce degree in International Trade and a Diploma of Finance and Mortgage Broking Management. He is also an MFAA Credit Adviser.
Quattro Finance
Jason Arnold
Simplicity Loans & Advisors
Isabella Constantinou
Starting as a graduate at National Australia Bank in 2003, Matthew Johnson built a career focusing on servicing business and commercial clients’ lending needs before moving into finance broking in 2014. He has originated transactions across a broad array of industries and client types, including large wholesalers, manufacturers, import/exporters, construction projects, professional services firms, commercial investments for wealthy families, and overseas-owned enterprises. He is co-managing director and a founder of the Simplicity Loans Group, which he started up in 2017 to provide commercial lending advice to a mass market. The group now has staff in NSW, Victoria and Queensland.
Simplicity Loans & Advisors
Matthew Johnson
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“You can see that there's a long runway ahead of high-quality borrowers that need finance. That’s why we've got such great conviction in the non-bank space”
“We are seeing more clients now probably coming to us that might be in some sort of bind; they've got a problem they're looking to solve”
“There's more sophistication coming through from the borrowers that are actually wanting to try and hold on”
Jason Arnold
Quattro Finance
Matthew Paterson
Partnership Finance Group
Andrew Kelly is sole director of Anasta Finance Consulting. Over 21 years, he has specialised in all forms of business loans, gaining managerial experience at ANZ Bank and St. George Corporate. Established in 2006, AF Consulting deals with home loans and commercial finance and has written over 2,500 loans, amounting to total settlements of more than $2bn. The winner of multiple industry awards, Kelly is also a homeowner and active investor in the property market, having bought and sold many properties over the past 20 years. He has also completed over 950 separate equipment finance contracts totalling more than $150m.
Anasta Finance Consulting
Andrew Kelly
Matthew Paterson has 20 years' experience in the finance industry and is primarily focused on property finance in NSW, Qld and Vic. He honed his skills at St. George Bank and Commonwealth Bank and has expertise in areas such as construction loans, mezzanine finance, residual stock loans, preferred equity and commercial property loans. Over his career, Paterson has arranged between $2m and $100m plus worth of financing for many well-known property companies. He has a strong network in the property industry and assists his clients in delivering an overall project solution by engaging the appropriate industry professionals to ensure the right finance solution is obtained.
Partnership Finance Group
Matthew Paterson
1,200
$BN
1,150
1,100
1,050
Source: RBA Bank Lending Classified by Sector – D5 data, Sep 2022
$1,018
$1,088
$1,017
$1,098
$1,032
$1,118
$1,028
$1,129
$1,027
$1,142
$1,161
$1,039
$1,048
$1,166
$1,052
$1,178
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
2021
2022
YoY change
Click to see more
+7.0%
+7.9%
+8.3%
+9.9%
+11.2%
+11.8%
+11.3%
+12.1%
Year-on-year growth
in commercial lending
20
10
0
-10
Jan
2021
Feb
2022
Mar
2022
Apr
2022
May
2022
Jun
2022
Jul
2022
Aug
2022
Source: CreditorWatch
Year-on-year change in national trade receivables
-20
-30
-40
-50
-49.2%
-40.0%
-34.8%
-26.2%
-11.3%
-18.9%
+3.4%
+11.1%
“Builders and developers that do have the cash available to pick up sites for really good prices [are] just going to naturally keep the cycle going”
Isabella Constantinou, Simplicity Loans & Advisors
“We have built a deep reservoir of trust amongst our referral partners and customers on the back of our steady and reliable delivery of product solutions throughout market cycles”
Michelle Bannister, La Trobe Financial
Matthew Paterson,
Partnership Finance Group
“There still is arguably a fundamental undersupply of residential dwellings in some parts of the country”
“A lot of these high-profile developers, they're able to retain stock, achieve those high yields and in turn, depress the interest costs to their balance sheets”
Jeremy Enconniere, La Trobe Financial
Jason Arnold,
Quattro Finance
“I think at the moment at least 80% of the property development market is funded through the non-bank sector”
“There are so many lenders out there that will sell you the dream on day one, and the dream slowly deteriorates until you get to something that's totally different.”
This is not the case with La Trobe Financial, which delivers what it promises. Brokers cite factors such as flexibility, pricing, accessibility to key decision-makers, service level, and the fact that major banks have high staff turnover that negatively affects relationships.
“We're really confident in the processes and the outcomes that can be achieved, and that flows through to our service to the client,” said Constantinou.
“[La Trobe Financial] might be slightly higher pricewise, but we always sell it on the confidence that we know that this lender is going to give us an outcome.”
La Trobe Financial doesn’t see itself playing in the same sandpit as the majors, or even with the same bucket and spade.
“For us, it continues to be about taking a common-sense, solutions-focused approach to commercial lending,” she said.
It’s an approach that’s appreciated by brokers, who see non-banks as being in the right place at the right time as the majors increasingly retreat.
“What La Trobe Financial does really well, from a product side of things, is it's a one-stop shop in the non-bank space that really covers most of our client needs,” said Johnson.
Ripe opportunities don’t stay on the vine for long, and moving quickly on a deal is a definite strong point in the eyes of brokers and clients.
“Our clients have sometimes had 10, 20, 30 years of dealing with major bank assessments, and they're just tired of going through the rigmarole,” said Johnson.
“I think clients are fed up dealing with these long-winded application processes, and they're happy sometimes to pay a premium for something that's going to be quick.”
When major banks can take six to eight weeks to process a commercial loan application, La Trobe Financial sees its higher lending rates as a moot factor.
“We look at a different clientele who prioritise the solution and certainty of execution. For them, rate is not a key buying factor,” said Michelle Bannister.
sector,” said Arnold. “For the next six to 12 months, it's still going to be a heavy non-bank market.”
The fact that La Trobe Financial continues to see its commercial business ramping up in the current economy isn’t surprising given its commitment to helping clients through thick and thin.
“It's a long 70-year track record,” said Michelle Bannister, head of distribution in the Real Estate Credit Division at the lender, founded in 1952.
“Over that time, we have built a deep reservoir of trust amongst our referral partners and customers on the back of our steady and reliable delivery of product solutions throughout market cycles.”
“A lot of these high-profile developers, they're able to retain stock, achieve those high yields and in turn, depress the interest costs to their balance sheets,” said Jeremy Enconniere, head of commercial partnerships at La Trobe Financial.
Unlike mainstream lenders, non-banks like La Trobe Financial continue to be active in the development market because of the opportunities available.
“I think at the moment at least 80% of the property development market is funded through the non-bank
The positioning for an uptick is obvious to see in some areas.
“There are a lot of land loans being done right now,” said Paterson. “Rental yields and high inflation are pushing up construction starts, and all of those factors are leading a lot of developers to come in and buy sites to get ready for the unit market to have a run over the next 12 months.”
People are simply slowing down and biding their time a little.
“I don't think you're going to see the house prices fall back any more than perhaps 15% from peak to trough, which puts them back at 2020 to 2021 levels anyway,” he said.
In fact, savvy investors are looking at the lull as an ideal time to pick up bargains.
“It’s an opportunity for builders and developers that do have the cash available to pick up sites for really good prices, and that's just going to naturally keep the cycle going,” said Constantinou.
“As a broker, it's really important for us to have an understanding of their business, to help them where they might need some working capital finance.”
But any easing off on projects is being done with an eagle eye on where the current rate-hike cycle ends up. “As soon as that happens, I expect you'll see people pile into construction again to deal with the undersupply,” said Bannister.
This would put a floor under property prices.
Back row, from left: Jeremy Enconniere, La Trobe Financial; Jason Arnold, Quattro Finance; Andrew Kelly, Anasta Finance Consulting;
Michelle Bannister, La Trobe Financial
Front row, from left: Isabella Constantinou, Simplicity Loans & Advisors; Cory Bannister, La Trobe Financial;
Matthew Paterson, Partnership Finance Group; Matthew Johnson, Simplicity Loans & Advisors
“The market is moving so rapidly, with the cash rate bouncing up and down with the volatility, that you can never really at the moment lock in a certain price for a client,” said Paterson.
But a long-term shortage of accommodation is underpinning latent demand.
“We've seen sometimes [people] put transactions on hold, some selling, [but there is also] strong appetite, because there still is arguably a fundamental undersupply of residential dwellings in some parts of the country.”
Compared to pre-COVID, the commercial market is being driven to a greater extent by seasoned pros who are looking at what the situation will be a few years down the track.
“There's more sophistication coming through from the borrowers that are actually wanting to try and hold on,” said director Andrew Kelly at Anasta Finance Consulting.
“My book is quite old, and the borrowers are quite high-net-worth. They all see that there's going to be an opportunity around retail and residential build-to-hold, only because we've got a shortage of residential stock.”
The players who are continuing to operate in the current environment appear to be turning to non-banks and brokers more than they did in the past.
“We’re seeing more clients now probably coming to us that might be in some sort of bind; they've got a problem they're looking to solve,” said Matthew Johnson, managing director at Simplicity Loans & Advisors.
This means broker expertise is in demand as customers negotiate the changing situation.
“As a broker, it's probably even more important for us to be making sure we're at the forefront of what lenders are doing at the moment,” said Johnson.
While large banks are continuing to tighten lending criteria and derisk their portfolios, non-banks are stepping into the gap. Bannister estimates the total residential and commercial mortgages market at $2.7trn combined, turning over roughly every four years, which means around $7bn of business is up for grabs annually each time mainstream banks tighten their criteria by 1%.
“If we think of the non-banks as traditionally 20% of the marketplace, that's a sizeable opportunity,” he says.
“You can see that there's a long runway ahead of high-quality borrowers that need finance. That’s why we've got such great conviction in the non-bank space.”
Even so, the market is not returning to a pre-COVID setting, and higher rates are impacting some areas.
“In the development space, we're seeing the higher rates and higher costs having a real impact on feasibility of transactions,” said Jason Arnold, managing director at Quattro Finance.
THE NON-BANK commercial lending market’s kung fu is more than a match for this economy.
While rates are increasing, supply chains are grinding slowly and headlines are warning of a construction sector crisis, it might seem that commercial lending is not necessarily a safe harbour.
Three senior managers from La Trobe Financial recently met at Seta Sydney restaurant with a group of top mortgage brokers to discuss the business lending market. Less a discussion on what is ailing the economy and more a brainstorm on why commercial lending is holding up at non-banks and perhaps set to strengthen, it highlighted the growing opportunities for brokers in the sector as Australia transitions out of the pandemic.
Jason Arnold
Quattro Finance
Matthew Paterson
Partnership Finance Group
Andrew Kelly is sole director of Anasta Finance Consulting. Over 21 years, he has specialised in all forms of business loans, gaining managerial experience at ANZ Bank and St. George Corporate. Established in 2006, AF Consulting deals with home loans and commercial finance and has written over 2,500 loans, amounting to total settlements of more than $2bn. The winner of multiple industry awards, Kelly is also a homeowner and active investor in the property market, having bought and sold many properties over the past 20 years. He has also completed over 950 separate equipment finance contracts totalling more than $150m.
Anasta Finance Consulting
Andrew Kelly
Matthew Paterson has 20 years' experience in the finance industry and is primarily focused on property finance in NSW, Qld and Vic. He honed his skills at St. George Bank and Commonwealth Bank and has expertise in areas such as construction loans, mezzanine finance, residual stock loans, preferred equity and commercial property loans. Over his career, Paterson has arranged between $2m and $100m plus worth of finance for many well-known property companies. He has a strong network in the property industry and assists his clients in delivering an overall project solution by engaging the appropriate industry professionals to ensure the right finance solution is obtained.
Partnership Finance Group
Matthew Paterson
Sticky demand
Reserve banks around the world are intent on reducing demand, but it seems rate hikes in Australia aren’t having much of an effect on the commercial lending market.
“We haven't seen a shift in demand at all at this stage,” said Cory Bannister, senior vice president and chief lending officer at
La Trobe Financial.
The latest national accounts data shows that current savings levels remain just above 2019 levels, while people squirrelled away cash at around four times the normal pace during parts of 2020 and 2021.
Consumers also seem to have no intention of putting their wallets away; total retail turnover has been on an upward trajectory for most of the last year.
“You've got rates needing to increase to try and stem inflation, but it’s just not having the desired impact on retail trade figures,” said Bannister.
All this suggests that hiking cycles and supply chain problems are mere speed bumps for the economy as demand is unshackled from its COVID fetters.
“Australians have got a huge war chest, built up through the COVID period,” said Bannister. “The sum is around $280bn that Australians have got in offset accounts and savings.”
In La Trobe Financial’s book, there is still very little evidence of stress in either its residential or commercial mortgage portfolios.
Reserve Bank data shows that year-on-year growth in commercial lending has topped 10% every month since May. Likewise, based on the latest data from CreditWatch, trade receivables, an indicator of business-to-business trade, are growing at the fastest pace since April 2019.
Cory Bannister,
La Trobe Financial
Labour shortages have also been causing delays. This is due to shortages not only in the construction sector but also across the loan ecosystem, of staff ranging from valuers to accountants to lenders.
“I'm finding that deals are taking longer to close now than they were 12 months ago,” said Matthew Paterson, commercial broker at Partnership Finance Group.
The pace of rate rises has also made it difficult to service clients’ needs.
In the building sector, as materials get delayed, labour is reallocated, which causes scheduling issues when the materials finally arrive on site.
The cumulative effect of this on multi-unit developments translates into a 15- to 22-month delay to completion in many cases.
“It throws out the whole profitability of the project,” said Bannister.
“So now people are starting to put their hands in their pockets a little bit until the pressures come off.”
Companies have moved to accommodate these delays by taking on extra stock.
“There's a lot of small businesses that have adopted leaner structures over the last five years, and they’re now seeing problems where they are having to hold stock for much longer and hold working capital for much longer,” said Isabella Constantinou, associate director at Simplicity Loans & Advisors.
How disruption to the supply chain affects funding requirements is another issue brokers need to keep up with. This is affecting almost every industry, from coffee to crossbeams, but is hardly a new issue.
According to Flexport’s Ocean Timeliness Indicator, the time taken for containers to travel across the Transpacific Eastbound (China to the US) route has decreased this year from 110 days in April to 86 days in late September, a significant improvement but longer than typical times of 60 days seen in 2019. Shipping container prices are now also less than half their pandemic nadir but still around four times more expensive than pre-COVID.
Andrew Kelly,
Anasta Finance Consulting
Jason Arnold
Quattro Finance
Jeremy Enconniere
La Trobe Financial
Andrew Kelly
Anasta Finance Consulting
Matthew Paterson
Partnership Finance Group
Andrew Kelly is sole director of Anasta Finance Consulting. Over 21 years, he has specialised in all forms of business loans, gaining managerial experience at ANZ Bank and St. George Corporate. Established in 2006, AF Consulting deals with home loans and commercial finance and has written over 2,500 loans, amounting to total settlements of more than $2bn. The winner of multiple industry awards, Kelly is also a homeowner and active investor in the property market, having bought and sold many properties over the past 20 years. He has also completed over 950 separate equipment finance contracts totalling more than $150m.
Anasta Finance Consulting
Andrew Kelly
Matthew Paterson has 20 years' experience in the finance industry and is primarily focused on property finance in NSW, Qld and Vic. He honed his skills at St. George Bank and Commonwealth Bank and has expertise in areas such as construction loans, mezzanine finance, residual stock loans, preferred equity and commercial property loans. Over his career, Paterson has arranged between $2m and $100m plus worth of finance for many well-known property companies. He has a strong network in the property industry and assists his clients in delivering an overall project solution by engaging the appropriate industry professionals to ensure the right finance solution is obtained.
Partnership Finance Group
Matthew Paterson
Isabella Constantinou is one of the few female brokers writing solely commercial lending transactions. She started in the mortgage broking industry in November 2017 and worked as an associate to one of the directors at Simplicity Loans & Advisors for three years before moving to an associate director position in April 2020. Since becoming a broker, Constantinou has settled over $350m in transactions and won a number of accolades, including being the first woman to win MPA’s Top Commercial Broker award in 2022, and receiving recognition as an Excellence Awardee in the Commercial Broker of the Year category at the 2022 Australian Mortgage Awards.
Isabella Constantinou is one of the few female brokers writing solely commercial lending transactions. She started in the mortgage broking industry in November 2017 and worked as an associate to one of the directors at Simplicity Loans & Advisors for three years before moving to an associate director position in April 2020. Since becoming a broker, Constantinou has settled over $350m in transactions and won a number of accolades, including being the first woman to win MPA’s Top Commercial Broker award in 2022, and receiving recognition as an Excellence Awardee in the Commercial Broker of the Year category at the 2022 Australian Mortgage Awards.
0
1,200
$BN
1,150
1,100
1,050
$1,018
$1,088
$1,017
$1,098
$1,032
$1,118
$1,028
$1,129
$1,027
$1,142
$1,161
$1,039
$1,048
$1,166
$1,052
$1,178
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Source: RBA Bank Lending Classified by Sector – D5 data, Sep 2022
2021
2022
YoY change
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+7.0%
+7.9%
+8.3%
+9.9%
+11.2%
+11.8%
+11.3%
+12.1%
Year-on-year growth
in commercial lending
0
Sticky demand
Uncharted territory
Supply concerns
Waiting for peak
The La Trobe Financial factor
Sticky demand
Supply concerns
Uncharted territory
Waiting for peak
The La Trobe Financial factor
Sticky demand
Uncharted territory
Supply concerns
Waiting for peak
The La Trobe Financial factor