There is no doubt that we have seen the banks tightening their credit criteria after new regulations imposed by APRA and ASIC and more recently the Royal Commission.

The banks have changed their focus from literally approving most loans, to basically finding ways ‘not’ to approve loans. That’s the major banks, what about the smaller lenders? Well, they are having the best time of their lives. They are picking up all the business that the banks are choosing not approve, and they are doing a good job of it.

Banks are currently sitting tight waiting for the Royal Commission to end to see what the findings will be and then what the recommendations will be. I think they already have an idea of what the recommendations will be and they are trying to put practices in place from now to ensure the damage is minimal later down the track.

What does that mean to you as the borrower? Well, it’s hard to obtain a loan from a major bank at the moment unless it’s a ‘vanilla loan’, which means you tick all the boxes for their specific risk appetite. So, what if you are not their perfect client? There are still plenty of options outside of the major banks. Many smaller lenders are still ‘open for business’ and are willing to lend money.

The smaller tier lenders have been competing with the major banks since the 80’s and the only way they compete is to be a cheaper alternative to the banks. They have always had lower rates than the banks because they have much lower overheads than the major banks. Even the major banks are following in their footsteps with Bankwest announcing that they will be closing their branches along the east coast of Australia.

To answer the question, that I get asked nearly every day, the short answer is YES, banks are still lending if you are their ideal client, and if you are the not big 4s ideal client, then we can still obtain a loan, it just may be from a smaller tier lender.

We have over 30 lenders on our panel, so if your situation doesn’t fit the strict criteria of the major banks, we will find a lender that is willing to help you.

“A bank is a place that will lend you money if you can prove that you don’t need it.” – Bob Hope

Thank you for reading