Non-bank lender Pearlfisher Capital has rolled out a new mortgage fund for lending to property developers who find it more difficult to secure funding from banks.
Pearlfisher director Tony Abraham said the mortgage fund allows borrowers to access non-bank lending for well-considered projects at the low-to-medium end of the risk spectrum. It aims to address concerns about residential housing supply and the challenges many borrowers face in raising flexible debt for projects, reported TMM Online.
“It provides a committed line of capital for Pearlfisher to expand its first mortgage lending,” Abraham said, as reported by TMM Online.
Abraham explained that developers need to have consents and a construction contract and have pre-sold a percentage of the development before Pearlfisher Capital considers funding. The lender might also consider finance for developments outside the fund on a project-by-project basis, but the fund will be prioritised.
“We will only lend at a level that meets our criteria, and we are comfortable with,” Abraham said.
Pearlfisher Capital has received a 50% increase in developer finance inquiries since the fourth quarter of 2020, Abraham said.
“Banks’ increased capital requirements and strict lending conditions mean many developers are shifting to non-bank first mortgage funding, which is already well established in offshore markets – including Australia, Europe, the UK, and the US,” he continued. “We are looking to step in and provide debt for housing projects that have been finding it challenging to access finance from banks.”