THE inference by some non-bank lenders that they are cheaper than the banks is often incorrect, says Resi Home Loans WA manager Peter Yacopetti.
He said non-banks often just fronted for banks, drawing their finance from them.
Mr Yacopetti said often the terms and conditions of the loans were no different to those of a bank.
He said Resi Home Loans was different because its finance came from Perpetual Trustees which could afford to provide the finance at a cheaper rate.
“They (Perpetual Trustees) are getting funds on a long-term basis and they are lending it to us for 25 year loans,” Mr Yacopetti said.
“The banks are short-term borrowers. They get their money from people who put their money in for a short term.
“So they have got short-term money coming in but are lending it long.”
He said borrowing short-term and lending long-term often drew big costs.
Resi Home Loans entered the business market about 12 months ago in an effort to capitalise on a market less competitive than the home
lending one.
Mr Yacopetti said Resi was still doing more residential business than business lending but it was hoped the company would eventually receive about 50 per cent of its work from small business operators.
“It has really been a problem for us because home loan residential stuff is everybody’s baby,” he said.
“All the banks are doing it but the business side is not so actively pursued by other people. Therefore we are competing with less lenders in the business area.”
He said Resi would finance self-employed people who could not show any historical financial details as long as they had equity in their home or investment property.
Mr Yacopetti said that it was important to build a relationship with the smaller operators.
