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The Private Credit Market Provides Opportunities For Growth

Posted by: Danielle Moore at March 30, 2022

The private credit market has accelerated over the past few years and is now worth more than $1trn globally – not far off the $1.3trn institutional loan market. While we haven’t seen the same kind of growth up until now in Australia as the US and Europe, we’re starting to see the same trends emerging.

One of the key signs we’re following is that Australia’s domestic banks have re-focused their energy on funding larger organisations, rather than small to medium-sized enterprises. Regulations have also impacted their capacity to fund clients, resulting in tighter lending conditions brought about by the banking Royal Commission last year and changes in the APRA lending guidelines.

This significant shift has now opened the door for greater involvement by players in our private debt market, as borrowers increasingly look to access credit away from the banks. The non-bank sector is also known and appreciated for its greater flexibility and agility compared with the more bureaucratic and conservative traditional banks.

Additionally, non-bank lenders are more suited to having conversations tailored to each borrower, leading to stronger relationships and more customised transactions, with bespoke loan terms and covenants. This is particularly helpful for borrowers that don’t fit the lending parameters of traditional banks.

If you want to explore flexible alternative sources of capital to fund your growth, get in touch for a chat. We’re always happy to share our insights and experience.

Danielle Moore

The Trustee for the Rebus Capital Partners Unit Trust ABN 88 452 904 420. Authorised Credit Representative 523233 under Australian Credit Licence 536100.