CREDIT RISK ASSESSMENT NOTE

Increasingly, traditional debt providers (Banks and Non Banks) are perceived as having conservative and non-commercial credit policies that do not support some categories of borrowers or advance their aims.

It is our process to evaluate every application on its merits. Over the years we have developed a 4 stage assessment criteria which has proven sound and solid.

  1. The Borrower. Foremost we consider income and affordability, repayment history on all commitments and other relevant factors such as credit reports and additional securities.
  2. The Valuation. We consider the value of the underlying property/ies including market sentiment and growth outlook. Every property will be valued by an acceptable valuer*. We do not accept assignments of valuations.
  3. The Purpose. Purpose of funds must be unregulated under the consumer credit code. What are funds used for and how likely that these funds can be lost. (in our experience borrower who invest into “unsound projects or opportunities, are likely to experience financial difficulties, forcing a lender to take recovery steps).
  4. The Exit. How is the loan going to be repaid. It is paramount to establish a sound exit strategy otherwise enforcement proceedings are inevitable. When the exit is proposed to be through refinance we will determine if (in our view) a refinance can be obtained for the proposed transaction. We consider the relevant banks credit criteria to determine that fact. A indicative letter of offer from a lender does not constitute a satisfactory exit strategy.

*Property valuations are fallible. The valuations relied upon when making a risk assessment can be wrong and may not accurately reflect the value of the property at the time it is sold. The worst mistake a lender can make is to rely on a valuation report without undertaking any further due diligence. We consider many variables, including (but certainly not limited to) comparables used by the valuer and the valuers’ credentials.