Wealthy Individuals with NIA* over $1M or net of over $2.5M including the family home & earning $250,000+ per annum can be a private lender
What you can expect as a private lender to our clients:
Above-market interest returns that privately funded loans continue to generate year-on-year. Funds safely secured by mortgages and caveats on Australian residential, commercial and retail property including vacant land.
Effective 1 Sept 2023 EquityCap returns to lender’s monthly interest payments of:
✔ 12% per annum net of fees for loans secured by 1st mortgages
✔ 15% per annum net of fees for loans secured by 2nd mortgages & caveats
It'll be the name you nominate i.e (personal, company, trustee or SMSF) on the owners property title(s) or a bare trustee that our Solicitors arrange for you. Interest payments from the borrower are prepaid for the term of the loan so there can be no missed payments to you as the lender. Any and all fees are payable by the borrower.
Highly experienced in-house mortgage managers, handpicked external consultants, certified property valuers inhouse and a specialist property legal firm ensures all panel lender's benefit from collective skills and knowledge. Choose to have no or minimal hands-on involvement from you as the lender or co-lender.
All loans are approved by EquityCap’s investment committee and credit committee following a rigorous due-diligence and credit approval process. All loans are handled by a specialist mortgage law firm that conducts final due diligence and certifies the property title(s).
Our software allows you as the lender and your borrowers to log in and see statements at any time through a portal and sends out statements whenever a payment of interest is distributed and at the end of the financial year. Through the lender portal our software aggregates and reports on individual portfolio yield and other useful metrics. Our software issues end of financial year statements containing all information necessary for accountants to prepare your tax returns.
Typical loan parameters: from $100k, property type agnostic, Australia-wide, 1-6 months term, up-to 75% LVR, first or second mortgage over Australian real estate.
The principals have specialised in short-term (1-3 years) property backed lending since 2017, long-term (1-30 years) property backed lending since 1995, have a trusted reputation built over 28+ years and a track record of capital preservation for its lender's.
*NIA (net investible assets)
Interested and wish to join the panel as a new lender?
Click Register Today (below) to access the lender panel registration page. Your request will be processed and a manager will contact you to discuss further. There are no fees to be part of our lender panel.
When you're a panel lender, forms will be provided to you that authorise our Lawyers to act for you in each and every transaction. On your behalf, they attend to all matters and at no expense to panel lender's.
You'll be provided with our Origination and Servicing (Mortgage Management) Deed. With this agreement, clients will be allocated to your funds and includes everything necessary to make it work for all parties.
Being a private lender requires either hands-on or hands-off involvement
What is hands-on?
The lender has requested that we first present any and all loan proposals. EquityCap will package your proposal supported by desktop valuation(s) where possible, calculation terms sheet, details on all directors and guarantors, contract details of purchase if applicable etc. The preliminary package is then emailed to the lender for a yes or no decision. The lender then confirms to EquityCap if it’s a loan that they would like to fund or not like to fund.
If the lender wishes to fund the owners loan requirement, we then order a desktop valuation provided by our certified valuer and package the ID’s, council rates notice, full contract of sale if applicable and any other supporting documents etc if and as applicable. The lender then reconfirms that it is a loan they wish to fund for the owner. The loan agreement is ordered by EquityCap. When the loan is ready to fund, the lender is contacted by our legal firm Bransgroves Lawyers by email confirming all checks have been finalised and loan is ready to fund. The lender is then required to transfer the funds to the trust account in preparation for settlement of the borrower’s loan.
What is hands-off?
The lender has requested that we don’t present any loan proposal. EquityCap is aware that the lender has chosen hands-off involvement. The package is completed by EquityCap under the approved parameters established between EquityCap and the lender. The package is then sent to the lender for the tick of approval prior to giving the go-ahead to the owner/purchaser and preparing their loan for settlement. When the loan is ready to fund, the lender is contacted by our legal firm Bransgroves Lawyers by email confirming all checks have been finalised and loan is ready to fund. The lender is then required to transfer the funds to the trust account in preparation for settlement of the borrower’s loan.
Above-market interest returns available now
Available to lender's are interest returns for loans secured by either 1st mortgage, 2nd mortgage or caveat. Typically returns are lower on a loan secured by 1st mortgage than they would be on a loan secured by a 2nd mortgage or caveat. We don't deduct management fees or other expenses from the returns paid to lender's. Lender's retain 100% of the interest (discounted) transferred to the lender's nominated account at time of settlement.
Funds are on loan for 3 to 18 months
Loan terms available to borrowers are from 3 to 18 months. If they require a longer term, the loan may rollover for up-to 36 months. If a rollover is approved, the borrower's may be required to increase the loan amount (LVR permitting) to cover additional interest for the requested loan term.
Amount of funds required to be a lender
There isn't a predetermined amount. The ideal amount however is from $1,000,000. The minimum loan amount to any borrower is from $100,000. Typical loan amounts to borrowers are from $100-500,000 and secured by registered or unregistered mortgages and caveats. Lender's can expect a turnover of their funds several times a year.
Lender and Co-lender options are available
Lender's are given the option of lending 100% of a particular borrower's loan requirement and funds will be secured against one or more of the borrower's properties. Or, choose to be a Co-lender and fund a range of different properties, different property types, to different owners and in different locations to suit. Returns are always the same no matter what the lender decides i.e lender, co-lender or both.
The security we lend against
The most popular is residential property followed by residential vacant land. Security includes townhouses, villas, apartments, duplexes, multi-level complexes, commercial property such as office buildings or factorettes, rural residential property, lifestyle acreage and retail property such as shops and pubs. We'll also accept development land and sites.
How and when loans are paid back
At the end of the loan which is up-to 18 months or if an approved extension, up-to 36 months, lender's can expect the return of their capital to the same account it was transferred from. Upon discharge, our nominated legal firm will arrange the release of the lender's mortgage from the borrower's title(s) and removal of charges on the PPSR and transfer the discharge proceeds to the lender's account. There is a legal fee payable to our nominated legal firm by the borrower.
Who you are lending to
Our clients, that become clients of the lender, and borrowers can only be Company Directors, Corporate Trustees of Family Trusts and SMSF's. Loans aren't available to Individuals, ABN holders without a Company, Family Trusts without a Corporate Trustee or Sole Traders. Borrowers are property owners or property buyers located across Australia. At all times the borrower will require an ACN otherwise loans cannot proceed to settlement.
When borrowers can't return the lender's loan
Despite a borrowers best laid plans to payout the lender's loan at end of loan term, it does happen where an incoming lender changes their approval or a property sale falls through or their business cashflow didn't eventuate, perhaps the proceeds from sales didn't eventuate. The manager communicates with the borrower no later than 6-weeks before discharge is due to occur. If it looks like the exit plan has changed and discharge is unlikely to occur on time, management have options to refinance the loan to another panel lender, extend the loan term (LVR permitting), or place the property and borrower into the hands of our nominated legal firm and sell the property to recover loan funds for the lender.
Does EquityCap have a formal default management process?
Yes, we have a formal Default Management and Loan Recovery Policy. The overarching premise of this policy is that we treat the interests of our lender's as the absolute priority. This includes providing regular up-dates on the status of any mortgage in recovery management to Lender's. In the first instance, we will work with the borrower to achieve an acceptable outcome. If an acceptable outcome is not achieved within a reasonable timeframe we (through our nominated legal firm) will instigate formal legal proceedings on behalf of the Lender pursuant to the loan security held and if required sell the security property.
Why provide your funds in private mortgages?
Private mortgages are secured by real estate which means that should the borrower not be able to repay what they borrowed then it is possible to take possession of the security property and recover the loan amount. We require our borrowers to pay the interest component of the loan upfront so our lender's achieve a return should we need to sell the security property. With the banks placing more and more restrictions on who they will lend to, the opportunity for private lenders is growing and growing. Borrowers pay a premium to access funding from a lender on our private lender panel which means our lender's have the opportunity to create passive income streams.
How EquityCap receives income from the borrower
Our income is generated from initial establishment fees typically 1-2% charged on each loan, ongoing monthly management fees of typically 0.1%, due-diligence fees of $2,950 and a loading on the borrower's interest rate.
Information you need to know
Simply click this button register today and take a minute or so to complete the information required.
You'll know we've received your registration as an automatic email will be sent to you as confirmation.
A manager will contact you during business hours for introductions and to walk you through the process.
There are a few forms we'll send you after finalising your registration on our lender panel.
The first form is giving authority to our nominated legal firm to prepare loan agreements and supporting documentation for your approval before release. Our nominated legal firm will do everything and its all paid for by the borrower.
The second form is the deed between us and the lender name that you nominate i.e your company, your family trust, your personal name, your SMSF etc.
The total amount of interest is credited back to your bank account on or immediately after settlement has occurred by our nominated legal firm.
Should the borrower request a second loan term of up-to 36 months, subject to having available equity and approval, a loan variation agreement will be ordered at the borrowers expense and interest for the requested loan term will be added to the increased loan amount.
There are documents that are specifically created for our use and the use of our panel lender's.
The terms and conditions differ between the different firms that prepare loan agreements, variation agreements etc.
When lender's choose to be co-lender's for example, the name on the mortgage is a bare trustee. Inside the bare trustee will be a syndicate agreement with your name on it.
Most legal firms don't make a facility like this available to lender's. The documentation we use is only available from our nominated legal firm.
Lender’s may be affected by any default by a borrower under a loan. We have professional and experienced staff to administer the loans during the loan term. We will determine whether to take enforcement action against any defaulting borrowers.
Where a borrower fails to make an interest payment on or before the due date, we will:
(a) contact the borrower seeking payment within seven days to avoid further action being taken, and
(b) at its discretion, and dependent upon the terms of the loan documentation, apply a higher default rate of interest from the date of the last interest payment until the date the default is remedied.
If recovery action is issued against a borrower:
(a) the lender may become a mortgagee in possession
(b) the lender may procure a new valuation in respect of the underlying secured property
(c) the underlying secured property may be placed on the market for sale or, depending on the nature of the secured property, may be managed prior by us prior to commencing a sale process, and
(d) it is possible that the secured property may be sold at a price that is less than the amount required to satisfy the outstanding balance of the loan, interest and costs (including recovery fees). Should this occur, recovery action against the borrower and any guarantors will continue.
Our nominated legal firm's fees are always paid by the borrower and indemnified by EquityCap. Panel lender's pay $0.
A private mortgage is a loan which is secured by a mortgage over a property where the money is typically sourced from private investors. A private mortgage is generally used when the borrower has short-term finance needs or needs funding urgently and can’t wait the 6-8 weeks that banks usually take to approve a loan.