Clinch Finance is concentrating on the market for bridging loans for home buyers – a part of the mortgage market it believes is under-served.
Clinch, which launched its first loan last week, is being funded initially by property-backed commercial lender Assetline Capital, which claims to have originated 1000 loans worth a total of A$1.9 billion in its 10-year history.
Clinch is owned by its founder and chief executive Wayne Miller and AltX Venture Holdings.
Miller said the company’s plan is to establish warehouse funding as the business grows.
Miller said he was happy for Clinch to remain a specialist lender because he sees a gap there, although he couldn’t provide any data about the proportion of residential property transactions that involve bridging loans, given the opacity around that part of the market.
“The major banks are not interested in offering bridging finance to anyone other than their existing customers, and their approval processes are slow. Our broker network is telling us there is a need for a lender in this segment.”
“Getting the timing right when buying and selling a home in the same market is difficult at the best of times. Most of us know families that have had to find a short-term rental because they’ve sold and haven’t been able to secure another property in time, and then end up moving twice.
“Something we are seeing a lot more is older people who need funds to get into aged care but who also need time to get their home ready for sale.”
Clinch will lend from $200,000 to $10 million for up to six months, with no repayments due until maturity. Miller said the ability to provide what he calls “jumbo loans” is one of the things that sets Clinch apart and should appeal to brokers.
He said another competitive advantage is a fast turnaround. Clinch has a “fully digital, tech-enabled solution” and claims to be able to provide conditional pre-approval in under six hours utilising its “proprietary credit decisioning engine”.
And another advantage is that Clinch will be able to draw on Assetline’s expertise and experience, allowing it to be flexible in considering non-standard scenarios.
Miller’s background is in the life insurance industry. He has worked at Clearview and at Pacific Life Re.