About the Loans
Where are they sourced
Balmain's extensive origination network of 7 offices throughout Australia structure transactions for both existing and new clients. Balmains clients compose a mix of long established businesses and successful property investors, developers and builders.
Why borrowers use Balmain.
Over the past 30 years Balmain have arranged around $30bn in commercial real estate finance for over 7000 borrower clients.
A recent survey of 38 separate borrower loans (of between $3m and $50m in size) in the Balmain pipe-line demonstrated the following:
- Average aggregate dollar value of loans made per borrower was $38m
- Average number of loans arranged by Balmain was 9
- Vast majority of borrowers were successfully running their own business and investing in property, or property investment was a full-time focus
- Average net worth was $50m
So why have so many wealthy and successful borrowers used Balmain?
We believe there are 4 primary reasons:
The ability to deal with a lending professional at all times. All Balmain loan origination executives are expert lenders, most have been with the organisation for many years and live eat and breathe commercial property lending. They understand how to structure and arrange commercial loan transactions from the simple to the complex and have attention to detail that is hard to find elsewhere.
History has shown borrowers that having a diverse range of lenders bank and non-bank is sensible. There are times when non-bank lenders can provide better solutions than the banks and vice versa. Banks, particularly post GFC, have internal risk limits that often means regardless of the quality of the borrower or the asset they simply cannot lend in that area.
Banks often have borrower loan limits and once a borrower approaches that, they have no choice but to seek funding elsewhere.
Balmain have processes designed to facilitate lending that are fast and involve sensible risk mitigation strategies and structures. The combination of good people sound processes and strong market knowledge help Balmain not only win new but retain existing borrower relationships.
Balmain Private investors benefit from our experience in large scale commercial property lending. This, combined with strong and vigilant credit processes and post loan management have allowed Balmain to become the largest manager of commercial mortgage loans outside the major banks.
How are they selected
Balmain typically originates over 500-700 loans per year, and places these with a variety of lenders. The loans offered to the Balmain Private Investors are selected for a number of reasons.
- Typically we have a long term relationship with the borrower and have completed many of their other loan transactions.
- The borrower is a well-established and experienced business owner or property investor.
- The borrower has a high net worth and a substantial property portfolio.
- Balmain Private after reviewing the loan and the borrower is comfortable with the asset, its LVR, other risks and the return to investors.
The Credit/Approval Process
Balmain’s experienced credit team undertake a detailed and thorough assessment of the credit quality of each and every loan. This includes:
- The borrower(s) experience and financial capacity.
- The type of security property, location and the market demand for the asset.
- The exit strategy at loan term conclusion.
- Security property’s income producing capacity and the ability to find replacement tenants.
- Risks and the ability to mitigate these by structuring appropriate loan conditions.
Fully funded & settled by Balmain
All Balmain Private loans are fully funded and settled by Balmain or a Balmain managed entity before being offered to investors.
This means investors are able to invest with confidence that the loan is available and has other investors already in place.
Want more information?
Full details of the loan selection, approval and settlement processes are outlined in the Product Disclosure Statement.