PMA Returns to Pre-Covid Lending Policies

Press Release: Private lender, Private Mortgages Australia (PMA), had to make some smart business decisions when Covid-19 kicked in last year and is pleased to announce that business is back to normal.

“When the pandemic began in March last year we quickly decided to make changes to our lending policies so that we could manage our risk and make it safely through the other side,” said Peter Cuskelly, Managing Director of Private Mortgages Australia.

PMA made the decision to reduce LVRs to 70% (previously 75%), employed a very strict policy around acceptable borrower exit strategies and stopped lending on Second Mortgages.

Despite the changes, the company maintained a healthy pipeline of loans throughout Covid and is now moving to return to pre-Covid lending practices including increasing LVRs back to 75% for major metropolitan residential security properties and starting to lend on Second Mortgages again.

While many private lenders were forced to stop lending during the crisis due to low demand from borrowers or limited access to funds, PMA was able to adapt to the changing environment and continued to support small business and property developers.

“We quickly realised that the pandemic was throwing up a lot of problems for businesses that we were able to solve with our short-term finance solutions,” said Cuskelly. “While the Government was rolling out a number of measures to help businesses, there were still a lot of SMEs out there that were falling through the cracks.”

“There were obviously many businesses having cash flow issues that needed additional funds to keep the business operating, pay employees or to progress projects. While the Government and banks were rolling out support programs there were still a number of ways that private lenders could offer assistance,” said Cuskelly.

Private Mortgages Australia recognised a number of areas where private lenders were best placed to support businesses during the crisis:

• Provide funds to tide over a business experiencing cash-flow issues.
• Loans over $250,000 for businesses who weren’t able to access the Government’s SME Guarantee Scheme.
• Provide short-term funds while businesses awaited the JobKeeper payment reimbursement to arrive.
• Funding for the construction industry experiencing rising supply costs caused by the pandemic.

After successfully navigating the Covid-19 crisis, PMA is experiencing continued growth and is expanding the team to manage the demand.

“We have just hired a new Relationship Manager, who helps brokers understand how we can assist their clients, and we’ll be hiring another Credit Manager and Business Development Manager in the near future,” said Cuskelly. “Private lenders have always had a focus on business lending and supporting small businesses and it’s great this has been able to continue during this period of disruption and into the future.”