For most investors, a trusted bank provides a reliable source of financing when it is time to buy another asset. But increasingly, banks are more selective about which investors they will support, even breaking off long-standing relationships over serviceability concerns.
Banks have tightened up even more following the Covid-19 crisis, opting to focus on existing customers and sticking to conservative lending limits. While credit conditions leave investors frustrated, there are a growing number of alternative financing options beyond the banks.
Some, like second-tier lenders Resimac, Bluestone, and Pepper Money, provide a similar service to mainstream lenders, with interest rates only slightly higher than their banking peers.
Other alternative lenders operate with an entirely different business model. Peer-to-peer (P2P) lenders, such as Southern Cross Partners and Squirrel Money, lend with retail…
