The tighter bank lending environment means that there are now more mortgage seeking clients out there who can’t get finance from a bank.

While the non-bank sector provides a viable alternative for many such clients, many advisers remain unsure about it.

Resimac sales leader Huia Manual says it’s important for advisers to get away from the tick-box mentality where by an adviser only sees banks as an option.

“Just because the deal doesn’t tick the boxes with a bank, it doesn’t mean it can’t be placed somewhere else – ie: as a specialist loan with a non-bank lender.”

Identifying clients who might benefit from a specialist loan comes down to assessing each client on an individual level and getting to know their circumstances.

Manual says advisers need to ask whether the client has a deposit, income, and equity and then think about what the situation is that means they don’t tick the boxes for a bank loan.

Clients who have had credit issues in the past but are now back on track and clients who are self-employed but can’t show financials for two years are prime candidates for specialist loans.

“If they have said yes to those first questions, the adviser needs to think about whether there is a non-bank lender who might be able to help the client given their situation, as well as what the best solution for the client.”

In order to be able to provide the client with the best information on the possible solutions, advisers need to have both confidence in and knowledge of the non-bank sector.

Manual says an adviser might know there is deal there for the client, but not know where to go or what is out there besides the banks, or they might have had a bad experience with a non-bank lender in the past.

To this end, it pays for advisers to remember there are different levels of specialisation in the sector.

Resimac sits beside the banks as an alternative, then there are other non-bank lenders at different levels and there are different rates and fees for each non-bank lender,

“The rates might seem loaded but such a loan could help a client move into a better situation,” she says.

“A non-bank solution is often a temporary, stop-gap solution. We are all about helping clients to get back on track now and then, eventually, back in with the mainstream banking system.”

However, arranging such loans can be difficult for advisers who don’t know the sector and what is out there.

For advisers keen to find out, Manual recommends attending training days which feature non-bank lenders to learn what is out there and also engaging with the non-bank lender BDMs.

“The BDMs want to support advisers and their clients. Contact them – they really want to talk through deals to help with the loan process to see if they can help. Or they can recommend ways in which a client could be helped.”

Ultimately, it’s about being open and thinking outside of the box, she says.

“Advisers should follow their gut. If a loan doesn’t tick the bank boxes but the client has core things like deposit, income, and good character in place then it is more than likely a non-bank lender can help that client.”