RESIMAC General Manager Adrienne Church says ongoing tightening from the banks has led more brokers to recommend non-traditional lenders.
The lender saw a 30% rise in specialist lending business in April, Church said, driven by tightened lending from the major banks and increased awareness about non-bank alternatives.
Following the growth the lender has introduced a range of cuts to its prime, specialist, and low-doc rates. Interest rates on specialist lending have been cut by 33 basis points, and prime rates over 80% LVR have been cut by 91 basis points. The new rates come into effect on Monday.
Chuch says RESIMAC expects to continue taking business from the major lenders in coming months, as borrowers with slight credit history issues, self-employed people, and those blocked by tougher servicing calculators turn to alternative lending sources.
She adds: "I have got a lot of excitement out of seeing more advisers trialling us. I see that on a daily basis. More and more advisers are giving us a go, and that is exciting. The growing mix of business is interesting, and advisers are acknowledging there is an opportunity for their clients. Advisers have more comfort to sell non banks to borrowers. our rates are competitive and consumers are happy to go with non-banks. All of those factors together will help this segment grow."
RESIMAC is set to follow up the rate cuts with further interest rate reductions for self-employed borrowers. Church believes self-employed Kiwis will become a growing part of the lending market, and are often overlooked by traditional lenders. "It is definitely under-catered. There are a lot of Australian SME lenders, but very few here. It is about 25% of the New Zealand economy. There are a lot of people out there who want to leverage their business for growth, and again, the banks are getting tougher."