Xceda Finance has been around more than 35 years and after a change of ownership and regulatory changes is positioning itself to be one of the main non-bank lenders.
McGrath tells TMM that in the past its main lending product was a bridging loan which had done very well, but these loans tended to be churned quite heavily – as is their nature.
Recently it has rolled out a property investment loan with a five-year interest only option or principal and interest at attractive interest rates.
It’s similar to a product which was in the market previously which had proved popular.
Another of the big changes is that the government’s Deposit Compensation Scheme started on July 1 meaning that all deposits up to $100,000 are guaranteed if the company got into trouble.
McGrath says already there has been a surge in new deposits which means it has more funds to lend out.
Also, it means that non-bank deposit takers like Xceda will be able to self-fund and won’t have to rely on securitisation or bank lines for funding.
McGrath says there is tremendous opportunities for lenders like Xceda and he can see the sector growing from a lending market share of 2% to closer to between 8-10% as is the case in Australia.
In this podcast McGrath gives his thoughts on changes to the Credit Contracts and Consumer Finance Act (CCCFA) and how new conduct regulations work.
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