A Growing Opportunity for Brokers

In recent insights shared by the Australian Broker, private credit is making significant impacts in Australia’s loan market, creating a diverse wealth of new opportunities for borrowers, brokers, and lenders. Globally, private credit has evolved into a thriving market, valued at around US$1.7 trillion. This growth largely followed the Global Financial Crisis when banks, facing tighter regulations, reduced their lending activities. As a result, non-bank institutions stepped in to fill the gap, offering direct loans to businesses with fewer restrictions. Now, experts like Moody’s predict that the private credit sector will hit around US$3 trillion by 2028.

Australia is seeing similar growth in private credit. As of late 2024, the country’s private credit market managed assets worth around $200 billion AUD, up from $188 billion AUD in the previous year. As traditional banks have scaled back from certain sectors, non-bank lenders have stepped forward, offering home loans and other financial services. Private credit firms operate with more flexibility than banks, as they are not bound by the regulations of the Australian Securities and Investments Commission (ASIC). They can lend or invest with greater freedom, often providing significant loans to medium-sized businesses.

Recent Industry commentary, highlighted the trend of loans that were once central to bank lending but are now being catered externally to traditional banking services. With an aging population looking for higher returns than banks can provide, private credit has found position of growth. The combination of loan supply and capital demand has allowed the market to thrive. This is reflected in the enthusiasm of Australian investors, who are eager to tap into a market that promises substantial returns. Reflecting this, recent Mulitple US-based Capital Equity firms have expanded operations in Australia, raising multiple billions for a direct lending fund targeting Australia and New Zealand.

Its noted, the increase in private credit in Australia can be attributed to ongoing regulatory reforms, which have created more opportunities for deals that offer attractive returns. These changes in the financial landscape have made it easier for private credit to flourish, especially as banks have pulled back in pricing loans.

One of the notable beneficiaries of this growth is the broking community, which has found new opportunities in the expanding private credit space. The credit market is broadening beyond traditional real estate loans, with significant growth in areas such as equipment financing and small business loans. As banks retreat from these sectors, brokers are stepping in to fill the void, managing an increasing range of loan types and sizes.

Opportunities for brokers are particularly evident in the commercial finance sector. While brokers already handle a significant portion of the residential loan market (over 74% of home loans are arranged through brokers in Australia), the commercial market has been slower to embrace brokerage. However, this is changing, noting that brokers are capturing a growing share of the commercial finance market. Its revealed that increasing business volume comes via brokers, with more corporate and individual clients turning to brokers for commercial transactions.

The flexibility of private credit also benefits brokers by providing faster loan approval times. While a major bank might take three to four months to approve a complex construction loan, private credit lenders can approve loans in just four to eight weeks. This speed can be crucial for clients needing quick access to funds.

Private credit is also making inroads in sectors like auto loans and self-managed super funds (SMSFs), areas where banks have become less active. Banks are increasingly reluctant to offer non-resident home loans and SMSF loans, creating a gap that private credit lenders are keen to fill.

This growth mirrors trends in non-bank lending across both residential and commercial sectors, where traditional banks are pulling back due to regulatory and capital constraints. Non-bank platforms, such as Matrix, are stepping in to fill this gap and are experiencing significant growth.

The growth of private credit in Australia reflects broader trends in the financial sector, where banks are retreating from certain types of lending, creating new opportunities for non-bank institutions and brokers. As the market continues to expand, brokers have the chance to tap into new sources of capital and provide their clients with faster, more flexible lending options.

Private credit is an increasingly important part of Australia’s loan market, providing both borrowers and brokers with a wealth of opportunities. With its rapid growth, flexibility, and higher potential returns, private credit is set to play a key role in reshaping the Australian financial landscape.

At Matrix Capital Management, we specialize in flexible credit solutions to help brokers convert in 2025. Here’s how we can support your clients:

Our Offerings:

1st Mortgages: $500k - $5,000,000 | <80% LVR | Rates from 9.95% p.a.

2nd Mortgages: $400k - $1,000,000 | <80% LVR | Rates from 1.50% p.m.

Key Benefits:

Loan terms: 3-24 months

Unlimited cash-out for commercial purposes

Capitalised Fees and Interest for better cashflow

Asset-based lending with no serviceability tests

Broker commission paid directly to broker at settlement

Loans greater than $5m considered

BROKERAGE from 1.10%+

Because we control credit and source funding, we help directly with your credit scenario without the need of a back and forth credit bureaucracy!

Let’s talk about how we can grow your clients goals this year. Feel free to reach out. See our product sheet below. 

Contact us today on [email protected] or visit our website www.matrixcm.com