A NEW startup is looking to fix a “broken system” with the offering of fast and easily accessible bridging loans that allow homeowners to buy before they sell.
Newly-launched TechLend is offering borrowers same day pre-approval for bridging loans that of up to $3 million for up to six months, with no repayments required until maturity or earlier when the property sells.
Set-up costs start from 1.99% and loans are interest-free for the first 90 days.
TechLend is the brainchild of finance expert, now TechLend chief executive Aaron Bassin and mortgage broker Nick Jacobs after the pair became frustrated with the limitations of traditional home loans.
Bassin is the former head of strategy of ASX-listed MoneyMe and was integral in bringing the company to IPO in Australia.
“We are tapping into a part of the market that the traditional banks aren’t interested in leveraging, due to the short loan period and paperwork involved,” Bassin said.
“By providing affordable bridging loans to Australians, we are disrupting traditional lending to bring borrowers better outcomes, and take the stress out of buying a new property.”
A recent survey by consultancy Digital Finance Technology showed that more than 1.6 million households are planning to downsize over that period over the next five, suggesting that demand for bridging loans will be on the up.
Jacobs said Australian consumers in the property market were, until now, extremely limited by rigid and slow lending options.
“As a mortgage broker, I understand the frustration that comes with traditional lending solutions and the obstacles that many of my clients face when it comes to sourcing funding.”
TechLend’s received seed investment from Matt Leibowitz, chief executive and founder of Stake, Australia’s digital brokerage, and a pioneer of commission-free trading in Australia. It has raised nearly $5 million in total.
The non-bank lender also provides commercial property loans for up to 24 months.