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The addition gives LMG’s network of 6,000 brokers access to Msquared Capital’s short-term commercial lending products, which provide lending of up to 80 per cent LVR against residential, commercial, and industrial security.
The partnership comes as changing property values and tighter lending criteria place greater scrutiny on the security underpinning commercial transactions.
According to Msquared Capital, property values have fallen by as much as 10 per cent across some market segments, while valuation data can typically lag clearance rates by around 90 days.
At the same time, the lender said it was seeing increased scrutiny of leverage and exit strategies, creating additional complexity for brokers relying on property to secure commercial finance.
Valuations become a sticking point
Michael Volkiene, chief commercial officer at Msquared Capital, said valuations had become an increasingly important factor in whether commercial transactions progressed.
“Business conditions are challenging and changing quickly, and lending criteria is tightening without notice across the market,” Volkiene said.
“Brokers have a real opportunity to help clients act decisively in uncertain business conditions – and to back SMEs through growth scenarios that play out over the next six months to three years.”
Volkiene said a lender’s ability to assess property risk in changing markets had become particularly important as valuations fluctuated.
“In addition to property market expertise, we’ve got one of the most diverse and broad valuation panels in private lending – the household names that banks know and like to see,” Volkiene said.
“Because of our reputation and standing in the industry, we can often see a valuation reassigned so brokers can execute. That’s an absolute game changer – a winner for us and for the client.”
Recently, Volkiene appeared on Broker Daily Spotlight to discuss how brokers were adapting to tougher conditions in the commercial lending market, including by turning to faster and more flexible non-bank solutions.
Commercial diversification continues
Sam Allam, manager – commercial lender partnerships at LMG, said the addition reflected growing broker demand for lenders capable of handling complex transactions.
“In fast-moving market conditions, and facing even faster-moving lending policy, brokers need experienced lenders that understand the nuances that can delay a critical settlement,” Allam said.
Allam said conversations among brokers around commercial diversification were also changing.
“The conversation among brokers has moved from ‘why diversify’ to ‘how’. More brokers are coming to us with refinancing and working capital scenarios that need a partner who can move quickly and price transparently,” Allam said.
The panel addition comes as SMEs face tighter cash flow management and complex structures, mixed-use assets, and non-standard income continue to present challenges in commercial lending scenarios.
Allam said adding specialist lenders to the panel could give brokers greater confidence to take on more complex commercial work.
“Msquared Capital offers the exact commercial lending and property experience needed to help brokers guide clients through challenging business conditions,” Allam said.
[Related: LMG reveals AI roadmap focused on broker efficiency]
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