As traditional banks retrench under capital standards and APRA caps, a massive liquidity shift is underway. For the modern broker, private credit is no longer a last resort—it's a critical tool for client certainty.
"In Australia, the non-ADI mortgage volume jumped by 25.3% in 2025, compared to just 3.9% for major banks."
Bank Retrenchment: APRA’s DTI caps and tighter capital standards are forcing traditional lenders to pull back from riskier or "non-standard" complex loans.
The Opportunity: Private credit lenders evaluate borrowers on a case-by-case basis, creating flexible covenants that algorithm-driven banks simply cannot match.
A resilient financial system requires different institutions for different risk profiles. Here is where the volume is flowing.
No APRA DTI caps; Speed of execution is the cornerstone advantage for 2026.
Maintaining lowest interest rates but withdrawing from complex SME and multi-property deals.
Record inflows due to structural resilience to global credit cycles.
Providing crucial exit options and portfolio management for established lenders.
Brokers who offer "Certainty of Execution" will win in 2026. This means running parallel conversations with private lenders and banks simultaneously.
Tom's Pro Tip
"Don't wait for a bank decline to look at private credit. The lag time alone will kill your client's deal."
Identify if the borrower hits "Bank Walls" (DTI > 6x, complex SME income, or multi-property exposure).
Submit to the Tier-1 lender for rate, while initiating a private credit term sheet for certainty.
If the bank stalls or adds onerous conditions, pivot to the private lender to secure the asset. Refinance later if appropriate.
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