Unlocking opportunities in near prime lending

As near prime lending surges, non-bank lenders are redefining the market with tailored solutions and flexibility, offering brokers and borrowers new opportunities to navigate life’s financial challenges

THE NEAR PRIME lending market in Australia has come a long way from its early days. With the continued rise of self-employment, increasing credit pressures and a shift in borrower needs, this segment is experiencing unprecedented growth. As we enter a new year, Australia’s non-bank lenders are gearing up to tackle growing demand in the near prime space, focusing on borrowers who don’t quite fit the traditional mould. MPA talks to four leading non-banks in this space – Pepper Money, MA Money, Bluestone and Resimac – to get their insights into the near prime sector’s evolution, the challenges it presents for brokers, and the opportunities it offers borrowers.

Non-bank lenders have cemented themselves as key players in near prime lending. Offering flexibility, innovative products and quicker decision-making processes, they often outperform traditional banks in meeting the needs of near prime borrowers. Tony MacRae, chief commercial officer at Bluestone, says competition has evolved significantly over the past few years, with an increasing number of lenders entering the near prime segment. With this surge, borrowers have access to more

For brokers, near prime lending represents not only a growing opportunity but also a responsibility. Many borrowers who could benefit from these products may not even realise they qualify – and this is where broker input becomes invaluable. As Lemon points out, “Brokers need to help clients understand what makes them a near prime customer and how their situation differs from prime borrowers.” Lemon notes that this missed opportunity often extends to brokers themselves, especially if they don’t stay informed on the latest offerings from the sector.

options than ever before, which translates to better pricing, improved product features and highly personalised policies. “Competition in the non-bank space is vital to ensure that the products available offer a solution to the challenges brokers and borrowers face in the current environment,” MacRae says. “Non-bank market share has increased, which means there are more ways to help customers with differing backgrounds. The value comes from speed, ease and flexibility. However, the banks will be looking for ways to capture more of this business, and solution-based lending options will continue to evolve.”

Chris Paterson, general manager – distribution and marketing at Resimac, says non-bank options are an “essential part of the near prime lending ecosystem in Australia”. He notes that while near prime products are becoming increasingly competitive, non-banks still lead the charge in this space, as few traditional players can match the service levels and tailored options that alternative lenders offer. “While mainstream banks can adjust their credit policies and appetite, non-bank lenders will continue to hold a strong position in the near prime market,” Paterson says. “The combination of personalised BDM support, flexible credit policies and competitive interest rates ensures that non-bank lenders remain highly relevant, even if mainstream banks adjust their offerings in the near prime space.”

Resimac Group is a leading alternative lender for residential mortgages and asset finance in Australia, with a broad suite of competitive, award-winning products that cater to diverse customer types and needs. As a multichannel distribution business, Resimac Group has direct-to-consumer brands, brands that are distributed via a third-party network of more than 12,000 brokers, and relationships with wholesale partners.

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MA Money is one of Australia’s fastest-growing non-bank lenders, surpassing $2 billion in loans under management in December 2024. The company offers flexible, tailored lending solutions for brokers and borrowers, including residential loans, vacant land loans, SMSF loans, expat loans and non-resident loans. Backed by MA Financial Group, an ASX-listed global asset manager, MA Money is committed to delivering fast, efficient service and custom solutions to meet the unique needs of its clients. With a focus on innovation and continuous improvement, MA Money has become a trusted partner for brokers and customers across the country.

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“There is a risk of missing out on deals if brokers don’t fully understand these products,” Lemon explains. “For example, a client looking to purchase six units in one building may qualify as a near prime customer, and failing to recognise this could mean losing the deal.” Education is a recurring theme, and all four lenders emphasise its importance. MacRae highlights the role of brokers in guiding clients through their journey, with a focus on long-term improvements. “With a near prime product, the broker needs to educate their client on the long term,” MacRae says. “They need to be there with them on the journey to a prime product, ensuring customers understand why they are in their current situation and that they need to manage their conduct well to evolve to a mainstream or prime product quicker.”

Pepper Money is one of Australia and New Zealand’s leading non-bank lenders. It was established in 2000 as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers that were being turned down by traditional lenders. Today, Pepper Money has a broad product offering of loans that help people succeed across a lifetime of changing situations – from first car loans to personal loans, residential home loans, asset finance, commercial real estate and novated leases in Australia, and residential home loans in New Zealand. For more information, visit www.peppermoney.com.au.

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“Competition in the non-bank space is vital to ensure that the products available offer a solution to the challenges brokers and borrowers face in the current environment”

Tony MacRae, Bluestone

A real estate agent at his desk showing houses for sale on the computer to a couple

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says. “There has also been a rise in refinancing for ATO debt as tax collection efforts ramp up, and we’ve seen more demand for refinancing interest-capitalised facilities, such as construction loans. Overall, the focus is certainly shifting.” Barry Saoud, general manager mortgages and commercial at Pepper Money, notes that economic uncertainty and strict bank lending criteria have been pushing more people into the near prime space. The good news is that with increased access to tech and data analytics, alternative lenders are in a better position than ever to offer the flexibility that borrowers need. “Using technology to better assess creditworthiness means more personalised loan options to help a wider range of borrowers obtain approval,” Saoud says. “Plus, we can expect more competitive interest rates and flexible repayment plans if the RBA drops the cash rate in 2025.”

The future of near prime lending in Australia looks bright, as non-bank lenders continue to innovate and adapt to the changing needs of borrowers. With economic pressures pushing more Australians outside traditional lending criteria, near prime products are becoming a vital bridge for those seeking to consolidate debts, refinance or secure funding despite unique financial circumstances. Paterson points out that the ongoing rise in self-employment will no doubt create growing demand for near prime products in 2025. “A primary driver for demand of near prime loans is the ongoing

“Brokers need to help clients understand what makes them a near prime customer and how their situation differs from prime borrowers”

Tim Lemon, MA Money

Changing borrower demographics, evolving financial needs and the aftermath of a global recession – all these factors mean that the ‘non-traditional’ borrower base is growing. As the sector matures, near prime loans are no longer just about borrowers with past credit issues. The sector now encompasses a wider range of borrowers navigating complex financial situations, from the self-employed to those struggling with the cost of living. Tim Lemon, national sales manager at MA Money, says there has been a particularly notable increase in self-employed borrowers entering the near prime market. “We see these borrowers with short-term ABNs seeking finance,” he

Industry experts

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Stewart Saunders

Heritage Bank

Darren McLeod

Beyond Bank

Fernando Lemos

Bank Australia

Industry experts

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Bank Australia

Fernando Lemos

Beyond Bank

Darren McLeod

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Stewart Saunders

Heritage Bank

Darren McLeod

Beyond Bank

Fernando Lemos

Bank Australia

Industry experts

Bank Australia

Fernando Lemos

Beyond Bank

Darren McLeod

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

Meeting diverse borrower needs

Tim Lemon

MA Money

Tony MacRae

Bluestone

Chris Paterson

Resimac

Barry Saoud

Pepper Money

Barry Saoud joined Pepper Money in July 2021 as general manager, mortgages and commercial lending and is responsible for strategic direction and operating performance across product, credit and settlements sales functions for Australia and New Zealand mortgages, commercial loans, personal loans and direct sales. With over two decades of experience in the financial services sector, Saoud has held numerous roles across legal, company secretary, sales and product management at the likes of Aussie (Home Loans), GE Capital, HSBC and Norton Rose Fulbright. He is a passionate leader with a track record of rapidly growing businesses and exceeding targets through innovative strategy and effective execution. He has deep expertise in mortgages and a proven ability to lead organisational change, and brings a strong sense of customer focus to the teams he leads.

Pepper Money

Barry Saoud

Chris Paterson is an accomplished professional with over 15 years of senior experience in the banking and financial services industry. He currently serves as general manager, distribution and marketing at Resimac. Paterson has extensive expertise in residential mortgages, managing the full loan life cycle from product development to funding, distribution and operations, while overseeing offshore processes and teams. His leadership is marked by strong collaboration and dedication to driving business initiatives. With deep experience of working with brokers, Paterson has built a reputation for fostering strong relationships and ensuring effective stakeholder engagement.

Resimac

Chris Paterson

Tony MacRae assumed the role of chief commercial officer at Bluestone in August 2023, bringing with him a wealth of experience in financial services, including a decade at Westpac Group as acting CEO of RAMS and GM third party distribution at Westpac. MacRae has an industry-wide reputation for successfully executing sales initiatives, driving strategic direction, building partnerships and leading teams to strong business growth. He leads Bluestone’s efforts to ensure its broker partners are best positioned to help more customers. For the last 11 years, MacRae has been a board member and treasurer of the Royal Flying Doctors Service South Eastern Section. He has a Bachelor of Economics from Macquarie University.

Bluestone

Tony MacRae

With over 20 years of experience in the finance industry, Tim Lemon is the national sales manager at MA Money. He leads a skilled sales team that has achieved strong growth over the past 18 months. Lemon is known for finding creative lending solutions that help brokers and their clients succeed. His background in business development at non-bank lenders has equipped him to handle complex financial scenarios. Lemon’s focus on building lasting broker relationships and delivering results defines his approach to the role.

MA Money

Tim Lemon

Seizing opportunity as a broker

Published 18 Feb 2025

“Brokers should focus on building strong, collaborative relationships. This includes understanding each lender’s specific requirements and processes and ensuring that all client applications are complete and accurate”

Barry Saoud, Pepper Money

“Great brokers, like the ones we work with, take the time to thoroughly understand their clients’ situations and navigate the process efficiently. By investing the extra effort up front, they ensure the best possible outcome”

Chris Paterson, Resimac

Since 2000, Bluestone Home Loans has been helping Australians achieve homeownership, no matter how complex their financial journey. We specialise in flexible lending solutions for those who don’t fit the traditional mould, from self-employed borrowers to those with imperfect credit or seeking niche options. By partnering with mortgage brokers, we open doors for borrowers who may otherwise be overlooked. We believe unique circumstances shouldn’t stand in the way of owning a home. Every borrower has a story, and we’re here to listen, adapt and provide lending solutions that help more Australians build their future with confidence.

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of brokers’ customers are self-employed

40%

Sources: Resimac Broker Experience Survey (2021)

The rise of non-traditional borrowers

Almost

of Australians are independent contractors

Almost

Borrowers with non-traditional employment (part-time, commissions, overtime, second jobs, etc.)

Sources: Resimac

Near prime loans: Who are they for?

Those with past credit issues, including bankruptcies and defaults

Individuals with self-employed income

Competition heating up in near prime

For brokers, working effectively with lenders is key to unlocking these opportunities and can be the difference between a seamless loan process and unnecessary delays. Saoud says it’s not just about knowing a lender’s policies – it’s about building an authentic relationship based on trust. “Brokers should focus on building strong, collaborative relationships. This includes understanding each lender’s specific requirements and processes and ensuring that all client applications are complete and accurate.

“Technology is also creating remarkable opportunities in near prime lending,” he adds. “Brokers should leverage technology to streamline application submissions and track the progress of each loan, ensuring a smooth and efficient experience for both the client and the lender.” Despite the incredible flexibility that near prime products can offer, Paterson encourages brokers to stay vigilant when assessing each client’s situation. He notes that near prime products can require more information and work to complete compared to prime loans, and brokers should take extra care to ensure that they’re securing the best possible outcome. “The key difference lies in understanding the customer’s unique circumstances,” Paterson explains. “Great brokers, like the ones we work with, take the time to thoroughly understand their clients’ situations and navigate the process efficiently. By investing the extra effort up front, they ensure the best possible outcome for their clients, which makes all the difference in securing the right solution.”

The future of near prime lending

alternative lenders remaining on top of their game. Saoud says non-banks play a vital role in the market, but with traditional lenders increasingly eyeing near prime market share, continuous innovation is vital. “Non-bank lenders’ flexibility and innovation will remain key advantages, allowing us to maintain a strong presence in the near prime space,” he says. “We often have the ability to tailor our products more specifically to customer needs and can adapt more quickly to market changes. This agility can be a crucial factor for us retaining our market share in this segment.”

desire among customers to improve their financial situation, particularly when it comes to their cash flow,” he says. “We recognise the growing opportunity for people to refinance and improve their financial situation, especially as the number of self-employed individuals continues to rise.”

As the market evolves, flexibility and tailored solutions will remain the hallmarks of near prime lending. Lemon sees the sector expanding into new niches, such as lending to expatriates and SMSF borrowers, as well as providing further support for those with short-term ABNs or interest-capitalised facilities – all areas in which brokers can add value for borrowers. “The near prime space is definitely becoming more competitive, with more options now available to customers,” Lemon says. “Five years ago, there were around six lenders in this market; today, that number has grown to 10–12. Each lender has unique niches that cater to different customer needs, so it’s crucial for brokers to build a solid understanding of these differences to match clients with the right solutions.” In the non-bank space, staying competitive will depend on

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