Questions we're often asked

idutch is Australia’s first online marketplace for non-bank property lending, where borrower deals are intelligently matched to the best suited non-bank lenders. The matched lenders are then engaged in a reverse auction campaign, where they bid down on rate. The aim of this is to put the borrower first, by finding the best non-bank lender and the best rate.

idutch exists to be the champion of the non-bank borrower and to become the benchmark standard within the non-bank lending industry.

Otherwise known as a ‘Dutch Auction’ (now the name makes sense eh?), a reverse auction involves matched lenders bidding down on rate to arrive at the best possible terms for the borrower. 

The lenders each submit their initial first round blind bid, followed by a back and forth reverse auction over a period of time (usually 48 hours). The lowest rate eventually wins your business. 

 

We’re often asked “why the reverse auction?”. Simple:

  • idutch reverse auctions are engineered to encourage all parties to act effectively and efficiently – forcing non-bank lenders to put their best foot forward right away
  • This saves the client potential months of back-and-forth on pricing and terms between multiple lenders, as normal brokerage mandates
  • Furthermore, the auctions are conducted “blind”, meaning the non-bank lenders are forced to compete with each other, but never knowing who they’re bidding against – to avoid collusion or price-fixing.

The rest of the world has evolved to use technology to operate under the most competitive marketplace models. The idutch philosophy is to bring that thinking to the non-bank lending space.

A “blind” auction is an auction where the persons or entities bidding aren’t aware of who the other bidding parties are.

idutch has implemented blind auctions as a means to encourage competition and also to avoid collusion between parties with price-fixing. 

The borrower! Whilst idutch works closely with brokers and lenders, it’s ultimately in existence to service its borrower user needs. idutch will transform the non-bank lending industry, by fully prioritising the borrower.

It seems every second e-business claims to be “smart” in some respect – we get it, it’s an overused word. We promise there are real smarts behind the ‘smart’ in our smart-match technology. Specifically:

  • idutch has an elaborate on-boarding process with its accredited non-bank lenders.
  • The data and information we obtain from our non-bank lenders is very specific and incredibly personalised, allowing the idutch smart-match system to do more than execute a database match.
  • Rather, idutch has ongoing and valued relationships with its non-bank lenders, so that the iducth understanding of its non-bank lender appetites is always relevant and super-accurate.
  • The high-quality data and information is regularly updated and is matched to specific deal metrics using our clever algorithms

The true ‘smarts’ in our ‘smart-matching’ isn’t in the technology. Sure, our technology is fantastic, but it’s only as good as the data and information that it’s fed.

For that reason, idutch holds and maintains regular contact with its non-bank lenders.

All non-bank lenders on the idutch panel have been thoroughly vetted and approved by idutch. This means that idutch only deals with reputable and proven non-bank lenders. This takes the guess work out of which lender can be relied on from a borrower’s perspective.

Non-bank lending is the facilitation of debt between two or more parties, where the lender is not a conventional bank.

Yes. Non-bank lenders have been around for centuries. In Australia and other major financial cities, non-bank lenders represent a significantly large portion of the lending market.

Like any other market, it’s always recommended to use caution and deal with organisations that are reputable and established. To this end, idutch only works with non-bank lenders that it has accredited and on-boarded.

There are pros and cons for each:

  • Banks are undoubtedly able to offer lower interest rates
  • Non-banks are more flexible, faster and generally require less equity
  • For construction facilities, non-banks tend to have much lower presale requirements

In terms of practicality, dealing with a good non-bank lender is much like dealing with a bank, insofar as there will be a credit approval process, loan documentation and registration of securities.

Well that depends on how you define “cost” and “expensive”. In terms of a raw interest rate, banks will almost always have lower interest rates than non-banks. However, the true cost of capital calculation is a lot more involved and detailed. Specifically, one must consider the following (in addition to simply the interest rate):

  • Holding costs associated with using bank money (as non-bank money is typically much faster and thereby has lower holding costs such as interest, land tax etc)
  • Return on equity (as non-bank lenders typically have higher LVRs and thereby lower equity requirements)
  • Lower presales losses (as non-bank lenders typically have lower or no presales requirements when compared to banks. This means developers need to offer less discounted stock and thereby reduce unnecessary losses)

Bank money isn’t for everybody, and neither is non-bank money. It really depends on each circumstance. In the right circumstances, there’s no denying that bank money is more appropriate. In other circumstances, non-bank money is a clear no brainer.

Because you’re interested in taking advantage of non-bank lending criteria:

  • An appetite for certain lending that banks simply don’t have
  • You’re sick of slow service and want a quick solution
  • You want to cash-out or extend your LVR
  • You want to maximise your return on equity by increasing your leverage.

You want a more personalised experience with a lender

  • For one, banks don’t seem to be too keen on development lending these days
  • Banks have higher presales requirements (and you don’t want to take a haircut on preselling for the sake of meeting ridiculous presales targets)
  • Banks won’t leverage as high as you’d like, meaning you cant maximise your return on equity
  • You need to act very quickly and can’t afford to wait around for months for an answer from the banks
  • Your project has a unique and/or specialised flavour that banks simply won’t get