Arch Finance

Arch Finance is a non-bank commercial real estate (CRE) financier in Australia that provides interest-only mortgage funding to investor and owner-occupier borrowers, primarily sourced through commercial property mortgage brokers. Its lending covers three main categories: acquisition of commercial and non-coded residential investment properties (retail, industrial, office and specialised securities); debt refinance and restructure, often consolidating multiple lenders across multiple security properties; and cash-out or "leverage up" facilities for business purposes such as acquisitions, stock purchases, relocation and office fit-out.

Loan parameters published by the company include single-security loans of up to $7.5 million and multi-security co-lending of up to $25 million, loan-to-value ratios of up to 70%, terms of up to three years with rollover and typically no annual review, and variable or fixed pricing set off the 90-day bank bill rate. Lending is targeted at CRE property located in cities with populations greater than 100,000. The company states it employs experienced professionals across origination, credit underwriting and loan management, and that it is a wholly owned subsidiary of Qualitas Investments Pty Ltd (ACN 137 928 164).

Business model

Arch Finance originates and funds secured commercial real estate mortgages, lending against commercial, office, retail, industrial, specialised and non-coded residential security property. Loans are interest-only, with terms of up to three years and rollover, and are priced on a variable or fixed basis referenced to the 90-day bank bill rate, with LVRs of up to 70%. Larger exposures up to $25 million are written on a co-lending basis.

The company earns interest on the commercial property loans it funds, priced variably or fixed off the 90-day bank bill rate; upfront fees on broker-introduced loans are generally split 50/50 with the broker and a minimum 0.25% trail commission is paid to the broker.

Traction

The company reports having funded loans in excess of $2 billion since 1999. Published case examples include a three-year acquisition loan enabling a long-standing family motor-trade business to buy the retail premises it occupied from its landlord, the repayment of an existing bank loan through a debt refinance and restructure, and funding for a borrower relocating a business from Redfern to Alexandria while rolling over an existing loan.

Latest developments

The company's site markets interest-only commercial real estate loans of up to $25 million, cites 25 years in commercial property lending, and lists an origination and wholesale lending team across Melbourne and Sydney including a Head of Origination, a Director of Origination and a Head of Wholesale Lending.