Some brokers educate their investors to contribute to loan syndicates. The benefits to the lender include:

  1. The investors are diversifying their risk. If their capital is fractionalised across multiple loans and interest on a particular loan goes unpaid, or capital return is delayed, the financial stress on the investor is thereby minimised.

  2. A syndicate will also allow investors to spread their exposure across multiple loans.

  3. Having multiple lenders involved in the same loan enhances lender due diligence as each lender has a slightly different approach.

  4. Allow access to a higher standard of loans to smaller investors. This is because there is more completion for loans under $2M. Therefore, being able to participate in loans for larger amounts leads to better risk reward ratios (lower loan-to-value ratio and higher class of borrower).

A Mortgage Syndicate can be written with a bare trustee (which Bransgroves can provide) or as contributory mortgages where each lender’s name appears on the Torrens title.

Bransgroves Lawyers has developed a range of mortgage syndicate structures which make it almost as efficient for a broker to write a loan with twenty investors, as with one investor. Contact us today to discuss how we can help you put together your syndicate.

Syndicates allow a loan proposal to be shopped around to a larger number of investors and a sense of urgency to be thereby created.

Generally speaking, brokers who use syndicates issue the Term Sheet and obtain the valuation before approaching