Mortgage Professional Australia Magazine article about why transparency in private lending matters for brokers.

By Bennett Richardson, 18 Mar 2025.

Brokers play a crucial role in connecting borrowers with lenders. However, the success of these transactions relies heavily on trust, clarity, and open communication.

“Transparency in private credit is essential for brokers, as it impacts their reputation, client relationships, and long-term business growth,” Nick Reardon (pictured), head of origination at Woodbridge Capital, told Mortgage Professional Australia.

“Clear, honest, and straightforward dealings benefit all parties involved—brokers, lenders, and borrowers,” he said.

There has been much discussion regarding transparency in the private credit, non-bank lending space in the last 12 months, culminating in the late February release of the Australian Securities and Investments Commission (ASIC) report Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets. While this report is generally focused on the opacity of the private capital markets space for investors, there are key takeaways for the broker market.

Growth of private and non-bank lenders

The number of private credit lenders operating within the Australian market is growing. This is driven by increased borrower appetite and an influx of capital. The commercial real estate sector  has become widely accepted by investors for its strong risk-adjusted returns and fixed-income offerings, leading to strong capital inflows from both onshore and offshore investment networks. Borrowers are also turning to private credit to fund their projects as it offers more flexibility, faster turnaround times, and more compelling solutions when compared to the major banks.

There are private lenders that specialise in smaller loans, from $1m to $10m, some that focus on the middle market with loan sizes between $10m to $50m, and then larger funds that only consider deals with a minimum size of $100m.

“While this increase in the number of lenders is good for competition, providing borrowers more options, it is paramount that the lending solution provided is fully transparent,” Reardon said.

Regulatory oversight and ethical considerations

Private credit lenders face regulation through both the Australian Prudential Regulation Authority (APRA) and ASIC and are expected to have robust compliance frameworks in place. However, these regulatory requirements do not govern how lenders are required to act in all situations.

“This makes it critical for brokers to understand the differences between lenders and avoid subjecting their clients to poor experiences where possible. As a lender, we often see and hear of hidden fees or terms and conditions within loan agreements that the client was not fully aware of when taking out a loan,” said Reardon.

Reardon also noted that it is important for a broker to understand the different ways a lender will act when things do not go to plan for their client. For example:

• At what stage will the lender step in and take over an asset?

• Do they charge default interest at any and every opportunity?

• How long does a borrower have to remedy a breach of one of their conditions?

• Are the covenants within the loan agreement achievable, or is the client being set up for failure from day one?

“These considerations highlight the importance of quality advice in the private credit industry,” he said.

“For a broker to be successful and provide compelling solutions for their clients, they must know how various lenders compare. They need to be aware of each lender’s specific niches and be confident that when they refer a client, the client will be treated fairly and transparently.”

Building trust with clients and strengthening competition

Trust is the cornerstone of any financial transaction, and private credit is no exception. Brokers act as intermediaries, and their clients—both borrowers and lenders—rely on them to facilitate deals that are fair and beneficial to all parties.

When brokers can confidently compare all loan terms, fees, and potential risks, and present these to their client, the client is able to make a decision that will best suit their needs.

“In order for brokers to do this, it is necessary for the lenders to act transparently and be clear in their communication,” said Reardon.

In a competitive industry, a broker’s reputation is one of their most valuable assets. A transparent approach to lending enhances credibility and attracts more clients.

Reputation spreads quickly in the financial industry. Clients who have positive experiences are likely to share their experiences with others, leading to word-of-mouth referrals and increased business opportunities. Transparency, therefore, serves as a long-term investment for both brokers and lenders.

Improving client satisfaction and retention

“Borrowers appreciate clarity, honesty, and openness in financial transactions,” said Reardon.

When brokers are armed with accurate information and can explain loan terms and answer questions they create a positive client experience. Satisfied clients are more likely to return for future financial needs and refer others to the broker’s services.

A key part of a lender’s job is to provide education to the market, and many lenders embrace this responsibility.

“Brokers should actively engage with lenders to better understand lending structures, regulatory requirements, and the nuances of different loan products.”

This knowledge empowers brokers to make well-informed recommendations, ultimately benefiting their clients and the industry as a whole.

Transparency matters

Transparency in private credit is not just a best practice—it is a necessity long-term success. By fostering trust, ensuring fair lending practices, complying with regulations, and minimising risks, lenders can enhance their reputation and build strong client relationships.

“Ultimately, transparency benefits everyone in the private credit ecosystem, creating a more ethical and sustainable industry. Lenders who prioritise openness and honesty will find themselves better positioned for growth, success, and credibility in the evolving financial landscape,” said Reardon.

“Brokers who ask the most questions of lenders and get to know the lending practices of who they refer their clients to, will be best placed to serve their clients.”

The Woodbridge team has a track record spanning over 30-years across property finance, real estate investment, development and construction and have deployed and managed over $5 billion of loans over the past 10 years with zero loan impairments. Woodbridge was born out of a desire to be different, in an industry that is notoriously opaque and brings something new to the private credit industry - transparency. We are experienced lenders and are transparent in everything we do. All borrowers have direct access to the decision makers, and we provide transparent loan terms and timing from initial discussions to financial close.