DomaCom secures $50 million non-bank lending for SMSFs
DomaCom Limited has announced that it has partnered with La Trobe Financial to provide property investors using DomaCom’s fractional property investment fund with a credit facility.
An initial $50 million facility has been provided by La Trobe Financial that will allow investors to acquire around $100 million of leveraged property through the DomaCom Fund.
The facility will provide up to 60% leverage for investors and Self-Managed Super Funds (SMSFs) at a competitive 5.99% pa.
Enabling the use of lending when purchasing investment properties is a key addition to the DomaCom product offering, which places the Company in a strong position to almost triple its Funds Under Management to $150 million.
DomaCom CEO Arthur Naoumidis said: “This is a significant development for the Australian property investment market as financial advisers can now leverage their clients’ investment properties at a click of a button.
"We’re delighted to have the final piece of the jigsaw (debt) in place for DomaCom – we have bought over 50 properties to date where almost all are without debt and we are excited to be able to offer advisers ready access to competitive SMSF lending.
"The availability of this initial $50 million debt facility has cleared the remaining obstacle for DomaCom.
"After many patient years we are now well placed to take our platform to financial advisers and the SMSF sector, with available debt and legal certainty."
Chris Andrews, chief investment officer at La Trobe Financial, said the SMSF sector continues to grow.
"With more than one million Australians having turned to taking more control of their own super, the growth of the SMSF sector continues," Andrews said.
“As a specialist in the SMSF lending space since 2009 we are happy to partner with DomaCom to assist borrowers obtain that much needed SMSF finance for property investment purposes.
"SMSFs have a significant influence in the overall growth of the $2.3 trillion Australian superannuation industry, with SMSF assets growing by $319.7 billion or 55% in the five years to December 2018 at $726.46 billion in AUM.
Andrews said this sector expansion is expected to continue to have an important role in asset allocation debates in the retirement industry.
"The majority of the 587,092 SMSFs are formed by self-employed business people who are astute and understand investment risk - having often run their own businesses.
"They have a bias towards asset classes with low volatility and assets that have longer term (10+ year) investment horizons and to this end property is eminently recognisable and understandable for SMSF investors.
"Currently there is only $42.85 billion of limited recourse borrowings (5.9% of total SMSF Assets)”.
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