With Global Financial crisis (GFC) behind us and the economy begins to pick up after a tumultuous year, it is time for banks to watch their tight lending criteria by interpolation.
Loan conditions magazines that came into place in the midst of the crisis continue to make it difficult for people to borrow and for business.
Lack of access to funding and lending restrictions resulted in fewer developments and many planned projects-such as the vision of $ 1 billion in Brisbane CBD-being shelved.
So as the real estate market, small and medium-sized enterprises (SMEs) are finding it hard to stay afloat, and individuals have begun to suffer and become harder to personal loans, domestic and corporate.
In the 12 months to September 2010, new home loans are expected to have fallen to $14,4 billion. In 2009, the revenue figures approved for investors remained 30% below pre-GFC investments.
From the point of view of an individual, it has been suggested that banks should start looking at individual facilities and assessment of loan applications on the substance, rather than the broader perspective. Even those with a good credit history and a good long-term relationship with banks are finding it hard to get approved for a loan, despite their history. Maybe its time for banks to evaluate the differences between smart people with good credit history against those who are more reckless with their money.
For SMEs, many have failed to see the rate cuts on the same level as mortgage holders and also face long delays in getting new loans. Companies that are already in difficulty, as well as companies that have received funding during the last boom, are required to make worse. But as we move further in 2010, the good news is the average number of SMEs with a decent case study now are able to find funding, provided that aims to satisfy the rigorous criteria of banks.
In some respects, if lending policies are lifted, we could see is a trend similar to that of water restrictions imposed in the past.
At the end of 2007, Brisbane was faced with water restrictions 6 level. While this meant that we couldn’t enjoy life we’d once, also opened people’s eyes to the consequences of past excesses. Although now facilitated these limitations, many of us are used to live our lives as if these restrictions are still in place. Having restrictions made us aware of the situation, we’ve become more responsible and we learned to appreciate the resource.