As parts of the private credit market chase higher yields through riskier lending, Guardian Financial remains committed to first mortgage loans with low LVRs — a proven strategy delivering consistency, capital preservation and zero arrears in our June 2025 results.
Not all private credit funds are created equal. This statement has become increasingly relevant over the past decade in the evolving Australian private credit market. Historically, most private credit funds focused primarily on property based lending, mostly through first mortgage loans. These types of loans were generally regarded as lower risk due to the security provided by tangible real estate assets and conservative LVR’s.
However in recent years the landscape has shifted. A growing number of private funds are now extending credit against business balance sheets and end value construction valuations. While there is undoubtedly a place for this type of lending in a diversified market, it inherently carries a higher degree of risk. Unlike traditional mortgage backed lending, business and construction relies more heavily on the performance of the borrowing entity which can be influenced by volatile market conditions, operational challenges and sector driven downturns.
This shift in lending focus has not gone unnoticed. Publications such as the Australian Financial Review have reported on rising concerns within the industry, including indications of potential or pending losses across several funds that have ventured into higher risk lending territories.
At Guardian Financial we remain steadfast in our conservative approach. We “stay in our lane” by concentrating solely on first mortgage loans with lower LVR’s. This disciplined strategy minimises risk and ensures that we lend against assets that have a strong underlying value and are readily saleable.
The strength of this approach is evident in our June 2025 performance results which proudly reported nil arrears across the entire book, a testament to our commitment to responsible lending and long term stability.
