Source Funding has written about $2 billion worth of loans many to SMSFs which major lenders, with their “cookie-cutter” approval processes, often avoid.

Source Funding is carving out a niche providing property loans to customers the banks aren’t keen to serve, if at all.

The securitised lender provides self-managed superannuation fund loans, loans to the self-employed, low-doc loans and loans to expats.

“We excel where the banks are under-serving or not serving the market at all,” says founder and executive chairman Peter James.

For instance, if a customer goes to a bank for a self-managed super fund loan, approval can take months, which can often mean that the investment opportunity for the SMSF has passed.

James says Source Funding can give a conditional approval within 10 minutes and if a mortgage broker uploads the required documents into its system by midday, they can approve the loan by 5pm.

The business doesn’t take inquiries from retail clients. Instead, it provides finance to property buyers via mortgage managers, which James says are halfway between a broker and a lender. They manage and provide loans on behalf of a lender.

James had also previously founded a mortgage manager – Mortgage Ezy – and it was his frustration at getting poor service from lenders that prompted him to found Source Funding.

Sitting at number nine on the Financial Review Fast 100 List, the lender’s revenue has grown impressively, from $5.8 million in the 2023 financial year, to $21 million the following and to $32 million in the 2025 financial year.

But its growth since then has been even more impressive. Last year it was writing about $20 million a month in loans and that figure has increased tenfold to around $200 million a month this year, James says.

Another differentiator is maintaining service quality as it writes a higher volume of loans. Other lenders manually process loans, so when they get busy service levels dip, says James.

Source Funding uses its own decision engine box, which it calls DEB.

It uses artificial intelligence to speed up the loan application process that mortgage brokers carry out on behalf of their clients. The AI cuts down on the number of repeated entries a broker needs to make – for instance, entering an address just once.

AI also does a lot of things a credit officer would do manually. It searches for properties on RP Data and does an estimated valuation and rental opinion. It also searches for ABN.

Source Funding has written about $2 billion worth of loans and has so far funded its lending with warehousing facilities from banks – similar to a giant credit card it can draw on as needed.

But it will issue its first bond next year for about $500 million worth of loans and James expects it will do one or two such issues a year from now on.

James says major banks have a “cookie-cutter” approach and credit scores to approving loans for SMSFs so that they can process as many as possible.

Source Funding looks more carefully at each loan application and so can lend to SMSFs that banks might not.

“We take a more individualistic approach so that we’re looking at, you know, the whole loan and the whole situation, rather than trying to fit a round peg into a square hole, so to speak,” he says.

Original article from afr.com

Peter James, founder and CEO of Source Funding.

One company experiencing rapid growth is Source Funding, established by industry veteran Peter James, who founded the three-time AFR Fast 100 Winner Mortgage Ezy. After 25 years building Mortgage Ezy, James realised his mortgage management company was “only the meat in the sandwich”, an agent for banks and with no control over the quality of service they ultimately delivered to clients.

“We had no control over those third parties, not just the lender itself, but the lenders’ panel of valuers and solicitors,” James says. “They were all controlled by the bank. We couldn’t do anything to improve the time frames that we promised, which defined our ethos.”

Radical speed of loan approval using proprietary, cutting-edge software and superior customer service is now Source Funding’s clear points of difference. The company started lending to customers in November 2021 after securing its first financial “warehouse”, a short-term credit facility set up to establish a portfolio of debt assets that can then be sold to investors.

Over its first three years, the company lent an average of $25-30 million per month. With its first bond issue imminent and a surge of broker interest, lending volumes have soared, rising more than sixfold since July 2025, James says.

The engine for Source Funding’s efficiency and growth is its proprietary AI-driven platform that James affectionately calls “DEB” – the decision engine box. DEB eliminates mundane tasks, accelerating the loan application processes and enabling Source’s 23 employees to deliver the best possible customer service.

“What DEB does is cut down to about a third the number of inputs that a mortgage broker would generally do,” he says. The result is transformative for both brokers and borrowers dealing with important deadlines. The system enables Source Funding to deliver an online conditional loan approval to a borrower in less than 20 minutes. This process can take days with a traditional bank.

Following conditional approval, Source provides a guarantee currently unmatched in the Australian mortgage market. “If we have a fully completed file by 12 o’clock, noon, we guarantee to approve or otherwise decide on that loan by close of business that same day,” James says.

Investing in a greater customer experience

Consumers are turning away from the big banks to non-banks and brokers because they feel they are getting a wider choice of lending products, better service and greater consideration for their individual circumstances, says Sales from Outsource Financial.

Under the Corporations Act 2001, all mortgage brokers in Australia are required to act in consumers’ best interests. “Under this ‘Best Interest Duty’, whatever products a broker recommends must fulfil the wants, requirements and needs of the client,” Sales says. “This means each broker must shop around and be across all the lending products available.”

In contrast, the major banks that lend directly to consumers are not bound by the Best Interest Duty. “This means, in practice, when people go into a local bank branch, that bank can only offer its products. So, one would question: is the consumer getting the best deal?”

For Source Funding, it means hundreds of consumers a month are choosing it as their lender rather than the banks. “We are seeing a continual need, embraced by those clients who have been deserted by the banks and are hamstrung with poor service by other non-banks,” James says. “So, it’s a great way to measure our success by all the people who have come over to us, who are voting with their feet.”

The consumer endorsement has been the perfect catalyst for the company’s continued growth, which has placed it on the AFR Fast 100 list in its own right.

“Lending volumes have exploded to now reach over $200million a month,” James says. “Our same-day guarantee is a game-changer for any type of loan, and that’s because we’ve continually invested in AI, automation and digital customer experience.”

Original article from afr.com