Jadig Launches New Offering
The Jadig Team
Keeping it Simple: Jadig Launches New Offering as featured in The Urban Developer
Henry Wadsworth Longfellow is quoted as saying that “in character, in manner, in style, in all things, the supreme excellence is simplicity”.
The team behind one of the newest offerings in property financing would agree, so much so that that keyword, simple, is its name.
Simple Property Loans is a new product from the Jadig family office, based in Melbourne.
Founded in 2010 by Jack Gringlas, Jadig is very much a family business, with son Adam now managing director. “We are heavily invested in the property sector as a real estate developer and investor but predominantly as a financier today,” Adam said.
“Jadig Finance is known as a passionate, pragmatic alternative property lender, focusing on the sub $20-million commercial real estate debt market.”
“Our capital is sourced by our family balance sheet and a group of high-net-worth individuals who co-invest alongside us on every transaction we originate.”
“We have long-term and solid relationships with developers, property investors, commercial and residential brokers and consultants—we’re predominantly what you’d call today a funds management business.”
Adam said Simple Property Loans was a little bit different to what was available in the market yet born from the same DNA of Jadig.
He said what was unique is that Simple offers private credit in the sub $2-million commercial debt market.
This sector is “deemed to be less appealing and less interesting to family offices, who are all tending to want to fund larger transactions and bigger developers,” Adam said.
“We’ve gone counter cyclical, to focus on the smaller, simpler side of the market, where we see a lot more volume.”
“There are also a lot of very interesting and appealing transactions and opportunities to work with like-minded brokers and property people who are still lacking options when it comes to their credit in this space.”
What’s in a name
Adam said the name of this new offering truly summed up what it was all about.
“Simple Property Loans is everything that the name encompasses—we don’t finance construction, we don’t do equipment finance, leasing, payday lending or anything along those lines.”
“It is purely property loans for business purposes in a strictly first mortgage capacity.”
“We chose that name because we think the industry, particularly in this smaller side of the market, makes it overly cumbersome and overly complicated.”
“All our application forms are done online, it takes a few minutes to fill in the application, there’s nothing you need to print, there’s nothing you need to sign, and there’s nothing you must get certified to be able to apply.”
“That application is picked up and responded to by a member of the Simple or Jadig team within hours.”
“And an indicative proposal for a loan or is provided within 24 to 48 hours and, if acceptable to the sponsor, drawdown and settlement of a loan can be done within seven days.”
Adam said Simple takes a pragmatic solution to verification of income, which extends to no tax returns and no financial statements, but rather an accountant’s letter and an A&L. “If that can’t be satisfied, we simply prepay the interest for the term.”
Organic growth is the aim
After the concept was conceived last summer, the idea was worked up ahead of Simple being launched to the market in September.
Adam said Jadig’s plan was to take its time with Simple.
“The intention is not to take the world by storm and do a billion dollars in lending in the first year,” he said.
“Rather, it is to slowly and organically grow our exposure and our deployment to the industry as we make more relationships with the right brokers predominantly, who can use the product and understand the product.”
With such a specific service on offer, Simple was launched to serve a specific market.
“It’s predominantly for the person who needs a sub 65 per cent LVR commercial loan for a business purpose, for six, 12 or 24 months—they’re not looking for five to 30-year loans, they’re looking for a solution that can help them move and keep growing their business,” Adam said.
“We’re focusing on the character of the sponsor, the quality of the property collateral, the ability for interest payments to be serviced, and the ultimate principal repayment to be met upon maturity.”
“We call that boxing that risk. If we’re comfortable that all those risks can be mitigated, and it’s a good application, it meets the criteria that Simple has on the website, you’ll get the loan.”
One rate for all
Adam said that even in today’s market of rising interest rates, Simple was steadfast in remaining a fixed-rate product.
“We only offer loans at one headline interest rate, which is visible on our website.”
“We don’t have multiple products with different interest rates that are variable, and it doesn’t change based on application. If you meet the criteria, you get the loan at that rate.”
In addition, the product offers all the borrower-friendly conditions you would want in a loan, no minimum terms, no break fees, and no hidden costs.
For the property finance sector in Australia right now, the need for such an offering is potentially huge, Adam said.
“There’s stuff like this being written every day,” he said.
“Brokers are sitting with their clients and giving them options. And each option has drawbacks.”
“Simple is a great extra option they can put on the table.”
“And that’s what we are saying to the broker network—we don’t need to see all your deal flow, all we want to know is that when you’re speaking with your client, and you’re trying to find them the best outcome for their problem, that Simple is an option at the table.”
“Because we think it’ll meet more than less.”
Read more about Simple Property Loans here.
As featured in the Urban Developer - 1 February 2023
