Aussie private lender Sparrow Loans approved for $50m funding facility

Ulrika Lobo, Director of Sparrow Loans

Sparrow Loans has secured a $50m institutional funding line, reinforcing investor confidence in the business’ expansion plans and reflecting the opportunities available in the private debt industry. Sparrow Loans is Australia’s first female-founded private lender, directed by Ulrika Lobo. Since starting her business during the height of the pandemic in March 2020, Ulrika built a $17 million portfolio that has generated over $1.5 million in income for investors.

What does the facility mean for Sparrow Loans?

“This is a space full of challenges and opportunities, where maintaining relationships and handling expectations are key,” says Lobo. Private lending is a mature yet growing field in Australia, with both individual and institutional investors only just realising its potential.

“Securing this new funding line was an essential next step in Sparrow Loans’ evolution. It opens up so many doors, allowing us to fund property investors, developers, and small to medium businesses,” further said Ulrika. The business sees nearly $200 million worth of referrals in deal flow per annum, which it can now start funding with this additional capital.

The process was rigorous, including extensive due diligence on the business’ financials and management team. Passing these criteria showss Sparrow Loans’ strength and the strength of its vision moving forward, especially in an uncertain market. Institutional investments are only extended to low-risk, high-potential companies with a strong management team.

What is the Aussie private lending facility landscape?

The private lending industry has achieved staggering growth over the past half-decade. Banks with restrictive lending criteria and inflexible loan terms have created a space for private credit to boom. This will continue as the RBA raises the cash rate and banks begin tightening their serviceability under the squeeze. In private debt, you can achieve net returns of around 9%, making it a competitive alternative to long-term equities that return around 9 to 10%.

“In effect, you realise the same returns as equities with a tenth of risk, which should give prospective investors confidence,” Ulrika further commented. Ulrika has nearly a decade of experience in finance, underpinned by an MBA and a Master of Finance. She was also recognised as Western Sydney Women’s Entrepreneur of the Year in 2021 and awarded ‘Finalist’ for Director of the Year in Women in Finance’s 2020 and 2021 awards.