$500mln facility will offer pre-development loans, residual stock loans and investment property loans
Pallas Capital has secured a major funding boost from Morgan Stanley for its latest Australian lending facility, Pallas Funding Trust No. 5 (PFT5).
Morgan Stanley is acting as the primary, senior funder in the $500 million facility, which Pallas Capital intends to deploy to small and medium-sized commercial real estate (CRE) borrowers.
The exact amount of funding supplied by Morgan Stanley was not disclosed.
PFT5 will focus on loans between $15 million and $35 million, but has the capacity to go higher for borrowers who meet certain credit standards. Pre-development loans, residual stock loans and investment property loans will all be on offer.
“This new facility strengthens our ability to offer more choice, more control and faster outcomes for commercial borrowers,”said Jason Arnold (pictured), head of origination at Pallas Capital.
Arnold continued: “It reflects our continued growth trajectory into 2026 and beyond, and further empowers our broker network, who account for the majority of our deal flow, to deliver highly competitive, tailored finance solutions for their clients.
“In a complex lending environment, we’re proud to provide the certainty and flexibility the market needs.”
Dan Gallen, Pallas Capital’s chief investment officer, said he is “delighted to announce our collaboration with Morgan Stanley”.
“This new facility will continue our targeted approach of providing flexible, well-priced CRE debt product to the less well serviced mid-market segment,” added Gallen.
Non-bank lenders like Pallas Capital are becoming an increasingly attractive financing route for small businesses that often struggle to secure loans from the traditional banking sector.
More than half of Australia’s SMEs are now planning to use non-bank lenders to support new investments, according to the latest SME Growth Index Report from ScotPac. That number was just 7% a little more than a decade ago.
Non-banks often have faster approval processes and more flexible lending criteria, although rates tend to be higher.
