Operating from Melbourne, Victoria with a team of eight, Singh’s ambition is to educate the Australian market about second mortgages and, in doing so, redefine what the space can look like.
He says: “The three problems that we were trying to solve when we started the business was time to money, educating people in second mortgages, and creating an SLVR environment which is very simple, easy to follow, and then not needing to refinance – and having a structured serviceability or an exit strategy structure where you could fund these business or commercial uses of the equity which are clearly available.”
A bespoke approach to LVR
Central to Knote’s model is a proprietary risk assessment tool Singh developed specifically for the second mortgage space: the Structured Loan to Value Ratio, or SLVR.
Standard LVR works well enough for first mortgage lending, where a single lender holds priority claim over a property and recovery is relatively straightforward. But in a second mortgage scenario, that simplicity breaks down. The first lender is repaid before anyone else, recovery timelines are longer, and the overall risk exposure is materially higher. A standard LVR calculation, Knote argues, does not adequately reflect that reality.
SLVR addresses this by applying a structured buffer to the first mortgage balance when calculating total lending exposure. Rather than simply comparing the proposed loan against the property’s value, it factors in real-world recovery considerations – the costs of enforcement, potential delays, and the priority position of the first mortgagee – to arrive at a more honest picture of available equity.