A clear exit – what we look for before lending

Our focus at SCP is all about helping people start new opportunities. In our last newsletter we shared the origin story behind Southern Cross Partners’ name and how we are personally dedicated to delivering to investors and helping people seize opportunities via lending.

With term deposit rates at an almost all-time low and forecast to stay low following the Reserve Bank’s latest announcement, we understand more and more Kiwis are moving their money away from term deposits to other investments.

But they are still looking for dependable investment with clear timings on when they’ll get their returns. This is where the clear exit comes in.

Before approving applications and lending any money, we work with our network of financial advisors to identify how a person is going to exit their loan with us. It’s about making sure people can repay their loans at the end of their lending term, so that we deliver to investors.

This can be through a range of ways:

• Bank transfer. A lot of our borrowers engage with us so we can help them on their journey to traditional bank lending. After a year of working with us they’ve got their finances in order and are reading to move to a traditional bank.
• Asset sale. This is a common clear exit strategy with our construction clients. They may sell the properties they’ve built on which we’ve lent, and then they are free to start on their next project.
• Refinance once consented. The banks are generally unsupportive of construction projects prior to consents being issued. We work with borrowers to give them the funding they need to secure the property. Then once borrowers have sorted through the necessary steps to actually start construction, they move to traditional bank lending or wrap it into other debt they have.

We want our investment options to be stable and attractive to investors. By ensuring a clear exit for all borrowers, investors can tangibly see where their investment goes and have the added benefit of investing with secured property.