The one thing we look for in every loan application

Our focus at Southern Cross Partners is all about helping people start new opportunities.

Our name comes from the boat that one of our founders, Barry Milward, travelled on when he came to New Zealand. Years later when Barry and his wife Julia launched their new business venture, it seemed fitting that the name referenced the ship that was integral to moving to New Zealand and symbolic of ‘new opportunities and a new life’.

Fast forward nearly 25 years and the business is still focused on helping start new opportunities – and a key component of this is ensuring that every time we lend to people, we’re all clear on what the new opportunity is that we’re bridging people to.

This is what we call a clear exit. Every loan we approve has a clear exit.

The questions we want to answer is ‘will this loan put the borrower into a better position?’ and ‘what will borrowers exit to?’.

Before approving any loan, we need to know how a person is going to exit their loan with us and when that will be. Ultimately, it’s about making sure people can repay their loans at the end of their lending term.

This can be through a range of ways:

• Bank transfer. After a year of working with us borrowers have got their finances in order and are ready to move to a traditional bank.
• Asset sale. This is a common clear exit strategy, particularly with our construction clients and people bridging between houses. They sell the properties they’ve built or bought, and then they are free to start on their next project.
• Refinance once consented. We’re finding that 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 start construction, they move to get traditional bank lending, or wrap it into other debt they have.

There is a myriad of other clear exits at the end of a loan term, which is why we always start with a conversation about the purpose of a loan and what the borrower is trying to achieve.

When we’re clear upfront on what the clear exit is, we can be more understanding about other aspects of the loan structure. So, if your customers need lending and don’t fit the traditional banking system, please talk to us about how we can make it work together.