The role of non-bank lenders

Written By Kim Manunui

While NZ trading banks are all regulated by the Reserve Bank of NZ (RBNZ) in relation to their codes of practise, not so non-bank lenders, with some exceptions.

In essence, non-bank lenders are peer-to-peer lenders who can arrange funds for projects that sit outside the main bank criteria or appetite.

Rules still apply as they have to meet funding criteria but they are typically not as stringent as regulated main banks and are less risk averse.

Funding is usually arranged through private investment funds or a panel of registered investors to whom they present an application for funding.

Designed to be short term, they are ideal where the application won’t quite fit with a main bank but secures the property until main bank criteria can be met which could be 3 - 24 months down the track.

Also great for short term property investors, traders and developers with interest only or capitalised interest where its added to the end of the project settled on sale of the property with no payments in between.

With multiple players in the NZ market available through brokers, LVR and max lends can vary with generous capacity. Some will specialise in smaller projects while others will focus more on larger developments.

Interest rates will typically be fixed at a few percent above main bank floating rates and set up fees including broker fees can range to up to 3% of the drawdown however where fast and short term funding with lower documentation is required with funding facilitating major returns, the rate for risk profile is rewarded.

They can also be a great place to invest with higher returns on First Mortgage secured NZ property in PIE funds typically placed with The Public Trust and auditors appointed, mostly private with some part of NZX Listed companies.

Ranging from residential to commercial, development, construction and rural projects, applications are evaluated on a case by case basis with a determined exit strategy and placed with the appropriate lender.

For enquiries on the above, hit the contact tab below.

Kim Manunui

Hi, I’m Kim and I work with a great team to help individuals, as well as small and not so small businesses get their message, product and services to the world using digital media and creating wonderful websites that don’t cost the earth.

I was born in Canada, and grew up around Vancouver and the mountains of British Columbia. My love of pristine environments led me to New Zealand and eventually to the mountains, lakes and rivers of the central North Island which is home. My family’s heritage is here, and it’s from here that Korio traverses the planet.

The digital world is never static and neither are we.

And I say ‘we’ because I work with an awesome group of talented people who I gather together as required to complete a project.  Whatever your business, not-for-profit or individual needs are we gather the best team to get the job done.

Collaboratively we are creative, share sustainable values and work hard for great outcomes because that’s the buzz of satisfaction that drives us.

If you have an audience and market to reach, we can make that happen. Creative design, words that work and smart behind the scenes stuff that cuts through the online noise. We’ll design your website and then build it. We’ll manage the content as well as all your hosting needs. We can handle your online advertising so you get noticed,
and we’ll manage your social media presence so you get the clicks, likes and engagement to grow your business. All within the budget you set, because none of this needs to cost the earth.  And the job doesn’t stop when your website goes live. We are your virtual business partner.

https://www.korio.co.nz
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