General Finance doubles loan book

Loan receivables for General Capital Limited, the parent company of General Finance, more than doubled last year from $8.5 million in 2018 to $17.2 million, according to company accounts.

King, who orchestrated General Finance’s backdoor listing on the NZX last year, told TMM Online he expects further growth in short-term lending and bridging finance in New Zealand.

General Capital’s annual report shows first mortgage advances grew from $7.6 million in 2018 to $15.1 million in the year to March.

The growth comes as the finance company looks to build its secured deposits business as well as its lending footprint after UDC signalled its exit from the market.

General Capital plans to increase total assets to $50 million next year, increase deposits to $38 million and will consider an acquisition in the second half of the financial year to March, according to the annual report.

King said a strong relationship with advisers would be central to its expansion in deposit-taking and lending.

“We welcome advisers on both sides. It’s great to see our base developing, and on any given day we’re seeing 4-20 advisers coming to talk to us.”

King thinks “niche players” like General Finance will prosper in the coming years as the second-tier lending market opens up to new players.

“You've got a number of parties competing well against the banks, and no question, there’s strong demand for smaller players in the sectors.”

With its mortgage book growing quickly, King says shareholders are keen to provide more backing, but at the moment, the company has no further plans to raise capital.

“We’re receiving approaches from parties, particularly shareholders who have warrants in the company. We are seeing an interesting market, as it’s hard for investors to find reasonable returns,” he added.