Newly minted HomeSec New Zealand manager Ziggy Munz is confident residential mortgage advisers will be able to add another arrow to their lending bow after an education programme he is planning.
Australia-based HomeSec has been offering first and second mortgage business loans in New Zealand since 2020 and was one of the first to offer an open term second mortgage product.
Munz wants to expand the business and says many residential mortgage advisers have clients that are ether self-employed or own a business and they miss the opportunity to help them in this area.
He is planning an education programme on what HomeSec offers, how it works and how advisers can take advantage of this to not only help with residential mortgages but also business loans.
He says it will be a strong education piece about how well this type of loan works for the adviser network “Most advisers are inexperienced with this type of product.”
One of the reasons is the second mortgage market is probably one of the most under serviced spaces in commercial finance in New Zealand. It is low on lenders for small businesses.
The market is far more mature and developed in Australia with more lending options. Munz says there are industry bodies for commercial advisers helping them develop their skills and knowledge to meet lenders requirements.
Compared to the thousands of residential mortgage advisers across New Zealand, Munz estimates there are 50 advisers concentrating on business lending only.
“Once residential mortgage advisers understand the value of a fast and flexible solution for their clients’ business lending, it is likely their loan work will grow quickly
Munz says the advantage of HomeSec is it will help clients even if they have defaults, tax debts, judgments against them, bad credit and poor cashflows and need to borrow money quickly for almost any business purpose. “We will approve them quickly and may be able to release money within 24 hours, generally speaking.”
Loans of up to $1 million can be approved.
HomeSec is one of the larger junior debt providers and probably the biggest second mortgage lender in New Zealand already.
The mortgage lender doesn’t advertise as prolifically as Bizcap, for example, to the direct channel, so it has stayed under the radar.
“We generally just do business through the adviser channel and this is where the education programme will be aimed,” Munz says.
He says while HomeSec and Bizcap, which he worked for earlier in his career, are both open-minded they have major differences.
Bizcap lends to businesses that have strong cashflows available, whereas HomeSec lends on the basis clients have equity available in a transactable property it can take a security against.
Another difference is HomeSec offers capitalised terms for business owners of six to 12 months, meaning they don’t have to make any payments toward the facility for that period.
“It’s like the ultimate cashflow relief, because the business owner doesn’t have to service anything immediately. It gives breathing room for a struggling business to manoeuvre into a better position, which is effective.”
Clients can remain on HomeSec’s book on interest only terms after the end of the capitalisedperiod for as long as they wish. “There is no point where we are actually going to recall the principal provided they are able to service the loan on an ongoing basis.”
Munz says it is potentially the only open term loan available in the industry.
He admits HomeSec’s product is not cheap. “We are probably one of the more expensive facilities in the mortgage space, but ultimately what you get is what you pay for. There is no other lender who will advance money as quickly, will as open-minded around client circumstances and certainly no other lender in the space who would be as flexible. So, whilst clients do pay a premium, they are getting a premium product.”
HomeSec is privately funded by either its directors or co-funders, who are essentially wholesale investors in Australia and New Zealand.
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