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An ASX-listed financial and property services company has begun funding its own short-term commercial loans using its own cash.
N1 Holdings Limited — a holistic financial services provider covering mortgage broking, residential mortgages, business and commercial loans, car finance services and real estate management — has announced that, in addition to a commercial loan broking business, the company will launch a short-term commercial lending business.
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According to the company, N1’s corporate loan broking business has continued to grow. As at 30 November 2017, this business accounted for 7.31 per cent of the group’s revenue.
The board has now decided to commence a short-term commercial lending business, which will be initially funded by N1’s own cash.
However, it noted that it may eventually seek wholesale funding to increase the size of the loan book.
N1 outlines that the commercial loans will be for “small” amounts, with terms of less than 12 months.
Prospective borrowers must be businesses, corporate entities or other wholesale entities, and they will be screened using N1 Loans’ existing credit check procedures.
Further, approved borrowers will be required to provide directors’ guarantees and collateral in the form of security interests and/or first or second ranking mortgages.
Ren Hor Wong, executive chairman and CEO of the company, said: “Our strong distribution network means we have direct access to wholesale clients with appropriate characteristics for small commercial loans.
“Our team already has rigorous credit screening processes in place. In most cases, the borrowers will be existing customers of N1.
“These factors allow us to make risk-weighted lending decisions more quickly than our competitors and to deploy the funds to our customers more quickly.”
[Related: Brokerage completes $1m capital raise]
