How we helped our clients in 2021 – in six client scenarios

As the year enters its last leg, we’d like to revisit some of our 2021 client success stories, and how our simplified approach to finance can help business owners and property investors build momentum in their projects.
Merx How we helped our clients in 2021

Pre-development funding

In 2021, we introduced a new pre-development funding package, which has been receiving great interest and response from small property developers looking at getting their projects in motion.

Designed with developers in mind, our package is simple and straightforward, allowing us to provide fast funding of either $50k or $100k towards pre-development costs, to be repaid in six months with an affordable second-mortgage rate of just 7.99%.

What’s more, with this solution clients also get to pick up our expertise, and by the end of the term, they should be well-placed to have a well-articulated, well-organised project ready for funding (either by us or a mainstream lender).

Here are some client scenarios in this space.


This client had bought large sites with the vision of potentially carrying out property development projects in the future. However, they hadn’t purchased land with that specific intent, and while they knew development could happen, they hadn’t scoped down the specifics of those plans. Having decided to move forward with the project, they approached us to secure the required pre-development funding.

Merx Solution: Based on their objectives and their existing portfolio of nine properties, we were able to provide the funds they needed to progress the feasibility study on their project, as well as undertake some planning and design work, and get resource consents for future subdivision and development.


This client, a small property developer, had bank debt to 50% LVR, and they needed $100k to move the consenting and planning forward. However, it was difficult for them to show that they could service increased mortgage debt from their salary, and the bank was reluctant to provide the required funds. Soon, the client realised that the approval process would take a lot longer than expected, with no certainty of outcome; so they approached us to get things on the move.

Merx Solution: At Merx, we have the capacity and appetite to support small developers and help them seize their property opportunities. As it’s often the case, we determined that the client would be able to service and repay the debt by developing the property and selling units. We provided the $100k funding on an agreement to mortgage (a caveat on the land), to be repaid in six months.

First-mortgage lending

In 2021, we also experienced strong demand for our first-mortgage finance, provided through a co-lending model with wholesale investors. Our solution has been well received by investors seeking new opportunities, especially while interest rates were at their lowest.

For more on our approach to small property developments click here, or read on for a couple of recent client scenarios in this area.


This client, an Auckland-based property developer, needed funds to complete the construction of a two-house subdivision development. However, due to tightening banks’ rules around loan-to-value ratio and pre-sales requirements, raising finance through traditional lending proved to be a lengthy and uncertain process.

As the amount this client required did not qualify for wholesale funding, their bank required proof that they could service the interest each month. Caught in unexpected red tape, the client approached us to get the project off the ground.

Merx Solution: At Merx, we assess projects based on their fundamentals. When it comes to higher-density construction, for example, rather than requiring pre-sales or monthly interest as a condition of the loan, we consider expected returns and can capitalise the interest to the loan.

Following a positive assessment, we were able to arrange $1.5 million of first-mortgage finance, at 66% LVR, to be repaid in 12 months. This is helping the client complete the development, and be in a position to rent or sell to maximise profit.


This client was looking at purchasing land in South Auckland, to proceed with the building of six townhouses. Seeking funding through mainstream lenders would have entailed a lengthy and more complex finance approach, so the client – who had worked with us in the past and knew how we operate – decided to contact us first to take his project forward.

Merx Solution: Our approach is tailored to the needs of smaller property developers looking for simplified, cost-to-complete funding solutions taking a project through to completion. Following our assessment of the quality of the project, we were able to provide funding to purchase the land at 60% LVR and then funding to complete the project. On completion of the project, the LVR will be under 60%. The interest rate on this particular project was 7.99%, with fees on top of that. Thanks to our funding support, this small property development is now underway.

Equity release and working capital funding

Alongside our focus on property development, we also continue to work with business owners and investors to help them make the most of their opportunities, through working capital funding and equity withdrawal solutions.

Due to unprecedented uncertainty around cashflow, coupled with new credit rules and tightening lending restrictions, many businesses are finding it challenging to secure funding through mainstream lenders. At the same time, increasing property values are a valuable financial resource that business owners and investors can tap into – and that’s what we’re facilitating.

Have a read of some of our recent equity withdrawal scenarios, and let us know if you have any questions.


This client, a business owner and investor, was looking at withdrawing equity from an existing Auckland residential property to purchase a small wholesale business. Despite the client’s positive business track record, the venture they planned to purchase was entirely new, and the bank was reluctant to provide funding based on projected cash flow alone.

Merx Solution: By taking a broad view of the business’s future growth, we were able to provide initial working capital of $200,000 at 70% loan-to-value ratio, secured by a second mortgage on the property. This structure allowed the client to maintain a portion of their debt with the bank at 3%, and the second mortgage with us at 15%, with a weighted average cost of funding sitting low at 6.4%.


This client was looking at releasing some equity from an existing property to fund the deposit on a property investment that they wanted to make. Despite being at 60% loan-to-value ratio, they couldn’t raise the money through the bank, due to the bank not accepting cashflow from the future investment in support of servicing the loan in the medium term.

Merx Solution: Unlike mainstream lenders, we were able to base our funding decision on the expected income to be generated from the investment. We could see this was likely to work for our client and provided a $150k second mortgage funding facility to be repaid within nine months. This allowed the client to release the necessary equity from their property and move forward with the investment.

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