Supporting growth with purpose-fit finance

At Merx, we specialise in providing purpose-fit finance to help business owners and property professionals thrive.

Our expanding portfolio of success stories underscores the effectiveness of our lending process and its ability to facilitate our clients' objectives.

We take pride in supporting Kiwis with well-thought-out plans across a wide range of industries and in the property development sector. Below, we delve into four recent client scenarios, outlining the funding requirements and the tailored solutions Merx provided.

FIT FOR PURPOSE FINANCE

Client Scenario: An experienced operator with existing businesses in the fitness industry, this client was seeking finance for fit-out and establishment costs to get a new location up and running. While our client has strong historical financials and a track record of proven growth, their bank was unable to lend based on projected future profit, so they approached Merx.

Merx Solution: After reviewing our client’s trading records, projections, and available security, we were more than comfortable advancing the required $250,000 for fit-out and establishment costs. Using first mortgage security, we set up the facility on Principal and Interest repayments over a three-year window and a 12-month term. Our objective for the client was to create a structure that would (a) provide the funds they need to get their new site operating and (b) prepare them for refinancing the facility back to their bank at the end of the 12-month term. This is an excellent example of how we can help clients achieve growth objectives and bridge the gap between short and long-term finance needs.

SIMPLIFIED PROJECT FUNDING

Client Scenario: At times, attempting to finance smaller property projects through a bank can become an exercise in excessive red tape. In our client’s case, the $1.5 million required for their small residential townhouse project attracted the same conditions you’d expect for a $50 million project, i.e., pre-sales, full quantity surveyor, etc. Rather than continuing to stall progress, our client approached Merx for a solution.

Merx Solution: With ample security available—first mortgage on the new townhouse development and second mortgage security on the broader portfolio—and sound projections for the end value of the completed project, we advanced the $1.5 million required so this experienced property owner could get moving. We set the facility up on a term that aligns with the projected completion date and using a simplified project funding structure.

 

SECURING FUTURE VALUE

Client Scenario: This is a great example of hard-working Kiwis identifying an opportunity to create value and get ahead. A small property developer was underway with a development that would, on completion and sale, reduce their overall level of debt. It was a smart plan where our client had subdivided an existing property to create two sections and commenced building a new house for sale. They had started the project using existing mortgage funding from their bank and their savings but needed finance to reach the finish line.

Merx Solution: This is not an uncommon scenario – a small developer has a sound plan but could not access finance based on future value through the banks. And it is an example of where Merx is an ideal partner.

It didn’t take us long to understand what the client wanted to achieve – to increase the overall value of their property holdings so that they could sell one piece of it to reduce total borrowings. Based on our understanding of the client’s plan and the future value at completion, we advanced the required funds, $300,000, secured against the three properties in the client’s portfolio.

As noted above, this is a great example of a client with a smart objective and sound financials falling outside the mainstream bank thinking. Whereas at Merx, by applying our construction and property finance expertise and ability to lend based on future value, our client can complete the project, realise the increased value, and achieve their objective.

 

CUTTING THROUGH RED TAPE

Client Scenario: As we all know, swift access to finance can be crucial in realising opportunities, and that was the case for a residential property developer we recently assisted. With a sound approach to development and an existing portfolio with equity, our client wanted to progress development on another project and contacted Merx for assistance.

Merx Solution: After reviewing our client’s portfolio and the planned value at the completion of the new project, we were more than comfortable advancing the required funds. Backed by a first mortgage security, we advanced $500,000 over a nine-month term, with repayment due at completion of the project.

Importantly, this is a great example of how Merx can quickly cut through the red tape for clients: Because we could quickly understand what they wanted to achieve and how they are going to make it happen, we could provide the required finance with limited controls. This meant that our client could get their project underway without the time delays and costs of things such as valuations, securing pre-sales, etc. While controls have an important role to play in managing risk, where the scenario allows – as in this case – we support clients by removing unnecessary barriers so they can get moving.

 

Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Potential investors with Merx must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.

30.75

%

Returns Since Inception

Returns based on an actual company investor account with net returns re-invested monthly. Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.

Why Invest with Merx

About the Merx Wholesale 1 PIE Trust: Structure, principles: management and more

Comments from Merx Investors

I have enjoyed investing with Merx and learnt a lot through the process too. Merx have been very transparent with what they do and the communication has been consistent. Wouldn’t be a testimonial without mentioning the returns too, thanks for those. Looking forward to being a part of the journey for years to come.

Luke

There's a lot to be said for a fund where the managers invest alongside their investors. It's a real partnership where the interests of investors are prioritised. The returns to date have been great, the unit structure gives me the flexibility I want, and I've been really impressed with the communication.

Aaron

I've been impressed by how Merx looks after their investors - from how the fund is structured for redemption, reinvestment, and tax efficiency - to the communication and care in understanding my investment goals. It makes a difference - investing alongside managers who are also invested in the fund.

John

Aligned Interests

Aligned interests is a core principle of the Merx Wholesale 1 PIE Fund. As the Trust’s management team, we personally invest alongside our investor partners. We have the same risks and potential returns as our investors.

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Investor's Journey: Merx Director,
Andrew Dunning

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Get the detail – fund description, management, fees, risks and more. Request the Merx Wholesale 1 PIE Trust Investor Brochure here.
Request the Merx Wholesale 1 PIE Trust Investor Application form here. Note: the fund is not suitable for retail investors.

Merx Wholesale 1 PIE Trust Returns

Year 1 actual net return (on company investor portfolio reinvesting)

20.13%

 

Average monthly distribution (annualized)

17.41%

 

Returns since inception

30.75%

Returns based on an actual company investor account with net returns re-invested monthly. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

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*Returns are net actual returns distributed to investors (annualized) – net of all fees and costs before tax. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

Investor Brochure

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).

Investor Application

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).