Last month, we briefly talked about our wholesale investment opportunities, soon open to wholesale investors looking at sharing the yield and the investment with an experienced manager like us.
We’re currently collecting expressions of interest and putting the finishing touches on the structure. But in the meantime, we’d like to tell you a bit more about the ‘why’ of this proposition.
As business experts, you know that a key reason for starting a business is to solve a problem or fill a need or void. Entrepreneurship is about wanting to do new things or do things better, and giving clients what they deserve and couldn’t get otherwise.
A few years ago, before launching as a private lender for business and property loans, we were looking for ways to achieve well-secured and fair yielding opportunities in the managed investment space. Unable to find anything that met our criteria, we started making investments in this space ourselves. It turned out to meet a need in the market and grew – and that’s when Merx was born.
From an investor’s standpoint, there are some key benefits to working with us. Firstly, the Merx team invest alongside our investors. Unlike other wholesale investments available in the market, the manager is sharing the risk with the investor. Secondly, our options are designed to provide a well-secured return with transparent management fees. As it turns out, it is not easy to find this elsewhere.
This is our ‘why’ in a nutshell. We’ll tell you more about this offering in the coming weeks, but let us know if you have any questions at all: we’ll be happy to answer them.
Client Scenario: This client – a project management business owner – was looking at injecting equity into their business, to fund a new project opportunity. They wanted to leverage the equity built in their existing property portfolio, one owner-occupier home and one investment property. However, seeing that the bank was slow to respond, they approached us to put their project on the fast track.
Merx Solution: When business opportunities open up, we understand the need to proceed quickly. Within a week, we were able to deliver a $350k loan at 70 per cent loan-to-value ratio, advanced into their business, and backed by second mortgages over their two properties. Once again, a speedy, out-of-the-box solution.
FIRST MORTGAGE LENDING
Client Scenario: This client, an Auckland-based property developer, needed funds to complete the construction of a two-house subdivision development. However, 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 take into account 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 per cent LVR, to be repaid in 12 months.