Who we lend to
We’re Specialist non-bank Lenders & Problem Solvers
Borrowers come to Midlands when they want a loan to purchase commercial, residential, or rural property, but they don’t quite fit bank lending criteria. This can be for a variety of reasons (not all of them sensible, in our opinion). At Midlands, we have a team of experienced, specialist lending experts. Combined they have over 100 years of banking, lending and finance industry experience which allows us to create sensible and practical lending solutions that the big banks often miss.
Who do we lend to?
We invest in a quality, diversified portfolio of loans secured by first ranking mortgages over property and land assets in New Zealand.
Borrowers come to Midlands when they want a property loan but don’t quite fit bank lending criteria.
This can be for a variety of reasons, including being a new business owner or self-employed with no PAYE income, the borrower’s age or having assets but no cash flow over a short period of time.
Simply put, bank lending criteria mean that there are a lot of creditworthy New Zealanders being turned down by banks at present,
which is where we come in.
Midlands’ 8 investing principles
Midlands’ conservative lending principles help protect our investors:
All loan proposals we receive undergo a rigorous credit assessment by the Midlands Lending team. A second review is then carried out by the Midlands Credit team before a loan application is approved. Loans are always secured by first ranking mortgages over the property and land assets and repayment is typically by way of selling an asset or refinancing to a main bank. This thorough process means less than 10% of the loan proposals we receive are successful and ensures we invest in a quality, diversified portfolio of loans which should weather market volatility, protect investors capital and provide consistent and reliable rates of return to our investors.
1
Loans are always secured by 1st Mortgages over NZ property (see below)
2
We have a conservative LVR approach (see below for more)
3
Our loan portfolio is diversified geographically across New Zealand
4
Our loan portfolio is diversified, with a mix of residential, commercial & rural property assets
5
We do floating and fixed interest rates loans.
6
We offer shorter term financing (our loans are generally for 1-2 years)
7
Our borrowers must have a clear exit eg to sell the property or refinance back to a bank
8
We don’t lend all our investors money out. We hold a minimum of 5% in cash and also have a Reserve Fund.
Current loan overview
These details are subject to change. However, the Fund can only invest in ‘authorised investments’ and it must adhere to investment policy guidelines, benchmark asset allocation and lending limits, as set out in the Trust Deed and SIPO. For example, the Fund has loan to value (“LVR”) lending limits it must adhere to.
For the most recent information, get in touch.
What is a 1st Ranking Mortgage Security?
Midlands ONLY do 1st ranking mortgages.
A 1st ranking mortgage is the most secure form of loan security available when taking security against a property and adds a layer of protection for investors.
Simply put, a 1st Mortgage means Midlands gets paid back first.
A first ranking mortgage gives Midlands the right to take possession of a property and/or land and sell it should a borrower stop making loan repayments or otherwise fail to honour the terms of a loan agreement. This right remains in place until the loan is paid off in full, together with any outstanding interest. For example, if a property was sold for $1,000,000 and Midlands was owed $300,000 on this property. Midlands would receive the $300,000 owed before the owner of the property received any remaining funds.
What do you mean you have a Conservative LVR?
What is LVR?
Loan to Value (LVR) ratio calculates the amount of your loan (how much you borrow) compared to the value of your property. For example, if you owned a property valued at $1,000,000 and you borrowed $800,000 to purchase it, the LVR on this loan is 80% $800,000/$1,000,000 = 80%.
Midlands Conservative LVR:
The average weighted Loan to Value Ratio (LVR) on the total Midlands loan portfolio is currently 50.8% (as at 30 August 2024).
This means on average, for every $500,000 we’ve lent out (‘loan’) we have $1,000,000 worth of property assets secured for the loan (‘value’). Put another way, the total value of all Midlands’ loan security would need to drop by 49.2% before it was less than the total amount of loans made.
The combination of 1st Mortgage Security AND a conservative approach to LVR’s helps protect the Fund and our investors.
AVERAGE WEIGHTED LVR 50.8%
Ready to invest smarter?
Call Sandy!
Sandy is your first point of call at Midlands. Bright, bubbly and astute, Sandy has 33 years of banking and investment experience. She left the big bankie stuff behind for the clever, welcoming and down to earth approach Midlands is known for. She’ll guide you through every step of the process over the phone, email or maybe even a cuppa.
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“Sandy’s been awesome to deal with. Nothing’s a problem, basically. I can ring her any time”
Happy Midlands Customer