After working for others in the lending arena, from BNZ Finance to HSBC and Pioneer, Carl Woolston set up his own company called National Home Loans.
The business, which aims to source its funding from wholesalers Interstar and AMS, started early this year. Interstar has been particularly supportive, he says.
One estimate is that the non-bank mortgage lenders in New Zealand, who include traditional lenders such as Southland Building Society and relative newcomers such as Wizard, Elders and Cairns Lockie, have only about 5% of the market compared to about 15% for their Australian counterparts.
As Woolston sees it, one of the mistakes the non-bank sector here has made its trying to compete head on with the banks with standard products.
His strategy is to target those areas of the market which he thinks the banks don’t cater for particularly well. In particular, he is focusing on the self-employed.
"About 20% of New Zealanders are self employed, but the banks don’t offer products tailored to that part of the market," Woolston says.
He will also target property investors and people lacking sufficient credit history to satisfy the banks.
His marketing is targeted at professionals such as lawyers and accountants. The idea is that if he can gain the trust of a particular lawyer or accountant, they can recommend Woolston to their clients as an additional service at no cost to themselves.
"It’s very person marketing. We have to build credibility and rapport with the professional first before we get close to the client," he says. Woolston says his experience at HSBC, where he was a private client manager, is that most of his new business was referrals from existing clients and he’s hoping it will work the same way with his own business.
Woolston is also targeting professional associations whose members are likely to include a high proportion of self-employed people.
He has also trying to attract business from mortgage brokers and says he has already "enjoyed strong support from a couple of well established and reputable broker groups. They are important to us in that they have client bases we wouldn't otherwise be able to access."
So far, the business is himself and Eric Williams, who has a similar background, having worked at both HSBC and Pioneer, and two contracted credit managers.
If the business is to be successful, Woolston reckons it will have to build a mortgage book of $200 million or more and he is aiming to achieve that within three years.
