New Zealand Merchant Finance Group (NZMFG) has set up an operation offering finance for residential mortgages. It already has a business doing commercial finance.
"The time to start a business is when times are tough," Director Kit Carson says. "We realise that there is change and we are trying to adapt to the changes."
Carson acknowledges that NZMFG can't compete with the banks on rate, however he says it will be competitive against other lenders.
A key part of the value proposition he is putting to brokers is that NZMFG will provide good service, quick turnaround time and will work to add additional services and features to its loans.
Some of these benefits will be announced soon, he says.
Also, NZMFG offers some referral services to brokers for commercial lending and insurance which, he says, can help brokers increase their income.
The group is offering brokers two commission options for residential lending. One is 0.80% up front and the other is a 0.55% upfront commission with a 20 basis point trail.
He says these are good commission rates in this market.
NZMFG has a prime wholesale funding line from Calibre and is currently negotiating a second line.
Carson says NZMFG is happy to consider applications for good loans, but warns brokers not to send it all the bad deals that other lenders have declined. NZMFG will probably decline those applications too.
