Belgrave aims for more conservative investors
In addition, all loans will be 100% insured by a Lloyds of London policy.
Only two other finance companies in New Zealand have such policies, Capital + Merchant Finance and the Bridgecorp group which recently collapsed. It is yet to be seen what the value of the Lloyds policies held by Bridgecorp Ltd, the principal New Zealand subsidiary, will be.
Another Bridgecorp company, Compass Capital, which had much more conservative lending policies and which is still operating, also has a Lloyds policy.
After the three finance company collapses last year, "we thought that investors were looking for a greater level of security and, at the same time, would give them an interest rate that's slightly higher than the banks," Buckley says.
The new product, which was planned before Bridgecorp's collapse, will be offering 9% interest for between one and three years while Belgrave's existing debentures currently pay between 9.85% and 10.25%, depending on the term.
Buckley says his company has had a few calls from investors since Bridgecorp's collapse and the company contacted its larger depositors immediately.
"There's a lot of nervousness out there, but I would say it won't be on the same level as with Provincial (the largest of the companies that collapsed last year)," he says.