Strategic Finance CEO Kerry Finnigan has detailed how 'bankable' refinancing deals with loan to value ratios of 35% or better were being rejected by the big bank Treasury departments or head offices despite approval from lending officers on the ground.
"You just can't get a bank to write a cheque any more," Finnigan told interest.co.nz. Finnigan was speaking after releasing a moratorium proposal to repay investors all their capital and interest within 5 years. Strategic Finance has a loan book of over NZ$500 million worth of loans to property developers, which in past times were able to refinanced by banks when near completion.
"When your guy at the bank goes to Treasury he is told 'We don't do loans of that size or there's some other excuse. There's just a general lack of supply," Finnigan said. "We simply do not have banks lending money any more."
Meanwhile, he said Strategic had been unfortunate to miss out on the launch of the Government Deposit Guarantee Scheme, which had saved those finance companies still alive on October 11. "The game would be completely different if the government had moved to bit sooner than they did," he said.
"Unfortunately the timing was against us."
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