Bridging Finance

We offer flexible short-term funding solutions tailored to your needs. With competitive rates and personalized support, streamline your financial journey with SOS Non-Bank today.

Learn More  Learn More 

Development And Construction Loans

Turn your vision into reality. Our Development & Construction Loans are designed for non-bank borrowers looking to finance land acquisition & construction costs.

Learn More  Learn More 

Investment Property Finance

In today’s dynamic real estate market, traditional banking solutions aren’t always the best fit for every investor. Non-bank lenders have become a popular alternative for securing investment property finance, offering more flexible and tailored solutions for borrowers who may not meet conventional lending criteria

Learn More  Learn More 

Business Equity Releases

Unlock the potential of your asset. Our Equity Release option lets you access the equity in your asset without selling. We offer flexible solutions. Contact us today for a free consultation.

Learn More  Learn More 

2nd Mortgages

Need funds for a big expense? Our 2nd Mortgages offer a way to leverage your home equity. Unlike traditional banks, we consider a wider range of situations.

Learn More  Learn More 

We also provide the following services: 1st Mortgages, Marital Separation Refinances, Tax arrears and IRD Issues, Discharged Insolvency, PLA (Mortgage Default) Refinances.

Navigating Non Bank Lending For Asset Rich Cash Flow Poor

Navigating Non-Bank Lending for Asset-Rich, Cash-Flow Poor Clients in New Zealand

In New Zealand's financial landscape, the phrase "asset-rich, cash-flow poor" is increasingly common, particularly among property owners and developers. This scenario describes entities with substantial assets but insufficient liquid capital to meet ongoing financial obligations.

The Evolution of Cash Flow-Based Lending

Traditionally, cash flow has been the cornerstone of loan servicing. However, the New Zealand market has seen a significant shift in lending practices, especially for asset-rich borrowers. While banks still prioritise consistent cash flow, non-bank lenders have adapted to fill the gap for clients with valuable assets but limited liquidity.

Beyond LVR: A Holistic Approach to Risk Assessment

The Loan-to-Value Ratio (LVR) remains a crucial metric, but experienced non-bank lenders now employ a more comprehensive risk assessment framework. This includes:

  • Asset quality and marketability
  • Borrower's track record and industry experience
  • Exit strategy viability
  • Market trends and economic forecasts

This multifaceted approach allows for more nuanced lending decisions, often enabling financing where traditional banks might decline.


Innovative Servicing Solutions

Non-bank lenders in New Zealand have pioneered flexible servicing options to accommodate asset-rich, cash-flow-poor clients:

  • Partial Servicing: - Borrowers make reduced interest payments, with the remainder capitalised.
  • Full Capitalisation: - All interest is added to the loan principal, requiring no immediate payments.
  • Hybrid Models: - Combining partial payments with capitalisation, tailored to the borrower's cash flow projections.

These options have become increasingly sophisticated over the years, with lenders now offering highly customised solutions.


Case Study
: Property Development Financing

Consider a seasoned developer planning a commercial project undertaking to build 6 terraced houses on a subdivision in Auckland. Despite a strong portfolio, their liquid assets are tied up in other ventures. A typical scenario might unfold as follows:

  • Loan Structure: Facility provided to complete the works with a 12-month term.
  • Interest fully capitalised
  • Security: First mortgage over the development site
  • Exit Strategy: Sale of completed properties.
  • Pre-sales are not required.

This structure allows the developer to focus on completing the project without the burden of ongoing interest payments. The lender mitigates risk through a conservative LVR and the developer's proven track record.

The Rise of Specialised Non-Bank Lenders

Over the past decade, we've seen a proliferation of specialised non-bank lenders in New Zealand. These institutions, often backed by private equity or high-net-worth individuals, have developed deep expertise in specific sectors such as:

  • Residential and Commercial property development
  • Rural and agricultural financing
  • Residential subdivisions
  • Bridge financing for corporate acquisitions


This specialisation has led to more efficient underwriting processes and a better understanding of sector-specific risks. It has also allowed the non-bank lending sector in New Zealand to experience significant growth, with its market share increasing year-on-year.

In conclusion, the non-bank lending sector in New Zealand has evolved significantly to meet the needs of asset-rich, cash-flow-poor clients. By offering innovative solutions and taking a more holistic view of risk, these lenders have become an integral part of the financial ecosystem. As the market continues to evolve, the ability to provide flexible, tailored financing will remain a key differentiator for successful non-bank lenders in New Zealand.


I hope that you find these lending tips and strategies useful to you.

If you are looking for assistance, please contact us today.

Talk to us about your needs.

No matter what solution you need, we make it easy, we make it simple & we make it happen.