Cheap credit drives lender
LOW interest rates and volatile share and property markets are providing the “perfect platform” for a booming Townsville investment company.
Investors Central, whose subsidiary Finance One lends money to people nationally wanting to buy a car, has reported a 44 per cent increase in its number of investors in the past year. Managing director Jamie McGeachie said with the ongoing fallout from the Greek debt crisis, its business was on track for continuing record growth.
“The state of Australia’s credit and investment markets have really created the perfect platform for the business to boom,” Mr McGeachie said yesterday.
“Australia’s decreasing rates market, talk of a housing bubble and the volatility of global shares on the back of the Greek debt crisis have all combined to create the perfect consumer market for our business.”
One of its investors, wellknown Townsville business identity Daryl Holmes, said he had backed the company as “good- value investment” and because it also provided a worthwhile community service.
“Everything has some risk but Investors Central is grow- ing and performing well and is providing a good community service,” Mr Holmes said.
“Everyone, basically, needs a car. To me, that’s a goodvalue investment and there are good returns.”
While term deposits in banks are paying as little as 3 per cent, Investor Central’s fixed- term investments are paying between from 9 to 16 per cent. Its write- offs for bad debts, currently about 4 per cent, are well below its target range of 7 to 9 per cent of written income. Investors Central was established in Townsville in 2011 and has grown its loan book from less than a $ 1 million to more than $ 32 million.
Australia is not expected to suffer from Greece’s debt problems but Mr McGeachie said its implications for the European Commission were weighing on investor sentiment.
“In Australia, we have a growing number of high networth individuals and, since the GFC, a strong culture of private and national saving,” Mr McGeachie said.
“This has led to a greater interest in investments with less exposure to risk.”
The unlisted public company raises capital to invest exclusively in the national car loans market and has achieved strong growth in revenue and profit on the back of sustained growth in national vehicle financing since 2010.
RECORD GROWTH: Investors Central managing director Jamie McGeachie.