Where a borrower defaults on repayment (in part or full), and the borrower’s security is insufficient to meet shortfalls and enforcement costs, you may not be repaid principal (in part or full) and you may not achieve the target return (or repayment of principal and payment of interest may be delayed). Particular factors that increase that risk include deterioration in economic conditions, changes in law, political events, natural disasters and other external factors that impact on the ability of borrowers to repay loans and the value of security (including the security property).

For each individual loan investment you are investing in one loan. There is no diversification (that is your investment is “concentrated”) and, if the borrower defaults, you risk losing some or all of your investment. You may be able to diversify your risk by investing in more than one loan or in other investments. Investments offered by the Trustee are in different regions of New Zealand.  An economic downturn, drought, natural disaster or other adverse event that disproportionately affects a certain region may disproportionately impact on your investment.

We assess the creditworthiness and the quality of borrowers, arrange the entry into, administer and enforce the loans (through the Trustee), and administer your investment. Operational or systems failure by us, or an associated service provider, could mean we are unable to do what was agreed or we may not do it to an expected standard, which may impact on performance of the investment.

You can only sell your investment with our consent so you may not be able to access funds in your investment when you need them. And, if you can sell, you may not be able to find a buyer who wishes to buy at a price that reflects the target return. Also, if the borrower defaults, payments of principal and/or interest may be delayed.

Inflation reduces the real value of all investments. There is a risk that the value of your investment will not keep up with inflation.

We rely in part on registered valuers’ reports and real estate agents’ appraisals when considering the value of security properties.  These reports and appraisals can contain inaccuracies and can fail to take into account all factors which might influence value.