Commercial lending ‘momentum’ boosts N1’s cash inflow

Cash receipts from customers in Q4 FY19 was down 13 per cent over the quarter to $1.05 million. 

However, on a year-on-year basis, the company reported an increase in cash receipts to $4.35 million in FY19, up 9 per cent from the $3.99 million recorded in the previous financial year. 

Cash and cash equivalents stood at $919,000 at the end of Q4 FY19, up from 6.7 per cent from $861,000 in the previous quarter.

N1’s CEO and executive chair, Ren Wong, said: “This has been a pleasing quarter, which has benefited from the strong momentum of our commercial lending activities, driven by the recent launch of the One Lending Fund.”

In the June 2019 quarter, N1 had secured an additional $10 million to support commercial lending activities, $6.2 million of which was raised through its new One Lending Fund, with the remaining $3.8 million taken from the company’s balance sheet and committed capital. 

“Demand for short-term commercial loans from SME customers continues to outstrip the company’s supply of capital,” N1 wrote in its disclosure to the ASX.

N1 in May revealed plans to raise $25 million for the One Lending Fund, which at the time, it said, would allow the company to increase the loans written without significantly raising operational costs. 

Commenting on the fund, Mr Wong said: “We are confident in our ability to drive strong future growth and are determined to raise additional capital into the fund, to increase the value of loans that can be written and deliver strong revenue growth.”

Last month, N1 also announced the establishment of a joint venture with Smartkey Property, which offers a “full service settlement solution” to developers and agencies in Australia, New Zealand, the UK and the US. Smartkey has reportedly settled more than 6,000 properties around the world with a combined value of over $4.5 billion. 

Mr Wong said that Loan 77 would allow Smartkey to refer clients to N1 brokers. 

“From N1’s perspective, we can work with Smartkey and handle their leads, and from the perspective of Smartkey, they are telling their clients they have a reliable financing partner to assist them with their settlement of purchases,” he told The Adviser.

In addition, N1 in July launched a new suite of self-branded home loans, which comprises prime, specialist and low-doc loans, including expatriate and interest-only loans. It also offers loans with an 85 per cent loan-to-value ratio with no lenders mortgage insurance.

“[The loans] will be offered to N1H’s mortgage broking client base and provides the company with the opportunity to have better control of the loan application post-settlement process, whilst leveraging its existing resources, including N1H’s internal credit team and operational capabilities of the business,” the company said in its ASX disclosure. 

[Related: N1 launches new mortgage suite and joint venture]