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N1H property-backed mortgage fund Investors Proposal


OFFER SUMMARY - One Lending Fund

Investors welcomed: HNWIs, Institutions & Mezz funder

Investment Amount: minimum AUD$500,000

Target size: Up to AUD$50,000,000

Current size: AUD$26,500,000 approximately

Nature of Fund: Property-backed (residential and commercial) mortgage fund

Inception: Dec 2017

Fund financials: Independent audit since 2019


EXECUTIVE SUMMARY

One Lending Fund lends to small and medium-sized businesses located in Australia, thus providing strong, consistent and predictable returns, tapping the strong 2,300,000 SMEs in Australia seeking finance with AUD$20 billion potential market opportunity. All Loans will be secured by mortgages over property (residential and commercial) located in Australia with personal/directors’ guarantees obtained.

The underwriting, funding, and loan management is performed and managed by licensed AFSL holder N1 Asset Management, a 100% owned subsidiary of ASX-listed N1 Holdings Limited (N1H). N1 Asset Management has a thorough underwriting process and strong credit committee with over AUD$2bil credit experience, to make sure loans are only made to borrowers that have a high probability of success with the business and the ability to refinance the property if needed. The trustee is also performed by N1 Asset Management.

The management of N1 is also overseen by a highly experienced board of directors.


WHO is N1 Holdings Ltd (ASX:N1H)?

N1 Holdings is positioned in the market as a direct lender (both as a balance sheet lender and manager of mortgage fund) in the Australian SMEs sector, the largest employers group in Australia. With the growth in lending from non-traditional sources, such as alternative banks and non-bank funders and lenders, N1 with its unique competitive advantages is perfectly placed to advise businesses through this changing lending environment and debt/capital market.

N1 Holdings also provides strategic financing advice to SMEs, project developers and property investors seeking new capital/debt, or refinancing existing debt. We assist borrowers through the complex processes of obtaining debt capital from Australian major banks, private funds, and offshore debt capital providers.

Apart from business lending, N1 core business also includes cross-border corporate financing, project funding, fund trustee services and vendor finance solutions.


Market Opportunities (Australia only)

The major banks and other traditional lenders have been retreating from the SME lending space, particularly in respect of loans of $5m or less and less funders are doing up to $50m deal. SMEs are seeking alternative lenders.

  • Australia has approx. 2.3 million SMEs.

  • The potential market opportunity of SME lending is about $20 billion.

  • 1 in 5 small business owners need cash flow finance at least once a year


WHAT is N1H Unique Strength

  1. N1H has access to strong deal flows which is a major consideration in the lending sector, allowing investment manager to pick and choose quality deals, balancing risk-return ratio, with considerations given to Leverage ratio, security location, borrower financial position, funding purpose and exit strategy.

  2. N1H’s (investment manager) multiple business lines with over 2,000 client database provide a robust cross-referral origination network.

  3. N1H possesses efficient infrastructure for direct and rapid capital deployment, uniquely positioned as a direct lender in the market that accesses to a large pool of quality borrowers with the ability to deploy capital up to $200m under current operational capacity.

  4. N1H’s internal credit risk team has significant credit experience with over $2.2b settlement in both residential and commercial loans since inception.

  5. N1H has established a vast network of brokers and SME clients which needs in the non-coded lending space.

  6. N1H’s fully owned subsidiaries hold multiple licences. N1 Loans holds an Australian Credit Licence #473016, Zillion Finance holds an Australian Credit Licence #389330. N1 Asset Management holds an Australian Financial Services License #477879.

Origination

  1. Well defined product niche and key features

  2. Solid credit procedure (credit policy and manual, credit committee policy, etc.)

  3. Judgmental analysis, underwriting policy with efficient approval and settlement process

  4. Strong quality control

  5. Independent security valuation (partnering major valuation firms)

  6. Comprehensive credit reporting (partnering major credit reporting providers)

  7. Arrears and Default Management (partnering specialist legal and collection agencies)

  8. Fraud detection and Prevention (documented manual and policy)

  9. Solid risk management procedure including audit, quality control and business continuity plan

  10. System support and data security (in-house CRM and loan management system)

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