News - 24 October 2006

I'm Back From Holiday and Ready to Help You With Your Finances !

Problem Profile

BUSINESS FINANCE BASED ON CASHFLOW ALONE!!

A client recently came to me looking for finance to purchase the business of a competitor. Their existing business was strong, and the merger of the two businesses made a lot of sense. However, my client didn't want to put up his house as security for the loan. What To Do???

The Solution was Simple - A line of credit facility based on the debtors of the business. The combined value of the debtors more than comfortably covered the funds required, so there was plenty of security. The size and spread of the debtors also gave the lender comfort.

Benefits to the client included:

- Quick and easy process

- Cost effective overall

- Open ended funding based on debtor values, not fixed security value

- Client didn't need to use his house for security

WHO DO YOU KNOW THAT HAS A NEED FOR BUSINESS FINANCE LIKE THIS?? GET THEM TO CALL STUART NOW ON 021 676 747 to see HOW I CAN HELP!!

Food for Thought

Nothing so needs reforming as other people’s habits.

Interest Rate and Currency Comments

Interest rates have been on a roller coaster ride over the last month, firstly coming down as banks launched their spring campaigns, then back up again as wholesale interest rates kept rising. The net result is rates similar to where they were a month ago. The Reserve Bank is likely to raise the Official Cash Rate later this week, to give it future flexibility as well as calming the current market heat. This expectation has pushed short term rates higher, although US long term trends are downwards, which helps longer term rates.

The currency has been driven higher by the high short term rates, and expectations of those rates going higher or staying stable for some time. The kiwi has firmed against the Aussie dollar also due to the interest rate disparity. Medium term, the currency will fall again, but not until our short term interest rates begin falling

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Tuesday 24 October 2006 the following Interest Rates applied:
Official cash rate 7.25% (stable)
90 day bill rate 7.74% (up)
5 year bond rate 6.25% (up)
NZ/US Dollar 0.6680 (up from 0.6562)

Current Range of Interest Rates for home and investment mortgages as at 24 October 2006.

Floating:
8.50 to 9.95% (stable)

Fixed For:
1 Year - 7.85% to 8.95% (stable)
2 Year - 7.85% to 9.25% (up slightly)
3 Year - 7.80% to 8.95% (up)
4 Year - 7.80% to 8.49% (up slightly)
5 Year - 7.50% to 8.39% (stable)

For a complete table of interest and exchange rates, click here.

The information stated herein was correct at the time of release, but is subject to changes without notice.