Loyal investors keep Chch finance firm afloat

A small Christchurch finance firm says it is trading well, despite ructions in the sector that have caused failures and a cut in lending to customers.

Priority Finance managing director Noel Gillman said as a much smaller lender Priority was getting "100 per cent roll over of investments during a turbulent time for the industry".

Gillman said reinvestment by a small number of loyal investors meant Priority was relatively well off.

"Being a smaller company is sometimes better in some ways. It means we are closer to our investors and to the business itself," he said.

There was talk in the industry of lower investment in some companies making it difficult to make new loans.

"(Some) finance companies aren't lending," he said.

This week, Geneva Finance said it had stopped lending to smaller car dealers.

Last year, Priority launched a $20 million public offer of secured term deposits to back its loan products aimed at small business start-ups and commercial property investors.

Gillman said the loan base had grown to about $4.5m with the secured deposits still on offer, with a prospectus to back that offer updated on an annual basis.

Gillman said he will this week meet a couple of other finance company executives to discuss developments in the sector.

Gillman said he believed firms had used the period since the most intense negative feelings about the sector to arrange lines of credit with banks.

Priority was at a different level than the larger firms as it wasn't dependent on the wider population of retail depositers.