May 2018 – Banking Commission highlights why people come to GPS


For over 20 years people have asked me, “why would a developer borrower from GPS if they can go to the bank?” After everything coming out of the Royal Banking Commission, I continue to respond with, “why wouldn’t they come to GPS?”

The commission has already unearthed examples of banks giving inappropriate financial advice, misselling insurance, charging fees for no service and even charging fees to clients who have died.

Borrowers come to GPS for the service we offer. They value being able to speak directly with the owner of the business and get a clear “yes” or “no” answer early in the process.

The only advantage the banks have been offering, if they are providing development finance at all, is a lower rate.

However, a lower interest rate is not all it seems after the extra fees and costs of delivering 100% debt coverage from presales and the resultant delays to construction starts.

This stark comparison between our services levels and the banks is the same when it comes to investors.

At GPS we don’t charge fees to investors. We don’t give financial advice. And we don’t encourage anybody to sign up with us unless they are 100% comfortable with their investment decision.

GPS has target interest rates of 8.25% for investors in Select Fund loans and 8.75% for the GPS Invest Pooled Fund. We have met or exceeded our target interest rates consistently for over three years without fail.

GPS does this by focusing on delivering good quality, prudential loans to investors. We concentrate on quality not quantity.

In order to continue to attract these loans in the current market, GPS may need to look at sharpening our pencil on rates we charge to the borrowers.

This could translate to GPS lowering our target rate for investors in the future. A small shift in rates to match the market will allow GPS to stay competitive and continue to deliver the quality product our investors expect.

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