March 2020 – The GPS Balancing Act

Newsletter

GPS provides a niche product. We invest in residential unit and townhouse construction loans within two hours of the Brisbane CBD.

Our investors and borrowers come to us because we are niche. It means better service, transparency and expertise.

Being so niche requires a hands-on balancing act to make sure our product works for both investors and borrowers. A balancing act the staff at GPS are experts in maintaining.

This year we strategically dropped our target distribution rates in order to be more competitive in the lending market and attract sufficient quality deals for our investors.

We can see this plan working with an increase of quality borrower enquiries coming through in early 2020.

GPS has been doing more work on refining our product and planning what we want our loan book to look like.

The sweet spot is loans between $5 million and $10 million. These projects are undertaken by experienced developers, with established, competent construction teams.

This is not to say we won’t look at funding projects at less than $5 million. We will fund smaller projects for trusted, repeat performers.

Loans over $10 million are also considered. For these larger loans we apply the extra tools we have in our toolbox, like co-funding, to reduce the risk to GPS investors.

After a pause in new investments to our GPS Invest Select Fund investors, we have started making offerings to our waitlist. Some of you may have already seen the first loans coming through, with another offering predicted for this month.

We are striving to be able to make one or two offers per month going forward. Offers can only be open for a set amount of time to create fairness, so please return your application forms as promptly as possible. If you have any concerns about getting your application form in on time, please give Olivia a call on 1800 999 109 and she can assist you.

Our Financial Analyst, Josh, is working on models to assist us in making a decision on when we can reopen to the investment of new money. This may still be some time, but when we do reopen for new investment, those on the waitlist will be offered the opportunity first.

We appreciate the vote of confidence from our investors during this long-term low interest rate environment. We are continuing to work hard and as always, welcome your feedback.

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