A new name in the lending circuit, Xceda Finance, is actually an old company with a new mission.
Monday, November 29, 2021, 7:26 a.m.
by Eric Frykberg
Xceda was formerly Asset Finance. It took on the new name in October to reflect its identity as a focused lender, which combines technology loans with old-fashioned bricks and mortar, and a source of income entirely based on local depositors.
The company dates back to 1989. It started in Whakatane as a business selling spare parts for machinery such as trailers and logging equipment. But to help clients pay for often expensive equipment, it began offering financing arrangements, which gradually shifted the company’s original role.
âIt grew into a business offering business and personal loans and then became a real finance company,â said CEO Daniel McGrath.
Xceda still maintains operations in Whakatane, although McGrath is based in Parnell. Other branches can be found in Papatoetoe, Palmerston North and Masterton. It has more than 20 employees.
The company focuses on three areas of credit: personal loans up to $ 50,000, small business loans up to $ 500,000 and home loans, primarily for bridge financing up to $ 2 million.
They don’t offer long-term mortgages because they don’t match the company’s primary method of raising capital – people who deposit money.
âThe maximum term for a deposit is five years,â says McGrath.
“It’s the only source of funding for us, along with shareholder capital, so we’ll only lend money for five years.”
This model gives Xceda an old-fashioned quality, quite different from large companies such as banks which are deeply involved in international money markets.
It also places it under strict observation by the non-deposit collectors regime (NBDT) of the Reserve Bank. There are 20 institutions operating under this system, but most are small organizations such as workplace or regional credit unions.
Xceda is one of the seven financial companies on the list and has a stable credit rating of B.
Monitoring the Reserve Bank requires frequent audits which can be onerous and costly, but McGrath says it’s worth it because it suits the identity and public face of the business.
In 32 years, the company has granted 40,000 loans.
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