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Investor Newsletter #3 - September 2005

Welcome to our third General Finance investor newsletter. We appreciate your support. The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you. This newsletter is prepared on a quarterly basis.

Our Second Prospectus Due Soon

At the end of this month, our first prospectus expires. Our new one is being prepared and when printed we will send you a copy. We welcome any further investment of funds. The new prospectus allows our investors to review our financial result, which was discussed in our last newsletter (30 June 2005), and to gain a better understanding of our business. A unique feature is that we are combining the prospectus and investment statement into one document, ensuring readers of the investment statement have access to full financial information. We have received comments from the investing public that they dislike receiving a number of different individual documents in the mail - so we hope our solution will assist you here. If you have any questions or comments on the prospectus we would be pleased to receive them.

The Auditor’s Role

When we issue a prospectus to the public we must provide a set of accounts as at our last balance date. These accounts must be audited by an independent firm of Chartered Accountants such as the firm we use, Hayes Knight Audit based in Auckland. A finance company can prepare its own accounts internally but an outside independent firm of Chartered Accountants must audit them. The auditors provide an opinion which covers
• Whether the directors have kept proper accounting records
• Whether the financial statements comply with the Security Regulations 1983
• Whether the financial statements comply with generally accepted accounting practice
• Whether the financial statements give a true and fair view of the state of affairs of the company, its results and cash flows
• Whether the auditors have obtained all the information and explanations they required
Having our accounts audited is another level of protection offered to our investors.

House Prices Still Strong

According to the latest figures published by the Real Estate Institute, the national median price for residential dwellings countrywide is now $290,000, 70% higher than the $170,000 median price five years ago. The median price increased by $10,000 over the past month. House sale volumes remain strong and it now takes less time to sell a property - 29 days down from 31 (in July). The housing market is expected to remain firm until Christmas due to the election being over and springtime is traditionally an active period for the residential property market.

Some Lending Examples

Here are a couple of examples of lending that we have done recently:

a) Upgrading several residential rental properties
A residential property investor came to us with five rental properties. As he had owned these for a number of years, they were starting to get a bit run down. He wanted to borrow $60,000 for 12 months as a second mortgage to renovate and improve his property portfolio. Once the work was completed he was planning to revalue his properties, rearrange his mortgage finances and repay our advance.

b) Bridging with heaps of security but cannot confirm income,
An individual was selling his dwelling in Hamilton for $200,000 and purchasing another for $250,000. He had not yet sold his existing dwelling but had to settle on the new one. He had $100,000 in savings but was $150,000 short. We advance the funds for four months to allow the borrower plenty of time to sell his old property. Our security was a first mortgage over the property being purchased. We receive a number of applications such as this, which make very good lending proposals.

If you have any questions about your investment please do not hesitate to contact me on 09 526 7800. Our website is at

If you want to invest more funds or obtain statements and the like, our securities registrar's number is 0800 500 602.