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Investor Newsletter #3 - September 2015

Welcome to our September 2015 General Finance quarterly 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. 

New Bank Notes
By mid next month we will start to see our new bank notes – initially the $5 and $10 notes. This is the sixth change to our bank notes since they were first issued by the Reserve Bank in 1933. The purpose of the change is to make them more sophisticated and therefore more difficult to counterfeit. While New Zealand does not have a big problem in this area, some jurisdictions do.  For instance, if you take a 50 Euro note into some shops in France or Spain, they will check it to ensure that it is genuine. The $5 note will be retained. It could have been converted to a coin like to $1 and $2 notes were back in 1990. Existing notes will still be accepted. More details are available at

Trusts are Extra Work
Some of our investors are using family trusts as holding vehicles for their investments. Due to New Zealand’s rigorous anti-money laundering legislation, we do require more information when investments are being made via trusts. We require certified identification for all trustees, some information about the trust and (some) details on the beneficiaries. A certified copy of the trust deed is required in all cases. It is not that we are being pedantic - it is simply required by law. We are happy to assist you with this matter.  A good summary of the requirements is contained on page 69 of our most recent prospectus.

What is Equity Crowdfunding?
The above term, previously only seen in the financial press, is now being seen in main stream media as well. Equity crowdfunding service providers are licensed by the Financial Markets Authority under the new Financial Markets Conduct Act. There has been a rush of registrations and there are now 7 licensed providers. So what is equity crowdfunding? It is a mechanism enabling a broad group of investors, to fund start up and growing businesses, in return for equity (that is, shares in that enterprise). There are limits as to how much can be raised annually. We believe that potential investors need to be careful. Crowdfunding rules make it quicker and easier for small companies to raise money. Instead of detailed documents companies usually have to publish when raising money from the public, they only have to provide basic information on the crowdfunding service website.  We are concerned that potential investors will find it hard to do the necessary due diligence. It should be noted the riskiest businesses to invest in are start ups or those companies in their infancy stages. Conversely if things go well, returns can be good. We believe equity crowdfunding is fashionable (a bit like non-prime mortgages were ten years ago) and not adequately regulated. We are concerned that investors may not be fully informed of the risks. We advise caution.

Where are Interest Rates Going?
Earlier this month we reduced the interest rates that we are offering to investors. This is in response to the lower interest rates being offered in the market place. In early September the Reserve Bank lowered the official cash rate from 3.00% to 2.75%. It is expected to do so again next month or in November, dropping the rate from 2.75% to 2.50%. A further cut may occur next year as well, depending on the state of the economy. Investors will start seeing steady drops in what the banks will be offering. We consider our rates still to be reasonably attractive in the current market.

Next Interest Payment
Our next quarterly interest payment will be made on Wednesday 30 September 2015. Direct credits will be processed that evening, with cheques (if applicable) and paperwork being forwarded during the week.

If you have any questions about your investment, please do not hesitate to contact James Lockie on 09 526 7800 or by email to  Our website is          

If you want to invest more funds, you can obtain an investment statement and application form from Computershare Investor Services, our securities registrar.  Their freephone number is 0800 500 602


Your continued support is appreciated.