Investor Newsletter #1 - March 2005

Welcome to General Finance

We welcome you to our first newsletter as an investor with General Finance Limited. We appreciate your support. The purpose of the newsletter is to keep you informed about the company and various financial matters that may interest you. This newsletter will be prepared on a quarterly basis.

More About General Finance

General Finance Limited is a fully owned subsidiary of Cairns Lockie Limited, which is a New Zealand owned and operated residential mortgage origination and management company. The owners of Cairns Lockie Limited are James Lockie and William Cairns, executive directors, who work for both Cairns Lockie Limited and General Finance Limited on a full time basis. General Finance Limited also originates and manages mortgages but offers a fuller product range than its parent. Most of its funding comes from wholesale funders such as Origin NZ Limited which is a fully owned subsidiary of the ANZ Bank. For some of the mortgages we are writing, we are using retail funds such as the monies you have invested with us. We tend to use of retail funds to write shorter term second mortgages and bridging loans. By raising retail funds, it enables us to offer a full and comprehensive range of residential mortgages to our borrowing clients. It enables investors such as yourselves to obtain a satisfactory secure return and to be part of the bourgeoning mortgage sector that is fast become the domain of foreign owned banks and off shore investors.

Our Securities Registrar

One aspect of our operation that sets us apart from other finance companies in the market place is that we have out-sourced our security registrar service. Most finance companies carry out this function in house but we see advantages in outsourcing it. Our securities registrar is Computer Share Investment Services Limited. They act as the registrar for a number of listed companies such as Telecom and for bond issuers such as Vector. They are well known and the investing public is use to dealing with them. We believe that using a specialist registrar we will enhance the experience you will receive at General Finance Limited.

A Typical Loan

This is an example of a recent advance we have made: a customer was selling their own home and buying a section in another town on which to build. They had found the section at a good price and do not want to let it go as it was ideal for their circumstances, but they had not sold their own home. One option was to bridge for six months to allow an orderly sale of their own house. Then they will rearrange their mortgage finances. General Finance provided finance for six months, taking a mortgage over the section being purchased and a second mortgage over their own home. We will be repaid when they sell their home.