Investor Newsletter – March 2016

Welcome to our March 2016 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.

5,000 Loans
Earlier this year we reached a notable milestone - we have now settled our five thousandth home loan. This is great news. We started writing loans back in December 1998, first under the brand Cairns Lockie and later under a second brand General Finance. Initially we used securitised funding, which all ceased during the global financial crisis. Currently we are writing short term and bridging loans through our non-bank deposit taker, General Finance Limited. We are looking forward to writing more loans with your assistance.

Product Disclosure Statement (PDS)
Until this year, if you were investing money in finance company debentures, corporate bonds, and other financial instruments, you were given a prospectus and investment statement. Over the years these documents have progressively become bigger, as more and more information had to be disclosed. It reached a point where most became obtuse, far too large and confusing to read. This has changed and a new document, a Product Disclosure Statement (PDS) is now provided. These documents are much shorter in length, in an easier to read format and contain essential information only. We have just released ours and we are the first finance company to migrate from a prospectus to a PDS. If you are looking at investing with us, we would be most happy to send you a copy, or alternatively you can download one at http://www.general.co.nz/PDS.htm.

What is Peer-to-Peer Lending
This is a new form of lending which you may have read about in the press. Peer-to-Peer lending is where those with funds to invest, are matched with those wanting to borrow. An intermediary is used, who will manage collections and so forth. The risk still lies with lender, if a loss occurs on the loan. The lender tries to offset this risk by taking a share in a number of loans. For example, you may invest $10,000 and have a small share in up to one hundred different loans. We believe, in the short term, this type of lending will become more popular, but we have real concerns over its long term viability.

Real Estate and Money Laundering
Anyone who has recently tried to open a bank account or invest money will have had to comply with the provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The requirements are strict. There is one sector where money is being laundered and where the requirements are less onerous - the real estate sector. Nominee companies are being used, rapid buying and selling makes tracking the real owners more difficult, and money is still being received directly from overseas with no real checks on how it was earned. Overseas owned companies are also being used. We believe that our legislators are aware of this and further laws will be forthcoming. This will be on top of what was implemented last October (with offshore buyers having to obtain a NZ IRD number and open a local bank account).

Next Interest Payment
Our next quarterly interest payment will be made on Thursday 31 March 2016. 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 jlockie@general.co.nz. Our website is www.general.co.nz. 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 noted and appreciated.