Fixed Income, Property

Term deposit alternative launched

term deposits alternative

A property development group has launched a lending product seeking capital from SMSFs in exchange for fixed income returns.

A property development group has launched an alternative to term deposits for SMSFs by asking them to provide capital for development projects in return for fixed income returns above six per cent.

Elly Capital, the finance arm of Australian residential and commercial property developers Elly Property Group, stated its new Elly Interest Earners product will provide a fixed income return of between 6.75 per cent and 11.25 per cent per annum, dependent on the amount of capital loaned and the loan period.

Interest payments will be made on a monthly basis, or accrued and compounding monthly will be paid at the end of the term with the principal.

According to the firm’s website, the product is open to wholesale and sophisticated lenders only and the minimum investment amount is $250,000 with loan term ranging from six to 120 months, and the current rates available until the 30 June 2023.

Elly Capital general manager Ebba Lindblom said the new product was suitable for SMSFs, companies, trusts and individuals looking for an alternative to term deposits and that lending was an alternate growth strategy for principal capital.

“By lending your idle capital to Elly Capital, you assume a similar role to that of a financial lending institution,” Lindblom explained.

“As an Elly Lender, instead of directly investing in the projects that the Elly Property Group invests in, you provide a loan to Elly Capital at a competitive interest rate. Your capital is fully secured by our corporate guarantee, protecting you from any potential risks.”

The organisation pointed out the corporate guarantee fully protects the principal amount lent by Elly Property Holdings, which acts as the guarantor, and security for lenders’ funds comes from its portfolio of commercial and residential Australian real estate assets valued at $57 million.

Elly Capital also stated risk is further reduced through operational procedures that includes an in-house building team providing control over the entire development process.

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