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Tim KeithTim Keith Nov 1 1 min read
Tim Keith

November 2021 Monthly Report

High Yields, Capital Well Secured 


Our loan book and balance sheet are growing rapidly on the back of investor demand for higher yields and SME borrower appetite for financial support and advice.

Our loan portfolio is in very good shape. Capspace has maintained its clean balance sheet since the inception of the Fund with all loans operating within agreed terms. The current Loan to Value Ratio (LVR) for the entire portfolio is 54%. This means that for every $54 we lend we hold $100 in real property security, meaning your capital is well protected.

The Reserve Bank of Australia (RBA) official cash rate remains at the record low of 0.10% for the foreseeable future despite current inflationary pressures. By supporting SME businesses, Capspace at an 8% per annum yield, continues to pay over 20 times the interest rate of current major bank 12-month term deposits, with the interest paid monthly into your account.


Is the Asset Bull Market on it's last legs? 


Asset markets globally have performed strongly since the COVID-19 induced lows in 2020. This holds true across equity, property, bond, commodity, and even cryptocurrency markets. Recent market commentary is asking questions on whether this performance will continue in the light of higher inflation which may lead to higher interest rates, reduced central bank and government support, very high relative asset prices, and most recently the outbreak of the mutant COVID-19 strain, Omicron. Capspace has moved to a more defensive view of asset prices given these scenarios. This is reflected in conservative LVRs and credit committee decision making.


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