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One of New Zealand's biggest finance companies, trying to set itself above the fray of collapsing rivals, is changing its pitch to the public - now it's more than just an interest rate and reassuring voice.
Hanover Finance's new advertising campaign is pushing where its money ends up, and not just how much of a return the "mum and dad" investors will be getting.
Last week, it unveiled annual profits of $44.9 million, up 7 per cent on a year earlier.
Its healthy financial state compares with many of its lesser rivals, which are struggling to keep money flowing in from spooked retail investors.
Consumer lender Five Star Finance went into receivership last week - the third finance company to collapse within nine days and the seventh to go under in 16 months.
A cascading effect of depositors wanting their money out of the sector is starting to bring trouble to some companies that previously had few problems with their loans.
Five Star was listed by Bondwatch as a "G6" company. This is below what many consider to be "investment grade", with a G6 rating being described as "an ability to meet current obligations dependent upon favourable economic and/or business conditions, concerns about security over the longer term".
Hanover Group chief executive Sam Stubbs says his company's new approach to advertising - showing the range of property developments that are funded - tells people where their money is going to, rather than just the return being offered.
However, the new campaign is not a reaction to the most recent bout of finance company collapses. "This is a direction we decided to embark on about six months ago, and we've carried it out," he says.
"I understand these are more 'interesting times' in the sector.
"We wanted to carry this out principally because business was going well for us. If you look at our results, you'll see that business is going just fine for us.
"Secondly we believe you should never delay being more transparent about what you do."
Stubbs says Hanover has paid out $280m in interest over the past five years. "This has generated considerable loyalty, leading to investment and re-investment of more than $2.85 billion in the past five years."
Hanover's message of having a wide range of property investments is "more relevant now" after recent problems in the sector.
Stubbs says: "The people understand what sort of company they are investing in, so we stuck to our guns and launched our campaign.
"We're absolutely delighted with it and we've been getting a very strong response, which is the response we hoped for, which is 'now we understand what Hanover does'."
One of the newer companies on the finance company block is the Auckland-based property lender Rifleman Finance.
It decided not to go ahead with a big advertising campaign to retail investors last year, after the collapse of companies such as Provincial and Western Bay.
Managing director Murray Greer says it has only recently returned to advertising for deposits, but in light of the new collapses this is not worth continuing with.
"We decided three or four months ago that the time was right and we'd start advertising," says Greer.
"We had committed to the space and purchased it through media placement people. And two weeks after that Bridgecorp went down. Obviously in the past couple of weeks it's been a dead duck."
Rifleman Finance may continue advertising its lending services, but it will not continue looking for new deposits in this way.
Instead, the company is getting its money from financial institutions, both offshore and local.
Despite uncertainty around the global credit squeeze, Greer says Rifleman only does "back-to-back" deals, whereby it lends money once it has organised the funds on the other side.
"We won't make a commitment to lend money unless we have a commitment from the funder to lend it."
In this current climate, Rifleman sees good business opportunities for lending. "We are going through that debate internally at the moment, we think there will be some very good opportunities for us over the next few months," says Greer.
"I wouldn't say we are going to be aggressive, but we are definitely looking for opportunities to lend now."
Those on the other side of the finance company equation - people who've lent money from them to buy properties - are understandably nervous about what might be happening to their money.
Director of mortgage broking company Hybrid Group, Kieran Trass, warns those who have mortgages or loans with finance companies should be careful.
Banks have tightened their lending criteria and there is a risk of the finance companies, or their receivers, "calling up" loans.
Trass thinks that it will be difficult for receivers to sell on some of the higher risk loans that finance companies have made.
"It is possible, it's a real possibility. It may or may not happen but they have got the right to do so in most mortgage documents. The receiver might say 'we don't want to ride this risk, we want to sell this loan'."
Andrew Dinsdale, a finance and property specialist at accountancy firm KPMG, says while it is true that lenders have the right, in certain circumstances, to call in loans, this does not "tend to happen". Call-up facilities are not used unless a lender defaults in some way.
Even high-risk property loans are popular to buy, and a receiver will package up the loans of a collapsed finance company and look for buyers.
"There are plenty of businesses that would fill this gap," says Dinsdale.
It is easier to sell a loan book of property lending, since it's unusual for property values to fall - a different matter when it comes to loans for used cars or appliances.
John Albertson, CEO of the New Zealand Retailers Association, says he has not heard anything that will indicate any change to the terms or conditions of the hire purchase deals organised through Five Star Finance.
And Dinsdale says there will be no change to the terms of a hire purchase loan just because the original lender goes into receivership - a customer will not be asked to pay back the loan any differently unless they default in some way.
