May 2021 Monthly ReportCapspace Private Lending Fund
Strong consistent returns providing Investors with income and capital stability
The Directors monthly review of our SME loans found that the portfolio is in order with all loans performing as documented.
A number of loans were repaid in May, with these funds quickly reallocated to new SME borrowers to ensure that investor returns are maintained. The combination of on time repayments of existing loans with additional new loans to high quality borrowers resulted in a change to the portfolio LVR. The current Loan to Value Ratio (LVR) is 64%, noting that your (and our) capital remains very well secured.
The Reserve Bank of Australia (RBA) official cash rate remains at the record low 0.10% for the foreseeable future. By supporting SME businesses, Capspace at an 8% per annum yield, is paying over 20 times the interest rate of current major bank 12-month term deposits, with the interest paid monthly into your account.
Inflation Concerns Come To The Fore
During May, financial markets considered the impact of the current and future levels of inflation. Central banks around the world remain primarily focused on the support of their economies and the return to full employment following the pandemic driven recession. However, recent data on inflation shows that prices are rising, driven by the surge in the global economy following unprecedented levels of government fiscal support and monetary policy driven by ultra-low interest rates.
Inflation is a critical part of the data assessed by central banks in determining the official level of interest rates. Already we are seeing long term interest rates start to rise and any evidence of a sustained increase in prices and inflation will have a major impact on not only interest rates going forward but volatility in financial markets. Watch this space carefully.
CAPSPACE a Business Partner, not a Bank
Capspace is built on our values of client service, trust, transparency & integrity. We work with both investors & borrowers to create solutions to financial problems when others cannot.
Please take the time to watch our short video (3 minutes) that gives you an insight into your investment at work.
Thank you for your investment, and the support you provide to SME businesses, the engine room of the Australian economy.