Asset Finance finds investors without a guarantee 03 August 2010 4:44PM Sophia Rodrigues Asset Finance doesn't have the benefit of a government guarantee or a strong credit rating but the company has proved it can withstand the tough environment currently faced by finance companies in New Zealand. Not only has the company managed to post a profit in the year ended March 2010, it has also ensured that this has happened without a shrinkage in the balance sheet.Asset Finance was one of the first finance companies to voluntarily withdraw from the retail deposit guarantee scheme because it was certain it would not get the minimum credit rating to qualify for an extended guarantee. The company was right, because the credit rating it received was a B with a negative outlook.Despite the lack of a guarantee, Asset Finance managed to grow its debentures in the year ended March 2010 to NZ$18.6 million from NZ$18.0 million the year before. The company also simultaneously succeeded in increasing its loan book to NZ$20.9 million from NZ$19.8 million a year earlier.Net profit for the year rose to NZ$0.6 million from a loss of NZ$0.4 million the year before.The company's lending, however, does not reflect the low interest rates in the economy, at least if one goes by the Reserve Bank's cash rate, which was at record lows of 2.5 per cent from last March until June this year. The weighted average rate of the loans increased to 25.64 per cent from 23.16 per cent a year ago. Nearly 55 per cent of the company's lending is for personal loans while the balance is towards business loans.The weighted average interest rate on debentures fell slightly, to 10.60 per cent from 11.51 per cent the year before. The company currently offers 11 per cent for five-year debentures and 9.25 per cent for 12 months.Asset Finance expects it will need more capital to meet the RBNZ's regulation on minimum capital ratio that comes into effect in December.