Business Finance starts afresh 14 April 2010 4:27PM Sophia Rodrigues Business Finance Limited is set to tap deposits from retail investors as the company makes a fresh start after getting a combination of equity and loan injection from Australia's Liberty Financial in November last year.The company has filed a prospectus for issue of up to NZ$25 million of debentures. It recently obtained a BB rating from Standard & Poor's.In November 2009 Business Finance received an overall investment of about NZ$22 million from Liberty. This investment comprised NZ$2.05 million for a 50 per cent equity stake, while the remaining NZ$20 million was received in the form of unsecured 10-year loans that were reinvested in mortgage notes of Liberty.Business Finance is covered under the New Zealand government's retail deposit guarantee until October 2010 and is still deciding on the merits of applying for an extension. This means the debentures may not have the benefit of extension but the company said the deposits are being guaranteed by Liberty. The guarantee is irrevocable and has been reviewed by S&P as part of its rating process though no Australian independent legal advice was obtained.In addition, the deposits have an indirect guarantee from the mortgage-backed notes as the two companies have agreed that the principal amount of the loan will be reduced to the extent of any permanent reduction in the principal amount of the notes.Business Finance currently has no deposits on its books, having repaid all the existing deposits prior to March 2009 and has advances of NZ$1.78 million with no provisions against them as all non-recovered balances from previous impairments have been written off.The company is planning a foray into short-term residential finance, apart from its traditional equipment finance business.