FAQs

Secura Funds raises money direct from investors and provides loans to property developers and other property-based borrowers through our investment fund, the Secura Income Fund.

There are two types of mortgage fund. These are contributory funds and pooled funds. A contributory fund gives investors the freedom to invest in their choice of any of the fund’s available mortgage loans (called “Sub Schemes”). By contrast, in a pooled fund, investors invest in a ‘pool’ of mortgages. They cannot choose if they do not wish to participate in a particular loan within the pool.

The Secura Income Fund is a contributory mortgage fund. We offer investments in Loans secured by first or second registered Mortgages over legal interests in real property in Australia. Each Loan approved by Secura is known as a Sub Scheme and is separate from other Sub Schemes. A Sub Scheme will generally have more than one investor.

You can select one or more Sub Schemes for your investment funds. Prior to investment of your funds, you must expressly choose to invest in the Sub Scheme. Your entitlement to income and capital is based only on your investment in a specific Sub Scheme. You do not have any right to the income or capital of any other Sub Scheme of the Fund. Secura does not invest your funds in a Loan without your approval.

The Mortgages are generally registered in the name of Secura as mortgagee. In some cases of larger Loans, a sole purpose company may be incorporated by Secura to act as mortgagee of a specific mortgage, in which case, Members will also be offered a nominal shareholding proportionate to their investment.

Investment is open to individuals, companies, trusts and superannuation funds, and any other form of legal entity operating in Australia, but you must be a Wholesale Investor.

For practical purposes, this means:

  • You must invest $500,000 or more with us.
  • You must provide a qualified accountant’s certificate that is not more than 2 years old, evidencing that you satisfy one of the following tests:
    – You have net assets of at least $2.5 million
    – You have a gross income for each of the last 2 financial years of at least $250,000.

You can invest by applying to become a Member of the Fund and by approving a specific Loan for your investment funds.  To apply, you should complete the Application Form and the Identification Check provided with the Information Memorandum. Before your investment funds are allocated to an investment, we will send you a Mortgage Summary for your approval and you must sign and return the Investment Approval accompanying the Mortgage Summary.

Click here if you want more information on investing.

No, there is no cooling-off period. Upon receipt of an Investment Approval and allocation of your funds to a Sub Scheme, there is no cooling off period and you have no right to withdraw from a Sub Scheme.

No application fees or withdrawal fees are payable by Members.  No on-going fees or charges are imposed on Members of the Fund, if the Sub Scheme Loan runs to maturity without default.

For treatment of our management fees on default by the Borrower, see “What happens if a Loan goes into default?” further down this page.

The interest rate for each Loan is specified in the Mortgage Summary. The interest rate offered for investments in Sub Schemes varies from time to time due to changes in market interest rates and individual Loan terms. We negotiate at a one-on-one level with Borrowers and that rate is passed on to our investors. We do not offer a standard interest rate across all Loans. Generally, once an Investment Approval is accepted for a particular Sub Scheme, the interest rate is fixed for the Loan Period.

The term of your investment commences on the day we allocate your investment funds to a Sub Scheme.

No. New investment funds are not placed in a Sub Scheme that has a Loan in default, subject to one exception. Some investors may authorise investment in a Loan that is in default, in order to take advantage of the default interest rate (typically 6% or more above the standard rate) and accept the risk associated with the default.

We only approve investment by these investors if they have given both a general approval to such investments and a specific acknowledgment for the designated loan, including an express acceptance of extra risk. They will typically be investors who have no need for regular cashflow and are prepared to wait for their return.

No, there is no entitlement to withdraw from a Sub Scheme investment before the end of the Loan Period. An application for early withdrawal before the end of the Loan Period due to unforeseen exceptional circumstances or hardship will be considered, providing a substitute investor can be placed into the investment.

When a Sub Scheme loan is repaid, your funds are held in a Trust Account pending receipt of your instructions. We will send you information about alternate Sub Scheme investments or you may elect to withdraw your funds.  Pending receipt of your written instructions, your funds will be held in an Interest Bearing Deposit.

Loans are repayable at the end of the Loan period but are not always repaid on that date.  Repayment of your investment funds will be available when the loan repayment is made.  We have the discretion to enforce the higher rate of interest in the case of late repayment but we do not always do so. If the Loan is not repaid on time, you will be advised of an estimated time frame for repayment and interest will continue to accrue until the Loan is repaid.

Repayment of a loan by a Borrower before the end of the Loan period occurs from time to time, e.g., upon sale of the Sub Scheme Property by the Borrower. Early repayment will be subject to the terms and conditions of the Loan and may attract an early repayment charge that will be passed on to you as an investor.

In some circumstances, a Loan may be extended. This can occur if the loan conduct has been satisfactory. A new valuation of the Sub Scheme Property will be obtained, unless the extension is for a short period (less than 1 year). At that point, we will write to the Members in the Sub Scheme to inform them that renewal negotiations have commenced with the Borrower and to quote an indicative interest rate for the new Loan Period.

You may then elect to renew or to redeem your investment funds at the end of the Loan Period. When the loan renewal process has been satisfactorily completed, you will be provided with a Renewal Form, detailing the new Loan Period and interest rate.

If you wish to renew your mortgage investment on the terms offered, you are required to sign and return the Renewal Form. If you want to redeem your investment funds, you must notify us in writing within 14 days of receipt of the Renewal Form (or any longer period determined by us).

We provide you with a Mortgage Summary for each proposed investment and ask that you sign an Approval Form.  The Mortgage Summary provides the following information about the Sub Scheme:

  • Commencement date of the investment.
  • Your investment sum.
  • Total Loan advance.
  • Loan Period.
  • Interest rate payable to you.
  • Frequency of interest payments.
  • Borrower’s name and assessment of creditworthiness.
  • Details of Sub Scheme Property.
  • Amount, method and date of valuation of Sub Scheme Property, and LVR.
  • Mortgage details, including ranking, and details of any other security.
  • Insurance details.
  • Details of the basis and frequency of any interest rate review.

You will also receive:

  • Periodic interest statements, matching the term of your Sub Scheme investments (typically monthly or quarterly); and
  • Information concerning new Sub Scheme offers.

Return of capital and payment of interest on funds invested in Sub Schemes is not guaranteed by Secura Funds. Your investment in a Sub Scheme will be secured by a registered mortgage over real property that has been the subject of an independent valuation at the time of loan approval.

The LVR for each Sub Scheme is disclosed as part of the application process. You should carefully read the section of the Information Memorandum on the Risks of Investing and you should make your own assessment before approving the allocation of your investment funds to a particular Sub Scheme.

If a Loan goes into default, we increase our level of management of the Loan and Mortgage and we take steps to have the Borrower rectify the default.  If the default is a financial default and is ongoing, we report regularly to Members of the Scheme about its status. If the default is not rectified, we take steps as mortgagee to realise the Sub Scheme Property and any other collateral security.

If the Borrower defaults, we charge the Borrower for management fees and expenses incurred in rectifying the default and recovering secured moneys.  Our fees and expenses will only be deducted from Members’ investment funds if there is a shortfall upon realisation of the Sub Scheme Property and any other collateral security. The balance of Member’s investment funds will be paid to Members. If a management fee is to be deducted for a particular Sub Scheme, this will be disclosed to you.

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