N1H property private credit fund investors proposal - March 2024

OFFER SUMMARY

Investors welcomed: HNWIs, Wholesale Investors, FoFs and Institutions

Investment Amount: minimum AUD$250,000

Target size: Up to AUD$200,000,000

Current access and manage: AUD$155,000,000 including balance sheet capital

Nature of Fund: Property-backed (residential and commercial) open-end pooled fund or SPV

Historical Performance: 100% target return met, zero capital loss

Investment Term: Options of 1 to 3 years

Inception: Dec 2017

Contact: Ren Hor Wong (CEO) [email protected] or Penny He (CFO) [email protected]

EXECUTIVE SUMMARY

N1H lends to small and medium-sized businesses located in Australia, tapping the strong?2,300,000 SMEs in Australia seeking finance with AUD$20 billion potential market opportunity.?All Loans will be secured by mortgages over property (residential and commercial) located in Australia with personal/directors’ guarantees obtained.

The underwriting, funding, and loan management is performed and managed by licensed AFSL holder N1 Asset Management, a 100% owned subsidiary of ASX-listed N1 Holdings Limited (N1H). N1 Asset Management has a thorough underwriting process and strong credit committee with over AUD$2.3bil credit experience,?to make sure loans are only made to borrowers with sufficient equity in property and have a high probability of success with the business and the ability to exit the loan. The trustee is also performed by N1 Asset Management.

The management of N1 is also overseen by a highly experienced board of directors.

WHO is N1 Holdings Ltd (ASX:N1H)?

N1 Holdings is positioned in the market as a property-backed lender in the Australian SMEs sector, the largest employers group in Australia. N1 is funded by a set of resilient funding source including balance sheet capital, N1-managed mortgage fund and debt facility. With the growth in lending from non-traditional sources, such as alternative banks and non-bank funders and lenders, N1 with its unique competitive advantages is perfectly placed to advise businesses and sophisticated property investors through this changing lending environment and to be the preferred private debt asset manager for HNWIs, family offices and institutions.

The Revenue Model

Our core business is being a private debt provider secured over property, servicing the market of sophisticated investors and SME owners. Revenue from the core business is derived via Net Interest Margin (NIM) and fees. This core business is supplemented by the Company's expertise and operations in the activities of mortgage management and mortgage broking.

During the first half of FY24, we strengthened our core infrastructure to be more streamlined and effective in attracting and deploying capital for optimal risk-adjusted return.

We define our infrastructure as a set of systems along the value chain of capital raising, loans origination, risk management, distribution channels and post-deployment management.

We utilized our core infrastructure to grow the Company's funding size and loan receivables in FY24. The management of the Company has successfully steered the business to impressive growth and navigated the complex funding environment amid the 13 rate rises that Australians have experienced since April 2022.

in FY23, N1's management has steered the business diligently and resolved not to pass on a single rate rise to the back-book of our loan receivables. In doing so, the Company has shown resilience to the surging cost of funds, whilst maintaining our reputation as a lender who cares and values its relationships with our business partners and clients. The new financial performance released in Feb 2024 confirmed the significant growth in revenue, profitability and cash flow of N1 Holdings Limited due to reset of pricing and strong funding pipeline.

Market Opportunities (Australia only)?

Traditional lenders have been retreating from the SME lending space, particularly in sub $10mil deals that might be seem to small for major banks. SMEs are seeking alternative lenders who are more agile and responsive to market demand.

• Australia has approx. 2.3 million SMEs.
• The potential market opportunity of SME lending is about $20 billion.
• 1 in 5 small business owners need cash flow finance at least once a year
• Top reason for SMEs' financing needs is to maintain short term liquidity

WHAT is N1H Unique Strength?

1. N1H has access to strong deal flows which is a major consideration in the lending sector, allowing investment manager to come across quality deals, balancing risk-return ratio, with considerations given to Leverage ratio, security location, borrower financial position, funding purpose and exit strategy.
2. N1H’s (investment manager) multiple business lines with over 2,000 client database provide a robust cross-referral origination network.
3. N1H possesses efficient infrastructure for direct and rapid capital deployment, uniquely positioned as a direct lender in the market that accesses to a large pool of quality borrowers with the ability to deploy capital more capital under current operational capacity.
4. N1H’s internal credit risk team has significant credit?experience with over $2.5 billions settlement in both residential and commercial loans since inception.?
5. N1H has established a vast network of sophisticated mortgage brokers and SME clients which needs in the non-coded lending space.
6. N1H’s fully owned subsidiaries hold multiple licences. N1 Loans holds an Australian Credit Licence #473016, Zillion Finance holds an Australian Credit Licence #389330. N1 Asset Management holds an Australian Financial Services License #477879.?

Current Lending Pool Parameters?28th June 2023

Why N1 can keep lending to high-quality deals?

Origination

1. Well defined product niche and key features
2. Solid credit procedure (credit policy and manual, credit committee policy, etc.)
3. Judgmental analysis, underwriting policy with efficient approval and settlement process
4. Strong quality control
5. Independent security valuation (partnering major valuation firms)
6. Comprehensive credit reporting (partnering major credit reporting providers)
7. Arrears and Default Management (partnering specialist legal and collection agencies)
8. Fraud detection and Prevention (documented manual and policy)
9. Solid risk management procedure including audit, quality control and business continuity plan
10. System support and data security (in-house CRM and loan management system)

Recent Media Exposure

For more details please reach out to [email protected]