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All individuals, Self Managed Super Funds (SMSFs), companies and trusts that meet the criteria of a Wholesale Investor (or ‘Sophisticated Investor’) as defined under the Corporations Act 2001 (Cth) can invest in Commercial Real Estate Debt through Zagga.

The minimum investment is $100,000. This applies to direct investments as well as investments via a Fund.

There is no maximum to the amount you can invest. By fractionalising all our investors’ funds, you can fully fund a loan, invest directly across several loan opportunities, or invest via one of our Funds to enable you to diversity your investment portfolio.

There are a number of methods to diversify your investments through Zagga:

  • loan purpose (land-bank facility, construction, residual stock, bridging loans)
  • property type (residential, commercial, industrial or vacant land)
  • property location (metro, regional, state)
  • loan term
  • loan to value ratio (LVR)
  • Security is always 1st registered mortgages and can be over residential property, commercial property, industrial property or vacant land.

Investors who choose to invest via one of our Funds enjoy natural portfolio diversification from the diverse, carefully selected mix of loan types in which the Funds invest.

Your investor returns will be paid per the terms of each investment opportunity and is generally the Borrower interest rate less Zagga’s Loan Management Fee.

Interest rates are set individually for each loan transaction and are based on the Zagga Credit Assessment Score. This is calculated on a borrower’s credit history, size of loan against value of the security property (LVR), quality of the security and other loan application information.

You can choose the loans which you believe suit your specific risk and return requirements. Generally, the riskier the loan, the higher the return. To mitigate the risk for our investors, all loans approved through us:

  • are secured by a registered first mortgage over Australian real estate
  • have undergone a thorough credit assessment
  • are to creditworthy borrowers who are not bankrupt or insolvent.

If you decide to invest directly, the investment term is for the duration of the loan that you have opted into. Therefore, if you agree to fund a 12-month loan, your money will be committed to the loan for the full duration, unless the loan is repaid early.

If you choose to invest via one of our Funds, the minimum investment term is determined according to the terms of each Fund:

Zagga Feeder Fund

  • Minimum lock-up period of 12 months
  • Notice Period – 90 days

Zagga Wealth Fund

  • Minimum lock-up period of 3 months
  • Notice Period – 30 days


Please note:
Investment Term is a guide to assist with investment decisioning. Construction funding has a high probability of term extensions, which can be caused by weather delays, supply chain disruptions, market risk for sale, funding risk for refinance, administrative and regulatory authority delays, or any other change in market conditions. Any ‘Minimum Investment Term’ relates to the minimum period in respect of which Interest is payable to the Investor.

Investors are contracted to the full term (including any extensions) of the transaction. An investor may not withdraw from the transaction prior to complete discharge of the transaction, except with Zagga’s express written consent, which is given entirely at its own discretion and which may be withheld.

Zagga has never lost money. The business has zero realized credit losses across over $1.5Bn of loan originations dating back to inception in 2017.

Zagga’s Management and Board has significant experience across the real estate sector in operational, lending and recovery roles, focused on achieving superior risk-adjusted returns for our investors.

Our proactive management of all borrower facilities means we are constantly stress testing all our loan exposures to changes in rental yields, capitalisation rates, general market conditions and the effects of these on all factors and valuations.

Like any type of investment, potential investors should always understand the risks involved and we encourage all our investors to conduct the due diligence necessary to make the best investment choices for their risk appetite and investment criteria.

All investments carry some degree of risk, and generally, higher rates of return are associated with higher risk of loss of capital invested or investment returns.

Before you make an investment decision it is important for you to identify your investment objectives and the level of risk that you are prepared to accept. Zagga provides a tool to assist you in determining your investment objectives and risk tolerance, however Zagga does not provide you with personal advice that any investment you make will be suitable for your personal circumstances or that the investment will meet your investment objectives. Therefore, we recommend you seek independent financial advice before making a decision to invest.

The significant risks in investing funds to be advanced under a loan include:

  • Credit risk

The risk of loss arising from the failure of a borrower to repay some or all of the money they owe.

  • Borrower defaults

If a borrower defaults, there may be shortfalls where the sale proceeds of the security property are not sufficient to recover in full, the invested funds and costs incurred by the Trustee in enforcing or recovering the repayment of principal and interest under the relevant loan.

  • On winding up of the Trust

After trust property has been realised and costs and other expenses have been deducted, if there is a negative dollar amount (shortfall) in the calculation of the entitlement of an investor to a distribution, the Trustee may ask the investor to pay such shortfall if the Trustee in its discretion, believes to do so is in the best interests of all of the Trust’s investors, requiring the investor to have contributed more than the original principal invested.

  • Term of investment and liquidity risk

Subject to the terms of the Trust Deed, once you have agreed to invest funds in respect of a particular loan, you are committed to the investment for the full duration of the loan term, which can range from three months to two years. Therefore, once exposed to a loan, your investment is essentially illiquid in nature. You may be unable to convert to cash, the portion of the principal component of a loan you agreed to fund. You must take this into consideration when deciding on what loan types will be suitable for you in light of your overall investment portfolio and needs.

We acknowledge the risks of investing to fund loans and have put in place many checks and controls to mitigate your exposure to risk:

  • all applicants undergo rigorous screening including a full identity check, credit history check to determine their expected ability to service debt, and risk-assessed by our team of experienced credit professionals
  • all loans are secured by a registered mortgage over residential property, commercial property and/or land, in addition to any other security that might be required from a borrower as part of the loan approval terms
  • investors’ money and borrowers’ repayments are held separately from Zagga’s own assets, in a bank account in the name of the Zagga Investments Lending Trust. Loan funds are only released to the borrower when the loan is finalised and settled by our solicitors
  • we monitor all loans and borrower repayments closely and will take immediate action if a borrower fails to meet their repayment obligations.

Despite these measures, if a loan default occurs, there is a risk that an investor with a beneficial interest in the loan:

  • may not receive all of their monthly payments
  • could lose a portion or all of the principal amount they have invested to fund that particular loan,
  • could potentially be required to contribute towards any shortfall on winding up of the Trust.

Therefore, you need to be comfortable with the level of risk you are exposed to when choosing the risk level of the loans you are willing to fund, the terms of the Trust Deed, and investing in this manner generally.

It is important to note that while you, as an investor, have a beneficial interest in the loans that you have invested in, only the Trustee of the Zagga Investments Lending Trust has the discretion under the Trust Deed to exercise a right in respect of loans that form part of the trust property. The Trustee may, but is not obliged to, consult with investors exposed to a loan about how the Trustee should exercise the rights attached to that loan, including rights to enforce, compromise or waive repayment of the loan.

You should be aware that Zagga accepts no risk whatsoever, nor gives any undertakings regarding the prospects of any loan or that it is a suitable investment for you. Zagga makes every effort to gather all relevant information, applies generally accepted credit principles in assessing the loan, and uses a well-defined matrix to determine a Credit Assessment Score. You must review all available loan and Trust Deed documentation, satisfy yourself as to the risks involved with investing to fund a loan, and understand that you will bear any losses in proportion to your fractional share of each loan in which you are invested.

A fractionalised loan is divided into multiple, smaller amounts enabling investors to spread their exposure to risk by diversifying across a variety of loan and borrower types.

Zagga fractionalises loans into $100,000 amounts, so for example, if a borrower requires a loan of $1,000,000, this loan is fractionalised i.e. it is broken down into 10 multiples of $100,000. As an investor, you may lend the full amount, or in multiples of $100,000.

Fractionalisation allows multiple investors to take part in a loan, each with their own fractionalised participation.

Investors’ fractional share of the loan and underlying security is protected by our unique Zagga Investments Lending Trust structure. Each mortgage is individually registered in the name of Zagga Investments as trustee for Zagga Investments Lending Trust, and each investor is recorded as a beneficiary for their fractional share of the loan and underlying security in a specific sub-trust. The Trust has been specially established to manage investments in loans, together with their corresponding security.

Once a borrower submits a loan application, we will conduct a thorough assessment of their financial position. This includes an examination of:

  • their financial situation
  • credit history to determine their expected ability to make monthly repayments (serviceability)
  • any prior defaults or insolvencies (credit history)
  • suitability of credit product (requirements and objectives).

If a borrower’s loan application is approved, we will assign a credit score that reflects their credit risk, based on the Zagga Credit Assessment Score, and will assign the applicable interest rate to the loan.

We do not accept applications from borrowers with past insolvencies or bankruptcies and reserve the right to decline any loan application at our discretion.

To ensure that we maintain an ‘arms-length’ relationship amongst borrowers, investors and Zagga, we have set up processes and structures to ensure that investors’ funds and borrowers’ repayments, are managed by a separate trust structure, the Zagga Investments Lending Trust.

Each loan is separately established within the Zagga Investments Lending Trust. Investors’ interests are not pooled. This is to protect investors’ funds and to ensure that activity in one loan does not affect another. Zagga Investments Pty Limited enters the loans as trustee of the Zagga Investments Lending Trust, and holds the associated rights and benefits in respect of the loan and the mortgage security, and amounts paid by a borrower as trustee for the investors. Each investor investing in a loan has a beneficial interest in the loan and the security proportionate to the amount that the investor invests.

Your satisfaction is of utmost importance to us so if you have a complaint about any part of our service, we would like to talk to you so we can try to fix the problem. There are a few ways you can lodge your complaint:

  • send us an email
  • call us on 1300 192 442 from Australia, or +61 466 617 422 from overseas (9am to 5pm Mondays to Friday, Sydney time, except public holidays)
  • write to the Complaints Team at PO Box R1448, Royal Exchange NSW 1225.

Please refer our Public Complaints Policy

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