How Does It All Work?
Deciding where to invest can be a difficult decision. We are not high risk and as such are not high reward. However, we do provide a safe investment opportunity with a reliable monthly distribution (Provident Diversified) or quarterly distribution (Northern Alliance Trust). We have consistently provided an 8+% return to our NAT Shareholders and 6% to our PDMC Unitholders.
How does it work?
Essentially, Northern Alliance lends money to individuals and businesses that can't secure financing with a bank. Northern Alliance is an equity lender and our loan is always secured against land. The risk and rates are a direct factor on the amount of equity that is left in the land. The interest rates to borrowers range from 10% to 16%. We have a rigorous process in place for underwriting our mortgages that ensures only the best mortgages are funded and placed in the Trust’s portfolio.
What am I purchasing?
If you are investing with NAT, you will purchase either A or B units (shares) of a Quasi Mutual Fund Trust (registered with CRA).
If you choose to invest with PDMC, you purchase units of a Mortgage Investment Corporation.
How do I invest?
You can invest in a number of ways. We can work with Registered Investments (RRSP, RESP, LIRA) or Non Registered Investments (TFSA) through our Registered Trustee or we can accept cash investments directly into the Trust.
How safe is my investment?
Before we invest in a mortgage Northern Alliance conducts a full underwriting analysis which considers the borrower's ability to repay, the type and location of the property and many other factors to increase the probability of a safe investment.
All loans are backed by real property so if a borrower does not make payments, Northern Alliance has the right to foreclose, take ownership, sell the property and regain the principal and unpaid interest. We do not invest in real estate development projects as they tend to be higher risk.
Who regulates Northern Alliance?
Northern Alliance is regulated and audited by:
- ASC: Alberta Securities Commission
- BCSC: British Columbia Securities Commission
- FICOM: Financial Institution Commission (BC)
- RECA: Real Estate Council of Alberta (AB)
- CRA: Canada Revenue Agency
- FINTRAC: Financial Transactions and Reports Analysis Centre
Every year Northern Alliance Financial and Northern Alliance Trust are required to complete a full IFRS audit to ensure that all transactions and reporting is accurate throughout the year. Audited statements are sent to the appropriate regulator for review.
How do I get my money out?
If the money is returned within the first year, there is a 5% penalty but the penalty reduces by 1% per year thereafter until the penalty is 0. Northern Alliance has 90 days to return the investment after a request is made.