In the latest prospectus the finance company has written off $448,666 in bad loans and as a result its provision for doubtful debts has fallen by $345,132 to $306,310.
Director William Cairns says this is a prudent move and reduces the company's pre-tax profit from $179,578 to $33,909 in the year to March 31.
"Unlike our competitors we have quickly made provisions when required and restructured our lending portfolio."
He says General Finance has managed its liquidity well too. The company had just over $4 million of cash on hand at year end, compared to $1.8 million the previous year.
Cairns says many finance companies have run into trouble over related party lending, however General Finance has none.
The company only lends on residential property and in the past year its loan book has changed significantly.
A year ago around 50% of its lending was on first mortgages, now that has risen to 64%.
"We are aiming to increase our first mortgage component to 90% of our current portfolio," he says. Since balance date it has increased from 64% to 77%.
"This increases the quality of our portfolio, which will give our investors greater confidence," he says. "We are looking more like a building society than a traditional finance company."
Cairns says residential lending is the largest and most liquid niche within the property market and he views it as the safest area to lend in.
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