Finance company minnow Mutual Finance has collapsed into receivership owing $9.3 million of mostly Crown guaranteed funds to 340 depositors.

The receivership follows that of sister company Viaduct Capital and comes three months after Strategic Finance founder Paul Bublitz took control of Mutual with an 80% shareholding.

Mutual’s trustee company Covenant has appointed Grant Graham and Brendon Gibson of KordaMentha as receivers.

Marac Finance says it has been approved under the extended Crown Retail Deposit Guarantee Scheme.

Marac is a subsidiary of listed company Pyne Gould Corp. The extended scheme covers deposits by eligible investors through to December 31, 2011.

"Marac is pleased to have been among the first to be approved under the guarantee having met the qualifying criteria," chief executive Jeff Greenslade said.

While the extended Crown guarantee would provide investors with comfort, 
Marac was confident it had the strength to stand on its own.

A capital raising is imminent for Allan Hubbard's troubled South Canterbury Finance with the company today admitting further provisioning is required for impaired assets.

In a market update, South Canterbury said it will report a loss for the six months to December due in part to provisioning for assets previously identified as impaired.

South Canterbury Finance has lifted its interest rates on offer to investors, with 18-24 month investments getting the highest increase.

The two-year rate for secured debentures has gone from 5.5% to 7% with the 18-month rate up from 4.5% to 6%.

Close behind, one-year rates are increasing from 4.5% to 5.5% and 30-month rates from 6.5% to 7.5%.

Three-year rates have been lifted from 8% to 8.5%, the four-year rate is up slightly to 8.5%, while the five year rate is unchanged.

Viaduct Capital is back raising money after losing its government guarantee last week.

The company has increased its interest rates on offer to between 4-6.5% for deposits of up to 9 months and 10-10.45% on longer-term investments.

Viaduct Capital chief executive Nick Wevers says the new interest rates reflect the lower costs of operating without a government guarantee.

Mr Wevers blames the abrupt withdrawal of the guarantee on the Treasury misunderstanding its business model.