EVEN now, after Funda has been placed in liquidation, Richard and Marlene Lloyd find it hard to believe.
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After all, they were neighbours and best friends with Funda co-founder and director Nathan Wright and his wife Carol.
They'd known each other for decades, spent their weekends together, their daughter even called the Wrights her second mum and dad.
The Lloyds said after 20 years of "living in each others' pockets" they came to regard the Wrights as family.
So when they found out their "best mates" were starting up non-bank lender Funda and were looking for money, they wanted to help.
The deal included loan security documents, in the form of personal guarantees from the directors, and the Lloyds said because of their friendship, they trusted Mr Wright implicitly.
It's a decision that has caused them to lose their life savings.
More than $2.1 million has been wiped from the Merewether couple's self-managed super fund and they now face retirement on the pension.
"Around 20 years ago the Wrights bought the place next door and we got to know each other," Mr Lloyd said.
"Carol and Nathan became our best mates, we were very close and did nearly everything together. "
Mrs Lloyd said when she learned in 2014 over social drinks that Funda was looking to build a bank of cash, so it could provide loans to small businesses and individuals, she immediately thought they could help.
"Nathan used to say the people he trusts would fit on a tiny piece of paper," she said.
"We were always on that piece of paper. That was the kind of relationship we had."
The Lloyds had previously been involved in a small development with the Wrights, and so decided to initially loan Funda $100,000 in August 2014 to evaluate how things went.
"Nathan is an ideas man, he likes to come up with the big ideas and he's always had his iron in a lot of fires, and looking out for different opportunities," Mr Lloyd said.
"And he's a really good salesman. He's talented in that way."
Gradually they increased their loan to $2.1 million, nearly the whole total of their life savings.
"People have said to us, well you shouldn't have put all your eggs into one basket and I know that," Mr Lloyd said.
"I know that I'm not real smart, but I'm also not that dumb. But we trusted Nathan implicitly, we gave him just about everything we have. He once told me if anything ever happened with Funda, he'd do everything he could to get people's money back, sell their house, he said he'd do whatever he could."
"We thought we were set up, because throughout the years we've never lived a flash lifestyle," Mr Lloyd said.
"The only flash thing we did was take the kids to the snow for a week once a year."
The Lloyds said they always understood that Mr Wright had a different approach.
As a man with an appetite for the good life, the 49-year-old loves expensive sports cars, exclusive adventure trips and even holidayed at the iconic Raffles hotel in Singapore, one of Asia's most coveted addresses.
They believed he subscribed to the old adage 'you have to act rich to be rich'.
"He was a Tony Robbins follower and believed if you want to raise your financial status you have to be involved with richer people," Mr Lloyd said.
"So he got involved in a Porsche group and things like that."
In contrast, Mrs Lloyd said her children call her a "miser", she has always felt the need to "shop specials and live cheaply" so her family was "safe".
"We drive around in shitty old cars and the kids always had hand-me-down clothes, that's the lifestyle we live," Mr Lloyd said.
"We used to say when we finish up work we're going to go to the pub for something to eat and we won't look at the right-hand side of the menu where all the prices are, because that's what we always do.
"That's what we were looking forward to and we were pretty close to getting there. But that's all disappeared now. Everything we worked 45 years for is gone and we need answers from the people tasked with looking after it."
According to Mr Wright, he and co-director Mark Owen are guilty of nothing more than being victims of the pandemic and wider economic conditions.
"This is not a situation anyone predicted or wanted to be in," Mr Wright said.
"We honestly thought that right up to March that we still had some good opportunities, before we started negotiating and highlighting the issues to the creditors."
Mr Wright admitted he had lost friends through Funda's collapse, but said he was "amazed" at the response from some creditors.
"There's many, many friendships that have been tainted one way or the other and it's devastating to lose lifelong friends," he said.
"And it's probably more the lack of trust and respect. We've only ever provided the truth."
He dismissed claims that he told people that their loans to Funda or Collaborating were backed by bank guarantees, but confirmed they were backed by personal guarantees.
"The documents, the inter-company loan documents, both directors, Mark and I, had signed as guarantors," he said.
"In saying that, could we at the time, or at any time in the future have met all those guarantees? That would depend on the time and space at the time, but we never intended it to get to a point where there was a problem."
Mr Wright said if there was a way he could "fix things", he would.
"There's people out there who have lost small amounts of money and large amounts of money, and my sympathy extends to them greatly, to every single one of them," he said.
He admits his personal guarantees mean very little, because he has few assets in his name and says he never made a secret of that.
"Every businessman in Newcastle has signed a personal guarantee for whether it's a trade account at Bunnings or a million dollar loan off a mate," he said.
"But you'd also understand the majority of businessmen that are well structured and have been well advised by their accountants for decades generally don't own much. My structure hasn't changed for decades.'
For a long time after being told Funda was in dire financial trouble, Mrs Lloyd said she refused to believe it.
She still gets upset at the loss of the friendship because it meant so much.
"I still had faith in Nathan, it look me 12 months into all of this to come to terms with it," she said.
"I couldn't come to grips with it, I thought there is no way Nathan would let this happen because I knew his mother was in it, his brother was in it, Carol's relatives were in it and us."
She said there were no warnings and she couldn't understand how Funda collapsed so quickly.
"There was no inkling anything was wrong until it was too late," she said.
"They were paying our interest, they had up to 12 staff and we were given no reason to think there was anything wrong until our money, and everyone else's, was gone."
Mr Lloyd admits during a meeting with Mr Wright about Funda's failing financial position in July 2022, he "got cranky".
After that, the Lloyds said Mr Wright went to ground and became hard to contact.
"The two families just never came back from that day, it's very, very sad," Mrs Lloyd said.
"No, that was it. It was heartbreaking and still is."
The Lloyds said they had discussions with both directors leading up to Mr Lloyd's retirement last year.
"I fronted both Nathan and Mark on at least six occasions," Mr Lloyd said.
"I told them our plan was to live off the money we'd given them for Funda and neither of them said anything or gave any indication anything was wrong."
In response, Mr Wright said both directors had been "nothing but truthful" with the creditors and had tried to negotiate a way to keep the business running.
He said it was now up to liquidator Bradd Morelli, of Jirsch Sutherland, to determine what went wrong, and that the creditors had not paid for his, or Mr Owen's, lifestyle.
"That's obviously were the facts are going to come out," he said.
"At the end of the day we tried to do everything we could to save the business."
Donna.page@newcastleherald.com.au
