Failure to be accepted into the extended scheme could see the Government liable for up to $1.8 billion of deposits included in the present retail deposit guarantee scheme which expires on October 12.
SCF chairman Allan Hubbard yesterday took the unusual step of sending out a letter of reassurance to investors and stakeholders.
Mr Hubbard said the company met the eligibility criteria for participation in the guaranteed scheme and believed it had taken all the steps necessary to be accepted into the scheme.
If it were accepted, investors would have the benefit of the new guarantee from October 12 to December 31, 2011.
A decision from Treasury on the application was expected soon.
"Regardless, all eligible existing and new depositors and investors continue to have the benefit of the current retail deposit guarantee scheme through to October 12, 2010," Mr Hubbard said.
Chief executive Sandy Maier told the Otago Daily Times when contacted that he had not "turned his head" to the consequences of SCF not being accepted into the extended scheme.
He was confident the company would be accepted.
Standard and Poor's had recently downgraded SCF's credit rating but it remained eligible for inclusion in the extended scheme.
Asked about the importance of the company to the South Island economy, Mr Maier said the Government was aware of SCF's size and importance to the economy, and that had given him confidence for the future.
Political sources told the newspaper they were unaware of any meetings between SCF and Government ministers, but that was not to say meetings had not been held at social functions or within the electorates of Cabinet ministers.
Being accepted into the extended scheme was more than just having a qualifying credit rating.
Each finance company was considered on a case-by-case basis but to be considered, they must have the minimum rating, a source said.
Craigs Investment Partners broker Chris Timms said if Treasury did not extend the guarantee, there would be a huge outflow of funds that SCF would not be in a position to pay.
That could mean receivership.
That was the financial aspect on gaining acceptance to the extended scheme, but there were wider ramifications, he said.
Investors were likely to get their money back through the present scheme, but there would be concern about what the effect of SCF failing would have on the investment community as a whole.
"If SCF turned up, you can forget about the rest.
The downstream implications are immense."
SCF had also loaned out many millions of dollars into wide-ranging developments in the South Island, Mr Timms said.
Receivers worked on getting the best outcome for business creditors and although they had the opportunity to run the business on an ongoing basis, it was unlikely that if the Government had paid the money out, it would want to run a finance business long-term.
Given the fragile situation of the economy, it was unlikely the Government would want any part of the operational process.
In his letter, Mr Hubbard assured investors SCF was soundly based and well positioned to meet the challenges ahead.
Recently, Southbury Corporation, which was indirectly controlled by Mr Hubbard and his wife Jean, announced it had injected $152.5 million new equity into SCF.
That followed other measures in recent months, including the appointment of new independent directors and senior managers with the skills to meet the demands of the changed environment.
"I acknowledge that the recent financial performance of the company has been disappointing and this has adversely affected investor confidence.
"But I remain totally committed to ensuring a successful future for South Canterbury Finance.
I am satisfied that we are well on the way to a totally fresh approach to the future and restoration of South Canterbury Finance as a leader in the sector."
That might require the raising of capital and possible sale of non-core assets to ensure compliance with the new regulatory environment, Mr Hubbard said.
