Complex Lending and Broking for Pallets-R-Us Pty Ltd

The information and data you need to complete this written assignment is presented in the case studies at the beginning of each task.This written assignment covers complex lending and broking and requires you to answer the questions for one (1) of the two (2) available case studies. Each case study focuses on a different lending scenario.

When completing this assignment, assumptions are permitted although they must not be in conflict with the information provided in the Case Studies.You may also be required to source additional information from other organisations in the finance industry to find the right products or services to meet your client’s requirements, or to calculate any service fees that may be applicable.

Identifying Complex Broking Needs

Ray Murdoch and Steve Brown jointly own a successful and growing business that manufactures metal pallets. They trade under the name Pallets-R-Us Pty Ltd. The pallets are manufactured using material that is lightweight and durable. There has also been a very structured approach to the research and development for the engineering and design of the pallets. The pallets are used in all industry sectors. Part of the process involves powder coating the finished product, which is currently outsourced to a local well-established contractor.

It is critical that Ray and Steve’s product meets market needs. They need to maintain sustainable production and operating costs if they are to forecast their sales and cost of sales.

They have a well-established client database that provides them with repeat ‘business-to-business’ dealings. While they have only been trading for 30 months, they have a solid business plan with written supply contracts with three major business clients and several smaller business clients.

Ray and Steve now require finance to assist them with the purchase of a sophisticated machine, using the technical platform system CNC. This machine can be programmed to rapidly fabricate multiple components. The machine has an expected commercial lifespan of at least 15 years with operating software to be updated every three years. This software and upgrades is included in the purchase price of $800,000.They need to import the machine from the US. Initial enquiries with the US supplier have indicated that they will require a letter of credit for the import of the machine.

Their business employs five people and, with the expected increase in business through the automation of production, they have forecast that they will need to recruit an additional two staff members in the next 3–6 months to meet sales/production demands.

Ray has been in the metal fabrication field all his working life. He has an MBA and understands financial management. He also has solid engineering skills and developed the majority of the design works for the business. He is married and has no dependants. His wife is a school teacher and she will be retiring at the end of the year.

Steve worked with Ray at ‘Protech’ as a foreman. His skills are in production and managing project/job flow. He has high level technical skills and can complete works to specification at a high standard.

Steve and Ray have provided the last two years financial accounts for the trading business, as well as interim accounts for the current financial year. Ray’s brother provided business with a loan $500,000 when the business commenced and he is being repaid interest plus a principle repayment of $30,000 per annum.

Applicant information

Client	Ray Murdoch	Steve Brown
Current address:	Unit 43, 25 High St Northville, and has lived there for six years	23 Desmond Lane Northville, and has lived there with Kate for seven years. They own property jointly.
Home phone:	9001 2121	9002 1212
Status	Ray is divorced with no dependent age children	Steve is married with no dependents
Employment	Self-employed business owner	Self-employed business owner
Income	$100,000 per annum	$100,000
Property value	$750,000	$900,000
Cash at bank	$12,500	$9,600
Contents	$100,000	$85,000
Superannuation	$250,000	Steve $350,000, Kate $60,000
Motor vehicle	$40,000	$55,000
Home loan	$250,000 repayments $2,068p.m., P & I, 18 years remaining	$350,000 repayments $2,645 p.m., P & I, 22 years remaining
Credit card	$25,000 limit with debt of $15,000 payment @3%	$10,000 limit with debt of $3,000 payment @3%
Car loan	$0	$15,000 repayment $746p.m., remaining term 4 years

The business

Year 1 net profit after tax	$200,000
Year 2 net profit after tax	$220,000
Current year interim profit (10 months trading)	$200,000
Wages to partner 1 – years 1 and 2	$100,000
Wages to partner 2 – years 1 and 2	$100,000
Principal repayment to Ray’s brother repaid annually	$30,000

Key balance sheet items

Cash	$25,000
Debtors	$220,000
Creditors	$100,000
Notes	The business currently meets all creditor payments at 30-day terms. Debtor collection has been solid. They invoice an upfront payment of 50% of the sale price, which assists in funding their production. They have orders of $1m over the next 3 months and have made an increase in their gross profit margin. The orders are from several clients, so their debtors will be well spread.

Task 1a — Identify the clients’ complex broking needs

Prepare a list of questions that you would need to ask Ray and Steve about their history, experience, business performance and the intended equipment purchase.

In preparing your list of questions you should ensure that you cover the following:

the complex features in importing and purchasing this equipment and benefits that will come to the Company from such purchase
the identification of potential risks in such a transaction and Ray’s and Steve’s tolerance of risk
the financial aspects of the transaction and current financial position of the business.

Developing Complex Broking Options

(800 words)

Student response to Task 1a

The question list which is prepared is focused for the business undertaken by Ray Murdoch and Steve Brown and helps to understand the nature of the business and also its operations. In addition to this, the questions will also be useful in getting an insight in the financial requirements of the business and also obtain useful information about the day to day operations and needs of the business. The question list is also prepared for the reason for assessing and identifying the risks which are associated with the business. The question will able help in identifying the current financial obligations of the clients. The questions are presented below:

Assessor feedback for Task 1a:	Resubmission required?
	No

Task 2a —Develop complex broking options

You are required to prepare a full report addressed to Ray and Steve outlining available loan options; the process and the risks (potential and real) of which they should be made aware.

In a suitable report format you should cover the following:

the parties to the loan
outline the type of letter of credit (LC) likely to be used, the parties to the LC and the high-level steps involved in setting up and establishing LC to enable import of the equipment
the product options that are available to finance an equipment purchase once it has arrived in Australia
your recommendation of best product option, including amount, security/collateral, term, potential interest rate and residual value (if any)
name three (3) lenders that would consider and potentially approve this transaction and advise Ray and Steve about product type, loan term, interest rate, balloon payment (if applicable) and monthly repayment they offer
the procedure to commence the import of the equipment and the loan, including documentation Ray and Steve need to provide
the client responsibilities, so Steve and Ray fully understand the facility being proposed
outline the risks (potential and real) of which Ray and Steve should be made aware
whether personal guarantee will be required from the Director’s spouse
a summary of all fees and charges — including those for setup and those of the lender
advise which relevant disclosures need to be made
a request for client to inform you of any questions about the transaction and/or provide an instruction to proceed.

(800 words)

Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.

You are to write a report to your clients, demonstrating your professional writing skill — not simply commenting on each of the points detailed above.

The use of tables in the report to set out some of the numeric information may be of benefit.

Student response to Task 2a

Dear Ray and Steve

You are both the owners of Pallets-R-Us Pty Ltd and the company is jointly owned by both of you. The business intends to achieve financial aid to purchase the machinery which can bring about improvement in the operations of the business.

The report aims to provide insights regarding the risks which the business can face while purchasing the machinery and also considers the applicability of loan provision which can be made available to the business. The report also shows the available resources of the business and the various loan schemes which the business can use. The report also considers possible sources of loan which the business can apply from and the details for the same are explained below:

Pallets-R-Us Pty Ltd	Year 1	Year 2
Net profit after tax	$200,000	$220,000
Wages to partner 1 – years 1 and 2	$100,000	$100,000
Wages to partner 2 – years 1 and 2	$100,000	$100,000
Dividend to private investor	$45,000	$45,000

Loan options
Instalments loan	The business of Pallets-R-Us Pty Ltd can effectively selected instalment loans which will help them in proper servicing of loan facility. Th loan which is being taken for machinery can effectively be done with this option as the burden of interest will be based on instalment system. The tenure of such loans can range from 25 to 30 years.
Line of credit loans	This is another loan option which is available to Ray and Steve which is line of credit loans in which a certain line of credit is provided to the clients and interest is charged on such a part. The loan is generally provided for a period of 5 years and the interest rate on such loans are generally floating in nature.
Balloon loans	This type of loan allows the clients to bear the interest payments initially and later on when the loan period expires the principle amount can be paid. The interest rate in this sort of loan can be fixed or floating as per the preference of the bank.

Alternative Source of Equipment Financing
Lease	One alternative option which is available to the business is to take the machinery on a lease for a particular period and the person taking the asset on lease is charged interest. The lease agreement can be of short term as well as long term in nature depending on the requirement of the business.
Chattel Mortgage	It is a type of loan which is provided against a security arrangement against a movable property of the business. There is wide difference between traditional mortgage and Chattel Mortgage, as the legal relationship between the lessor and lessee is reversed in the case of the latter.
Commercial Hire Purchase	A commercial Hire Purchase agreement allows the businesses to hire an asset on a rental basis for which a fixed interest is to be paid. The hire purchase agreement allows the business to take the assets on a long term basis for meeting the processes of business.

Ray and Steve can apply for instalment system loans which will allow the business to effectively service the debt in instalments which will be including both interest and principle amounts. The loan will help the business to purchase the machinery and also manage the burden of the loan on Ray and Steve which will be spread over the months in an appropriate manner.

Loan Providers	Commercial loan
BOQ	· Interest rate 4.99% · No Application Fees · No Annual Fees · 5 to 15 years minimum term loan · $200,000 to $100,000,000 loan amount provided · LVR 65%
SUNCORP Bank	· Interest rate 4.29% · No Application Fees · No Annual Fees · 5 to 15 years minimum term loan · $10,000 to $1,000,000 loan amount provided · LVR 60%
ANZ	· Interest rate 7.02% · No Application Fees · No Annual Fees · 5 to 30 years minimum term loan · $10,000 to $100,000,000 loan amount provided · LVR 80%
Commercial Bank	· Interest rate 7.81% · No Application Fees · No Annual Fees · Maximum 15 years term loan provided · $25,000 to $100,000,000 loan amount provided · LVR 85%

The risks which can affect the business of Pallets-R-Us Pty Ltd relating to purchase of machinery are discussed below:

Types of Risk	Explanation
Inflation Risk	The risks which is faced by Pallets-R-Us Pty Ltd relating to inflation risks are nil as the interest rate is fixed in instalment loan option and therefore the management should be concerned with the same.
Liquidity Risks	There is a risk of liquidity in the business as the machinery would require significant amount of funds which will definitely affect the cash position of the business and affect the ability of the business to appropriately service the loan.
Specific Risk or systematic risk	There is no specific risk which can affect the business of Pallets-R-Us Pty Ltd as the risks are mainly associated with equity investors
Market Risk	The market risks refer to the changes which takes place in the market which can affect the revenue of the business which is a hinderance to the plan of the business.

The loan amount which is required by the business can be obtained effectively from ANZ bank as the loan can be taken for a longer period which reduces the risks of liquidity as the loan can be serviced on instalment basis effectively. Therefore, the best choice available for the business for taking the loan is from ANZ.

In order to take the loan, the owners of Pallets-R-Us Pty Ltd needs to provide certain guarantees and securities. The securities which can be offered can be specific charges on the assets of the business or even the owners can attach personal properties and even shares of the business as collateral securities for the loan. The partners Ray and Steve can also provide personal guarantee on behalf of the business for the loan which is taken by the business. The partners can also mortgage or pledge certain assets as collateral securities against loan of the business.

The management needs to provide a letter of credit to the company where the partners are importing the new machinery. The partners must use importer’s letter of credit for acquiring the machinery which the partners want to incorporate in the business. The letter of credit will be including approval from the bank of ANZ and also a guarantee which is provided by the bank in respect of the credit which is required to purchase the property. The letter of credit would be including signature of the banking authority and also specify the amount which the banking authority will be covering the amount which is offered by the business.

The maximum LVR of a Bank can help with the liquidity risks of the business.

Particulars	LVR	Year 1	Year 2
Purchase price		$800,000	Nil
Deposit		Nil	Nil
Cash contribution		Nil	Nil
ANZ EMI Payment	80%	497408	-
SUNCORP Bank EMI Payment t	60%	373056	-
BOQ EMI Payment	65%	404144	-
Commercial Bank EMI Payment	85%	528496	-

The important documents which will be required by the business for the purpose of taking the loan are as follows:

· Relevant Contract papers of the Machinery

· Proof of residence of business and also income statement for the same

· Documents for collaterals for the loan.

The business will be applying for the loan and the bank will take consideration for following:

· Analyse how much the business can borrow

· Calculate the cost of loan

· Investigate the machinery investment option for which the loan is being taken.

· Award pre-approval for the loan

The steps which can be taken are:

· Determine the interest rate for the loan

· Determine the time period for the loan

· The expiry period of the loan also needs to be determined.

Client Responsibilities

· You will be responsible for paying a portion of the principle loan amount along with interest amount.

· You are also responsible for informing the lender regarding changes in address, changes in payment schedule.

State Revenue Requirements

· Stamp duty

· Import taxes and also other taxes.

The following documents needs to be provided to the lender as a proof and assurance for the loan:

· The financial statement of the business including interim statements showing current performance for the year.

· A copy of the bank statement to show the cash position of the business which needs to how last 3 months

· The income tax returns of the business and any other lease agreements and any current loan document.

· Track record of the personnel and also financial information regarding the same is also to be provided.

· The registration certificate and also the license to operate in business are also demanded by the lenders.

In order to sanction the loan amount, the lender also needs a guarantor who can vouch for the owners Ray and Steve and in case of any default on their parts will be held responsible for the loan amount. The guarantor can be the spouses of the owners or any other individual.

The suggest list of lenders for the loan amount are:

Ø ANZ bank

Ø BOQ bank

Ø Suncorp bank.

I shall be remunerated by the owners in form of commission payable which will be disclosed after an appropriate option is selected. The commission will be payable after appropriate option is selected by the business.

Assessor feedback for Task 2a:	Resubmission required?
	No

Task 3a — Implement complex loan structures

Ray and Steve have accepted your recommendations and have given you authority to proceed with their application.

As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Your loan submission must include the following:

details of borrower, guarantors and all contact details
borrowers background
an overview of the proposal — what the finance is for
the proposed structure of the facility being recommended — product type, deposit amount (if required), loan amount, term, interest rate and residual value (if any)
full details of the security/collateral that is to be provided
serviceability calculations including Debt Service Cover Ratio (DSCR) calculations, including all personal borrowing facilities of the directors
provide a ‘funds-to-complete’ table including statutory costs and any relevant fees
highlight the relevant risks — industry, business, transactional — and how they are mitigated
any other information that is relevant to assist the lender provide an approval
your comments and recommendations
list attachments

(800 words)

Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.

You are to write a formal submission to the lender; not simply commenting on each of the points detailed above.

The use of tables in the report, to set out some of the numeric information, may be of benefit.

Student response to Task 3a

The important information which are available for the business are shown below in a table form showing the net profit for the current year in case of the borrower:

Pallets-R-Us Pty Ltd	Year 1	Year 2
Net profit after tax	$200,000	$220,000
Wages to partner 1 – years 1 and 2	$100,000	$100,000
Wages to partner 2 – years 1 and 2	$100,000	$100,000
Dividend to private investor	$45,000	$45,000

Borrowing Entity: Pallets-R-Us Pty Ltd

ABN & A.C.N:

Address: Unit 43, 25 High St Northville

Phone: 9001 2121

Fax: NA

Mobile: NA

Date of birth: NA

Loan Amount: $800,000

Purpose of the loan

The main intention behind taking the loan for the business is to finance the requirement of a machinery which will improve the efficiency of operations. The machine is to be imported from outside the country and so appropriate funding is necessary. The loan will help Ray and Steve to purchase the machinery and also provide some stability to the liquidity situation of the business.

Funding Position

The requirement of loan is for the purpose of purchasing the machinery for the business and also improving the liquidity situation of the business. The loan down payments are to be made in instalments and therefore the same does not affect the liquidity position of the business. In order to maintain the liquidity position, rate of interest, operating expenditure also play a vital role.

Security

The data which is provided by the business are checked by NCCP for viability purposes and also provide a basis for the lenders to assess whether they should provide loan facilities or not to the client based on the credit rating of the client. NCCP takes enquiry of loan amounts and also check track record for servicing of loan for Pallets-R-Us Pty Ltd.

Description of Machinery

The purchase price of the Machinery is estimated to be $ 800,000 for which the owners intend to take financial assistance from a lender. The machine is to be imported from a foreign country. This machine can be programmed to rapidly fabricate multiple components. The machine has an expected commercial lifespan of at least 15 years with operating software to be updated every three years. The machine is needed to be imported from the US. Initial enquiries with the US supplier have indicated that they will require a letter of credit for the import of the machine.

Repayment structure of the New Entity

The loan repayment structure focuses on different requirement of the loan which the business needs to fulfil. Some of the requirement which needs to be fulfilled are OSR requirement, ATO Consideration, State Legislations. These requirements are applicable to the business and therefore must be fulfilled

OSR requirements:

· The OSR helps in making distinction between the instruments which are used for the purpose of recognizing the duty payables which are there on agreement of loans.

· Furthermore, the OSR additionally helps in distinguishing the proceedings of the court and loan, which may be given to the moneylenders.

· It likewise helps in having agreements of loan and the same is also helpful in property valuation.

· The choices which are made relating to OSR helps in demonstrating the legitimacy of loan offerings to clients..

ATO Considerations:

· The ATO considerations viably give relative rules, which could be utilized by financial institutions to decide on sufficient advances of loans.

· It likewise incorporates relative standards, which may be considered while assessing the loan credibility of the lenders.

Particulars	LVR	Property 1
ANZ EMI Payment	80%	= 621760 * 80% = 497408 loan amount
SUNCORP Bank EMI Payment t	60%	= 621760* 60% = 373056 loan amount
BOQ EMI Payment	65%	= 621760* 65% = 404144 loan amount
Commercial Bank EMI Payment	85%	= 621760* 85% = 528496 loan amount

Serviceability Calculations:

The serviceability calculations consider the loan amount which is paid and in relation to the same the various fees which is incurred by the client business.

Sale Price: $800,000

Stamp Duty: $38800

Lodgement fee: $6500

Transaction fee: $10

Property Valuation review fees: 200

Total: $45,510

Recommendation

The business which is operated by Ray and Steve can utilize the loan option and take the same from ANZ bank on a instalment payment basis. This loan taken will help the management to purchase the machinery which will definitely improve the efficiency of the business and also the production capacity of the business which implies that the profitability of the business will also increase. It is recommended that the management should move forward with its plan and select instalment loan system.

Assessor feedback for Task 3a:	Resubmission required?
	No

Assessor feedback:

[insert feedback]
Date assessed:	Click here to enter a date
Does the student need to resubmit?	No
Questions that need to be resubmitted
First submission	Not yet demonstrated
Resubmission	Not applicable

To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or your resubmission.

Section 2: Case Study B — Bill Smith and John Jones – Commercial Premises Finance

Background

You are meeting with prospective clients, Bill Smith and John Jones. They have been referred to you by their accounting firm, Buckland Accountants.

The prospective clients need assistance with the acquisition of owner-occupied premises to replace their current business premises, which they rent and is becoming too small for their growing business.

True Blue Pty Ltd trades as True Blue Real Estate and was purchased as an existing real estate business three years ago. Bill Smith and John Jones are the directors.

The shareholders of True Blue Pty Ltd are Bill Smith, John Jones and a private investor, Amanda Williams, who does not work in the business and has no involvement in its day-to-day operation. Each holds an equal one-third share in the company.

Bill and John have each been in real estate for approximately 15 years, focusing on residential sales and leasing. They have gained their work experience in the local area. A wealth of knowledge of the area, coupled with an ever-expanding client base, has resulted in sustained and solid growth for the business.

Details of the property

Sale price of the property is $950,000. (There is no GST requirement as it is being purchased as a going concern.)

A deposit of $95,000 has been paid and is being held in the trust account of the settlement agent/solicitor.

A cash contribution of $233,240 will be made from the general working account of the business.

Property purchase and loan to be in the name of a new entity — True Blue Pty Ltd as trustees for the Smith Jones Unit Trust. There are a total of 99 units in the trust and the unit holdings mirror the shareholding of the trading entity, True Blue Pty Ltd.

The property is situated at 100 Smith St, Yourtown, with contracts exchanged at today’s date and an anticipated settlement date of 90 days.

General observations about the property

The property is in good condition and is well located in the same street as the current rental premises.
It is anticipated that the premises will meet the needs of the business for the next 10 years.

Summary of initial client fact find

Bill and John have provided the last two years financial accounts for the trading business, as well as interim accounts for 10 months of the current financial yea

True Blue Real Estate’s financial accounts

	Year 1	Year 2
Net profit after tax	$92,000	$140,060
Current year projected - $175,000
Add back (rent)	$47,000	$49,142
Additional superannuation to director	$31,400	$34,539
Wages to partner one	$70,640	$70,640
Wages to partner two	$70,640	$70,640
Payment to private investor (fixed flat profit fee)	$45,000	$45,000

Applicant information — Bill Smith

Personal details
Address	26 Nowry Road, Yourtown, 1234
Date of birth	17 February 1958
Phone	7890 1234
Financial details
Gross income	$70,640
Owner-occupied property valued at	$550,000
Outstanding debt on owner-occupied property	$210,000 repayable at $1,379 per month P & I, 6.2% p.a. interest rate
Credit card with limit $15,000	Outstanding debt — $5,000
Superannuation	$250,000
Motor vehicle valued at	$30,000 (nil debt)

Applicant information — John Jones

Personal details
Address	14 Mary Street, Yourtown, 1234
Date of birth	14 October 1970
Phone	0146 234 577
Financial details
Gross income	$70,640
Owner-occupied property valued at	$750,000
Outstanding debt on owner-occupied property	$300,000 repayable $2,159 per month P & I, 6.2% p.a. interest rate
Credit card with limit $5,000	Outstanding debt — $1,000 cleared monthly
Superannuation	$200,000
Motor vehicle valued at	$45,000
Outstanding debt on motor vehicle	$15,000 repayable $623 per month, fixed interest rate
Business details
Cash in business account	$400,000

Other information

Applicants’ solicitor	Moffat and Co (contact is Maree Moffat) 16 Tatlor Street, Yourtown, 1234
Phone	7890 5678
Applicants’ accountant and registered office	Buckland Accountants (contact is Simon Williams) 28 Mary Street, Yourtown, 1234
Phone	2982 0987
Applicants’ banker	Westcoal Building Society, Yourtown, 1234

Notes:

Assume for credit card debts, the minimum monthly commitment should be calculated at 3% of the credit limit.
Each of the working directors has appropriate death, income and disability insurance in place.
A sensitisation factor of 2% should be used when calculating financial commitments.

Task 1b — Identify the clients’ complex broking needs

Prepare a list of questions that you would need to ask Bill and John about their history, experience, business performance and the property purchase.

In preparing your list of questions you should ensure that you cover the following:

the complex features of Company and Trust structure and benefits that will come to the Company from purchase of this property
the identification of potential risks in such a transaction and Bill’s and John’s tolerance of risk
the financial aspects of the transaction and current financial position of the business.

In addition to the list of questions, please also comment on any potential risks you identify (you are permitted to make assumptions here). In considering these risks you should consider:

– how you would identify the risks and the criteria you used to evaluate these risks

– how you would assess their current debt exposure; the tools you would use in terms of risk probability, impact and consequences.

(800 words)

Student response to Task 1b

Task 2b — Prepare complex broking options

You are required to prepare a full report for Bill and John by outlining the process and the risks (potential and real) of which Bill and John should be aware.

In a suitable format, outline to the directors the options available to them and the process that will need to take place for them to complete the new property purchase and establish the loan.

In developing your report you should cover the following:

the parties to the loan
what is the best loan structure for this transaction — provide Bill and John with options to use their own residential properties as cross security or use a cash contribution and use the property to be purchased as the property
your recommendation of the best option, including amount, security/collateral, term, repayments and potential interest rate
name three (3) lenders that would consider and potentially approve this transaction, and advise the client of the product type, loan term, interest rate, ongoing fees, balloon payment (if applicable) and monthly repayment they offer
the procedure to commence the loan, including documentation Bill and John need to provide
the client responsibilities, so Bill and John fully understand the facility being proposed
outline the risks (potential and real) of which Bill and John should be made aware
the name in which the client will sign the contract to purchase and, given Trust involvement, in what name will it be registered (this varies state to state so please advise which state you are from)
a summary of fees and charges — including those for setup and those of the lender
a request for client to inform you of any questions about the transaction and/or provide an instruction for you to proceed
advise which relevant disclosures need to be made

(800 words)

Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.

You are to write a report to clients demonstrating your professional writing skill, not simply commenting on each of the points detailed above.

The use of tables in the report, to set out some of the numeric information, may be of benefit.

Student response to Task 2b

Task 3b — Implement complex loan structures

Bill and John have accepted your recommendations and have given you authority to proceed with their application.

As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Your loan submission must include the following:

details of borrower, guarantors and their contact details
borrowers’ backgrounds
an overview of the proposal — what the finance is for:

– the proposed structure of the facility being recommended — product type, deposit amount (if required), loan amount, term, interest rate and residual value (if any)

– full details of the security/collateral that is to be provided

– Sensitised serviceability calculations including Debt Service Cover Ratio (DSCR) calculation and all personal borrowing facilities of directors (sensitisation rate is disclosed in case background)

– provide a funds- to-complete table, including statutory costs and any relevant fees

– highlight the relevant risks, industry, business, transactional and how they are mitigated

– any other information that is relevant to assist the lender provide an approval

– your comments and recommendations

– list attachments.

(800 words)

Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.

You are to write a formal submission to the lender, not simply commenting on each of the points detailed above.

The use of tables in the report, to set out some of the numeric information, may be of benefit.

Student response to Task 3b

Assessor feedback:

[insert feedback]
Date assessed:	Click here to enter a date
Does the student need to resubmit?	No
Questions that need to be resubmitted
First submission	Not yet demonstrated
Resubmission	Not applicable

To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or your resubmission.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2021). Complex Lending And Broking For Pallets-R-Us Pty Ltd. Retrieved from https://myassignmenthelp.com/free-samples/dipmb2-complex-lending-and-broking/contractor.html.

"Complex Lending And Broking For Pallets-R-Us Pty Ltd." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/dipmb2-complex-lending-and-broking/contractor.html.

My Assignment Help (2021) Complex Lending And Broking For Pallets-R-Us Pty Ltd [Online]. Available from: https://myassignmenthelp.com/free-samples/dipmb2-complex-lending-and-broking/contractor.html
[Accessed 26 December 2024].

My Assignment Help. 'Complex Lending And Broking For Pallets-R-Us Pty Ltd' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/dipmb2-complex-lending-and-broking/contractor.html> accessed 26 December 2024.

My Assignment Help. Complex Lending And Broking For Pallets-R-Us Pty Ltd [Internet]. My Assignment Help. 2021 [cited 26 December 2024]. Available from: https://myassignmenthelp.com/free-samples/dipmb2-complex-lending-and-broking/contractor.html.

Get instant help from 5000+ experts for