Commercial Edge Week Three 2020 Housekeeping 01 Please stay - - PowerPoint PPT Presentation

Commercial Edge Week Three

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2020

Please stay until the end to have your attendance marked

Housekeeping

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01 02 Keep your video on 03 04

Unmute if you’d like to ask a question There will be quizzes and polls during the session

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2020

Commercial property lending Servicing calculations

Week two recap

01 02

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01 02

Equipment Finance

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Agenda

Provide you with an overview of our offering and how to deal with us. Agenda;

• Introduction of your Westpac sales support team
• Accreditation process
• Benefits of Asset Finance to Client and Broker
• The Start to Finnish process
• Westpac’s online portal called DriveOnline

Please note the AFG Business Support contact details are 1800 063 210 (option 3)

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What is Equipment Finance?

• This type of funding allows businesses to finance the purchase of plant, equipment & vehicles

to suit cash flow, without tying up working capital with Potential tax benefits.

• The amount financed shouldn’t exceed the value of the asset.
• The length of the loan, should be in line with how long the customer will be keeping the asset.
• The term shouldn’t exceed the economic life of the asset as per ATO guidelines.

**Customer should seek advice from accountant as to what product would be best suited for them before proceeding**

Westpac offers a range of Equipment finance options to suit your clients needs;

• Commercial Loans/Goods Loan/Chattel Mortgage (most common facility for SME lending)
• Finance Lease
• Hire Purchase

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Why think Asset & Equipment Finance….

Equipment Finance is ideal for your customers wanting to acquire cars & light commercial vehicles predominantly for business use without tying up working capital (eg: cash &/or OD)

• 100% funding available (No deposit)
• Solely secured by asset being purchased not tying up

business/personal assets

• Potential tax benefits
• Balloon options available (assists cashflow)
• Interest Rates & repayments are fixed customer can

budget with certainty

Why Customers

for your

• Additional income streams, paid at settlement
• Competitive product and service offering
• Providing diversification
• Building & strengthening relationships with

clients

• Assists with client retention
• Simple online application process
• Way to keep in contact with your client
• Future financial needs

Why

You

for

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Product Finance Lease Hire Purchase Commercial Loan

Aka Chattel Mortgage/Goods Loan

Minimum Loan Amount $15,000 $15,000 $15,000 Term 1-7 years 1-7 years 1-7 years Residual/Balloon Must have residual Residual or fully amortising Residual or fully amortising Ownership of asset Westpac Westpac passes ownership to customer at end of term Customer Depreciation Westpac owns asset and claims depreciation Customer Customer Tax Deductibility Lease rental deductible if asset used for income producing purposes Interest on payments and depreciation if asset used for income producing purposes Interest on payments and depreciation if asset used for income producing purposes GST The customer pays GST on each rental instalment and the residual payment The customer pays upfront

• n amount financed as well

as the interest costs. GST can be financed. N/A

Product Types for Asset/ Equipment Finance…..

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The How

• Let your customers and referral sources know you can assist with next purchase

Provide a quote leave it with them to ponder over

• LinkedIn & Facebook post’s regarding a happy customer with a pic of the asset and a two sentence

blurb

• Email signature informing what services you provide
• Suggest organising Pre-Approvals
• Talk repayments not interest rates to compare “Apples with Apples”
• Know the tricks - Dealer deals rates and fees
• Understand total cost

“Repayments x term + Balloon – Amount financed” Interest payable

• Clues are in the financial Statements
• Profit and Loss
• Repairs and Maintenance
• Balance Sheet
• Depreciation Schedules

DriveXpress

AFGB Brokers get access to Westpac’s market leading online Asset Finance platform called DriveOnline allowing the accredited broker the ability to lodge applications & produce documentation for transactions.

• A competitive fixed rate offering
• Commercial Loan (Chattel Mortgage)
• Term 1 – 5 Years
• Balloon Nil - Max may be rounded up to the nearest 5%
• Minimum Loan $20k
• Monthly Instalments (Advance or Arrears)

Quote Example; Motor Vehicle PP $60K, CLA, 60 months with a 30% Balloon ($18k) Lender rate 3.95% + Brokerage $1,200 + GST (amount is built into the customers repayments over the term of the loan) Customer rate 4.60% = Repayments $850.73

Updating Cars and Equipment for business use? Asset from a Licensed Dealer and up to 4 years old Private sale purchases are permitted for light commercial vehicles <4.5T & Cars only <$150K (not taxi/hire cars) Pre COVID – was applicable for New to bank customers the amount financed ≤ $150K per transaction (to a maximum of $250K per connection/group) not applicable till further notice Due to Covid only applicable for Existing Business lending customers to the Westpac Group - the amount financed up to ≤ $250K per transaction [excluding cars, cars limited to $150K] (to a maximum of $500K per connection/group)

If this criteria applies to your client, then DriveXpress can help give you a quick answer on the following assets (age up to 4yrs):

• Cars
• Light commercial vehicles (under 4.5T

GVM) Other Assets

• Trailers
• Forklifts, Boom/Scissor Lifts & Tele-

Handlers

• Dump Trucks / Excavators / Graders

/Scrapers / Dozers

• Backhoes, Front-End loaders & Bobcats
• Tractors / Headers / Harvesters (age up

to 7yrs)

• Cotton Picker / Plough / Seeder /

Spreader / Sprayer (age up to 7yrs)

DriveXpress

Acronym buster: An existing business customer is a borrower: within the WBC Group must have business lending exposure via either or a Business/Term Loan(s), Business Overdrafts, GX, Commercial Bill, Trade Finance or Equipment Finance facility; going ≥ 12 months; or, Who has had existing business lending exposure which has been fully repaid from cash flow within the past 6 months (this does not include clearance of facilities from assets sales)

DriveXpress

Eligibility Criteria:

• >2 years in business with ABN Registered for GST
• No negative equity on trade-in’s
• Credit check is to be satisfactory to WBC
• lf applicable, accounts up to date within the WBC Group
• If the borrower is an incorporated entity, all directors to guarantee the

loan.

• Own Residential Property
• Balloon (is equal or below) to ATO guidelines

Lodgement:

• No financials required if eligibility criteria

met

• Easy application via DriveOnline written

consent or Electronic function within DriveOnine When Approved:

• Client to sign loan documents including

Affordability Statement

• Rates notice to confirm property
• wnership
• Comprehensive insurance noting WBC as

an interested party

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Questions to cover off with the customer

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How does the process work?

Broker identifies

• pportunity and

determines customers needs

(WBC is commercial lending only)

Broker to quote via AFGB platform, you choose lender and provide direct to customer If W.E.F.

• Create App in

AFGB

• Finalise it in Drive.
• Validate and submit

with signed Privacy Form or Electronic Privacy * Westpac receives application and begins to process Service standard time Credit

• DriveXpress – 1 day
• Formal Decision is

emailed to Broker

• Broker relays outcome

to client Customer collects asset from supplier

• Westpac settles deal

pays supplier and brokerage Service standard time Settlement

• DriveXpress: 1 day
• Confirmation email

sent to broker

• Broker obtains Tax Invoice

from supplier

• Broker to email tax invoice to

client to requesting insurance

• Broker emails tax invoice to

supplier verification team

SupplierVerification@westpac.com.au

• Broker generates

documentation via DriveOnline

• Organise customer to sign Dox

Broker Emails - Executed documents, completed checklist, copy of approval, quote, insurance, Direct Debit details, AML if applicable, Supplier and Brokerage Tax invoice/fee refund generated via AFGB platform to

drivexpress_settlements@westpac.com.au

* Linkage to VEDA to conduct credit check

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Supplier Tax Invoice request Brokerage Tax Invoice example Quoting RV & Balloon ATO Guidelines

Add .5 to above to get max RV/Balloon Broker to generate via AFG Business platform Provide at settlement Broker to arrange You can utilise the Pro-forma in the AFGB Platform Provide at Settlement

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Base Rates

• The brokerage is payed at settlement to AFG, on production of a Tax Invoice made to WBC to include

“Fee Refund”

WBC Fees (but not limited to) NO ORIGINATION FEE’s applicable

• $450 Establishment Fee inc PPSR
• $350 inc GST for all Express settled deals
• $650 for Private Sale transactions (refer to BDM for private sale conditions)

Broker Remuneration

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Brokerage = Income

The brokerage and Fee refund is payable at Settlement on production of Tax Invoice produced via the AFGB platform which accompanies the settlement pack For example;

• Average deal size $60,000 loan amount
• If you settled a ONE deal a month
• 2% brokerage $1,200 per deal x 12 = $14,400
• Doc fee refund at $350 inc GST x 12 = $4,200
• Additional income $18,600

18 § Broker must be accredited to write Westpac Equipment Finance (WEF) § WBC Equipment Finance NOT eligible for Consumer purposes § Application to be generated in the AFGB platform § Submit application online via Westpac DriveOnline platform § Privacy Consent at submission stage 2 options; Electronically via SMS/email process in Driveonline or use AFC Generic privacy from Driveonline; borrower/guarantors to manually sign and be uploaded when lodging application * § AFG Business Support 1800 063 210 (option 3) § Client or Broker - No digital signatures for any of our documentation only manual pen to paper § Introducing broker needs to; Ø Manually sign the AML form for each entity noted on the approval advice and provide it in the settlement email with applicable supporting documents. Ø Meet all parties to the loan have sighted and provide copies of original ID documents Call your Call your BDM/RE to discuss alternate AML procedures if your scenario differs.

Other points to note

* Linkage to VEDA to conduct credit check

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AFG Business credentials in edit profile screen

Input your Westpac Driveonline Username & password Need help call AFG Business Support 1800 063 210 (option 3)

Please note - If you change your Driveonline password updated your profile

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AFG Business Submit to Lender

• Once submit to Lender - DriveOnline platform will open and populate the data from AFGB platform.
• Driveonline needs user to validate app, cover off privacy act upload and submit to Westpac for

assessment

Introducing DriveOnline

Captures the information required to submit a deal, delivered in a consistent format. Available 24x7 via the Internet Tablet enabled Manage all Asset classes Convenient, smart and easier to do business with us

Strategic Direction Simplification DriveOnline

A lodgement platform that enables brokers to complete applications, print documents for equipment finance deals – in one place

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DriveOnline Application

• 2. Read and

answer checklist

• 1. Deal type
• Please note; DriveOnline will give an indicative decision but a formal approval or decline will be emailed to you from Westpac

New to business bank not applicable

Contact us Next week 01

Asset Finance recap

02

Working Capital with Get Capital

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Submitting a deal via AFG Business

Richele Janjatovic

Dawood Odeh

Commercial BDM

VIC & TAS

Commercial BDM

NSW, ACT & QLD

Richele.Janjatovic@afgonline.com.au Dawood.Odeh@afgonline.com.au