Written Assignment
\nComplex Lending and Broking
\n(DIPMB2_AS_v3)
\nStudent identification (student to complete)
\nPlease complete the fields shaded grey.
\nStudent number 10594732
\nWritten Assignment result (assessor to complete)
\nResult \u2014 first submission Not yet demonstrated
\nParts that must be resubmitted
\nResult \u2014 resubmission (if applicable) Not applicable
\nResult summary (assessor to complete)
\nFirst submission Resubmission (if required) Resubmission (if required)
\nTask 1 Demonstrated
\nDemonstrated
\nNot applicable
\nTask 2 Demonstrated
\nDemonstrated
\nNot applicable
\nTask 3 Demonstrated
\nDemonstrated
\nNot applicable
\nTask 4 Demonstrated
\nDemonstrated
\nNot applicable
\nTask 5 Demonstrated
\nDemonstrated
\nNot applicable
\nFeedback (assessor to complete)
\n[insert assessor feedback]
\nBefore you begin
\nRead everything in this document before you start your written assignment for the Complex Lending and Broking (DIPMB2_AS_v3) subject.
\nAbout this document
\nThis document is the written assignment and includes the following:
\n\u2022 Instructions for completing and submitting this written assignment
\n\u2022 Section 1: Case Study A \u2013 Ray Murdoch and Steve Brown \u2013 Commercial Equipment Finance
\n\u2013 Task 1a \u2013 Identify the clients\u2019 complex broking needs
\n\u2013 Task 2a \u2013 Develop complex broking options
\n\u2013 Task 3a \u2013 Implement complex loan structures
\n\u2013 Task 4a- Detailing analysis findings
\n\u2022 Section 2: Case Study B \u2013 Bill Smith and John Jones \u2013 Commercial Premises Finance
\n\u2013 Task 1b \u2013 Identify the clients\u2019 complex broking needs
\n\u2013 Task 2b \u2013 Prepare complex broking options
\n\u2013 Task 3b \u2013 Implement complex loan structures
\n\u2013 Task 4b \u2013 Detailing analysis findings
\n\u2022 Section 3: Improving practice performance
\n\u2013 Task 5 \u2013 Develop, research and monitor plans to improve performance
\nHow to use the study plan
\nWe recommend that you use the study plan for this subject to help you manage your time to complete the written assignment within your enrolment period. Your study plan is in the KapLearn Complex Lending and Broking (DIPMB2v3) subject room.
\nInstructions for completing and submitting this written assignment
\nSaving your work
\nDownload this document to your desktop, type your answers in the spaces provided and save your work regularly.
\n\u2022 Use the template provided, as other formats will not be accepted for this written assignment.
\n\u2022 Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
\n(e.g. 12345678_DIPMB2_AS_v3_Submission1).
\n\u2022 Include your student ID on the first page of the written assignment.
\nBefore you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.
\nThe written assignment
\nThe information and data you need to complete this written assignment is presented in the case studies at the beginning of each task.
\nThis written assignment covers complex lending and broking and requires you to answer the questions for Section one (1) or Section two (2) and Section 3. Each case study focuses on a different lending scenario.<\/p>\n
Word count
\nThe word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.
\nAdditional research
\nWhen completing this assignment, assumptions are permitted although they must not be in conflict with the information provided in the Case Studies.
\nYou 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\u2019s requirements, or to calculate any service fees that may be applicable.
\nSubmitting the written assignment
\nOnly Microsoft Office compatible written assignments submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to save and submit this entire document.
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\nThe written assignment marking process
\nYou have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
\nIf you reach the end of your initial enrolment period and have been deemed Not Yet Competent in one or more assessment items, then an additional 4 weeks will be granted, provided you attempted all assessment tasks during the initial enrolment period.
\nYour assessor will mark your written assignment and return it to you in the Complex Lending and Broking
\n(DIPMB2v3) subject room in KapLearn under the \u2018Assessment\u2019 tab.
\nMake a reasonable attempt
\nYou must demonstrate that you have made a reasonable attempt to answer all of the questions in your written assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.
\nIf you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed written assignment.
\nHow your written assignment is graded
\nAssignment tasks are used to determine your \u2018competence\u2019 in demonstrating the required knowledge and\/or skills for each subject. As a result, you will be graded as either competent or not yet competent.
\nYour assessor will follow the below process when marking your written assignment:
\n\u2022 Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
\n\u2022 Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.
\nYou must be deemed competent in all assessment items in order to be awarded your qualification, including demonstrating competency in:
\n\u2022 all of the exam questions
\n\u2022 the written assignment.
\n\u2018Not yet demonstrated\u2019 and resubmissions
\nShould sections of your assignment be marked as \u2018Not yet demonstrated\u2019 you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.
\nYou must address the assessor\u2019s feedback in your amended responses. You only need amend those sections where the assessor has determined you are \u2018Not yet demonstrated\u2019.
\nMake changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor\u2019s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.
\nUnits of competency
\nThis written assignment is your opportunity to demonstrate your competency against these units:
\nUnit code Unit name DIPMB2 Complex Lending and Broking DIPMB3 Business Management Skills
\nFNSFMB502
\nIdentify and develop broking options for clients with complex needs
\nStarted Completed
\nFNSFMB503
\nPresent broking options to clients with complex needs
\nStarted Completed
\nFNSFMB504
\nImplement complex loan structures
\nStarted Completed
\nFNSCUS501
\nDevelop and nurture relationships with clients, other professionals and third party referrers
\nStarted Completed
\nFNSPRM602
\nImprove the practice
\nStarted Completed
\nNote that the written assignment is required to meet the requirements of the units of competency.
\nWe are here to help
\nIf you have any questions about this written assignment you can post your Question Assignment at the \u2018Ask your Tutor\u2019 forum in your subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.
\nSection 1: Case study A \u2014 Ray Murdoch and Steve Brown \u2013 Commercial Equipment Finance
\nNote: You only need to complete Section 1 or Section 2 tasks 1-4 in this assignment, plus Section 3 task 5.
\nBackground
\nYou have just met with Ray Murdoch and Steve Brown, referred to you by another commercial client.
\nRay 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.
\nIt is critical that Ray and Steve\u2019s product meets market needs. They need to maintain sustainable production and operating costs if they are to forecast their sales and cost of sales.
\nThey have a well-established client database that provides them with repeat \u2018business-to-business\u2019 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.
\nRay and Steve now require finance to Help them with the purchase of a sophisticated machine that uses 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 will have 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. Once the machine has arrived and installed on the premises the letter of credit will be replaced with an asset lease. The asset lease requested by the borrowers will be for a seven-year term with a residual of 15%.
\nTheir 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\u20136 months to meet sales\/production demands.
\nRay 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 divorced and has no dependants. Steve is married and his wife is a school teacher and she will be retiring at the end of the year.
\nSteve worked with Ray at \u2018Protech\u2019 as a foreman. His skills are in production and managing project ( help with nursing paper writing from experts with MSN & DNP degrees)\/job flow. He has high level technical skills and can complete works to specification at a high standard.
\nSteve 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\u2019s 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.
\nApplicant information
\nClient Ray Murdoch Steve Brown
\nCurrent address: Unit 43, 25 High St Northville, Your State and has lived there for six years 23 Desmond Lane Northville, Your State and has lived there with Kate for seven years. They own property jointly.
\nHome phone: 9001 2121 9002 1212
\nStatus Ray is divorced with no dependent age children Steve is married with no dependents
\nEmployment Self-employed business owner Self-employed business owner
\nIncome $100,000 per annum $100,000
\nProperty value $750,000 $900,000
\nCash at bank $12,500 $9,600
\nContents $100,000 $85,000
\nSuperannuation $250,000 Steve $350,000, Kate $60,000
\nMotor vehicle $40,000 $55,000
\nHome loan $250,000 repayments $2,068p.m., P & I, 18 years remaining $350,000 repayments $2,645 p.m., P & I, 22 years remaining
\nCredit card $25,000 limit with debt of $15,000, monthly payment calculated @3% of limit $10,000 limit with debt of $3,000, monthly payment calculated @3% of limit
\nCar loan $0 $15,000 repayment $746p.m., remaining term 4 years
\nThe business
\nYear 1 net profit after tax $200,000
\nYear 2 net profit after tax $220,000
\nCurrent year interim profit (10 months trading) $200,000
\nWages to partner 1 \u2013 years 1 and 2 $100,000
\nWages to partner 2 \u2013 years 1 and 2 $100,000
\nPrincipal repayment to Ray\u2019s brother repaid annually $30,000
\nABN: 64-123-123-123
\nBusiness name: Pallets-R-Us Pty Ltd
\nKey balance sheet items
\nCash $25,000
\nTrade Debtors $220,000
\nTrade Creditors $100,000
\nNotes The business currently meets all creditor payments at 30-day terms.
\nDebtor collection has been solid. They invoice an upfront payment of 50% of the sale price, which Helps in funding their production.
\nThey have orders of $1m over the next 3 months and have made an increase in their gross profit margin.
\nThe orders are from several clients, so their debtors will be well spread.
\nOutstanding balance on loan from brother $440,000.
\nTask 1a \u2014 Identify the clients\u2019 complex broking needs
\nPrepare a list of questions that you would need to ask Ray and Steve about their history, experience, business performance and the intended equipment purchase.
\nIn preparing your list of questions you should ensure that you cover the following:
\n\u2022 the complex features in importing and purchasing this equipment and benefits that will come to the Company from such purchase
\n\u2022 the identification of potential risks in such a transaction and Ray\u2019s and Steve\u2019s tolerance of risk
\n\u2022 the financial aspects of the transaction and current financial position of the business.
\n(800 words)
\nStudent response to Task 1a
\nAnswer here
\nAssessor feedback for Task 1a \u2014 Identify the clients\u2019 complex broking needs
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 2a \u2014 Develop complex broking options
\nYou 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.
\nIn a suitable report format you should cover the following:
\n1. the parties to the loan
\n2. 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
\n3. the product options that are available to finance an equipment purchase once it has arrived in Australia
\n4. your recommendation of best product option, including amount, security\/collateral, term, potential interest rate and residual value (if any)
\n5. 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
\n6. the procedure to commence the import of the equipment and the loan, including documentation Ray and Steve need to provide
\n7. the client responsibilities, so Steve and Ray fully understand the facility being proposed
\n8. outline the risks (potential and real) of which Ray and Steve should be made aware
\n9. whether personal guarantee will be required from the Director\u2019s spouse
\n10. a summary of all fees and charges \u2014 including those for setup and those of the lender
\n11. advise which relevant disclosures need to be made
\n12. a request for client to inform you of any questions about the transaction and\/or provide an instruction to proceed.
\n(800 words)
\nNotes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
\nYou are to write a report to your clients, demonstrating your professional writing skill \u2014 not simply commenting on each of the points detailed above.
\nThe use of tables in the report to set out some of the numeric information may be of benefit.
\nStudent response to Task 2a
\nAnswer here
\nAssessor feedback for Task 2a \u2014 Develop complex broking options
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 3a \u2014 Implement complex loan structures
\nRay and Steve have accepted your recommendations and have given you authority to proceed with their application.
\nAs part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Note: Lenders have different credit policies and submission requirements do vary from lender to lender.
\nYour loan submission must include the following:
\n\u2022 details of borrower, guarantors and all contact details
\n\u2022 borrowers background
\n\u2022 an overview of the proposal \u2014 what the finance is for
\n\u2022 the proposed structure of the facility being recommended \u2014 product type, deposit amount (if required), loan amount, term, interest rate and residual value (if any)
\n\u2022 full details of the security\/collateral that is to be provided
\n\u2022 serviceability calculations including Debt Service Cover Ratio (DSCR) calculations, including all personal borrowing facilities of the directors
\n\u2022 provide a \u2018funds-to-complete\u2019 table including statutory costs and any relevant fees
\n\u2022 highlight the relevant risks \u2014 industry, business, transactional \u2014 and how they are mitigated
\n\u2022 any other information that is relevant to Help the lender provide an approval
\n\u2022 your comments and recommendations
\n\u2022 list attachments
\n(800 words)
\nNotes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
\nYou are to write a formal submission to the lender; not simply commenting on each of the points detailed above.
\nThe use of tables in the report, to set out some of the numeric information, may be of benefit.
\nStudent response to Task 3a
\nAnswer here
\nAssessor feedback for Task 3a \u2014 Implement complex loan structures:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 4a \u2014 Detailing analysis findings
\nThis task will require you to assume the role of a credit assessor who is making a recommendation to their supervisor for approval of the loan application being assessed.
\nThis will require you to provide a detailed analysis of your research into the applicant and their industry (based on case study background), your findings and risk analysis for the lender.
\nVerification of the applicant\u2019s information and supporting documents includes testing and checking the integrity of information supplied.
\n1. Using the the information in the case study, check the legal entity of the business and identify which Australian Business Number (ABN) is correct:
\n(a) 64-123-241-193
\n(b) 64-123-123-123
\n(c) 64-123-123-163
\nStudent response to Task 4a: Question 1
\nAnswer here
\n2. Identify two legislative requirements that should be reviewed to test and check compliance with identification processes for commercial borrowers.
\nStudent response to Task 4a: Question 2
\nAnswer here
\n3. What sources could you rely on to verify the financial data supplied by the client?
\nNote: As this is a case study only, you will need to explain where you would source the information, what processes you use and what documents would verify the financial data.
\nStudent response to Task 4a: Question 3
\nAnswer here
\nAfter reviewing the background information and business details of the applicant, complete the following questions.
\n4. Provide a summary of the impact that the new leasing costs will have on the applicant\u2019s net profit, assuming an anticipated 50% increase in the net profit based on the Year 2 of trading results.
\nStudent response to Task 4a: Question 4
\nAnswer here
\n5. Provide a costing of the lease as described in the background information. The interest rate for the lease will be 6%.
\nStudent response to Task 4a: Question 5
\nAnswer here
\n6. Detail the security instrument to be used for this transaction and what impact this may have on the business.
\nStudent response to Task 4a: Question 6
\nAnswer here
\n7. Outline any legal or other complex requirements identified.
\nStudent response to Task 4a: Question 7
\nAnswer here
\n(Task 4b questions 1-7, 500 words)
\nNotes: To complete this task you will need to refer to the Toolbox in the sections Pallets-R-Us Pty Ltd and \u2018Lending organisation\u2019s guidelines, policies and procedures, Legislative requirements, Loan verification and loan standards\u2019 found in the Toolbox. You may also need to conduct your own independent research to answer these questions.
\nAssessor feedback for Task 4a \u2014 Detailing Analysis Findings:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nSection 2: Case Study B \u2014 Bill Smith and John Jones \u2013 Commercial Premises Finance
\nNote: You only need to complete Section 1 or Section 2 tasks 1-4 in this assignment, plus Section 3 task 5.
\nBackground
\nYou are meeting with prospective clients, Bill Smith and John Jones. They have been referred to you by their accounting firm, Buckland Accountants.
\nThe prospective clients need Helpance 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.
\nTrue 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.
\nThe 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.
\nBill 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.
\nDetails of the property
\nSale price of the property is $950,000. (There is no GST requirement as it is being purchased as a going concern.)
\nA deposit of $95,000 has been paid and is being held in the trust account of the settlement agent\/solicitor.
\nA cash contribution of $233,240 will be made from the general working account of the business.
\nProperty purchase and loan to be in the name of a new entity \u2014 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.
\nThe property is situated at 100 Smith St, Yourtown, with contracts exchanged at today\u2019s date and an anticipated settlement date of 90 days.
\nGeneral observations about the property
\nThe property is in good condition and is well located in the same street as the current rental premises.
\nIt is anticipated that the premises will meet the needs of the business for the next 10 years.
\nSummary of initial client fact find
\nBill 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 year.
\nTrue Blue Real Estate\u2019s financial accounts
\nYear 1 (previous) Year 2 (current)
\nNet profit after tax $92,000 $140,060
\nCurrent year project ( help with nursing paper writing from experts with MSN & DNP degrees)ed – $175,000
\nAdd back (rent) $47,000 $49,142
\nAdditional superannuation to director $31,400 $34,539
\nWages to partner one $70,640 $70,640
\nWages to partner two $70,640 $70,640
\nPayment to private investor (fixed flat profit fee) $45,000 $45,000
\nApplicant information \u2014 Bill Smith
\nPersonal details
\nAddress 26 Nowry Road, Yourtown, 1234
\nDate of birth 17 February 1958
\nPhone 7890 1234
\nFinancial details
\nGross income $70,640
\nOwner-occupied property valued at $550,000
\nOutstanding debt on owner-occupied property $210,000 repayable at $1,379 per month P & I, 6.2% p.a. interest rate
\nCredit card with limit $15,000 Outstanding debt \u2014 $5,000
\nSuperannuation $250,000
\nMotor vehicle valued at $30,000 (nil debt)
\nApplicant information \u2014 John Jones
\nPersonal details
\nAddress 14 Mary Street, Yourtown, 1234
\nDate of birth 14 October 1970
\nPhone 0146 234 577
\nFinancial details
\nGross income $70,640
\nOwner-occupied property valued at $750,000
\nOutstanding debt on owner-occupied property $300,000 repayable $2,159 per month P & I, 6.2% p.a. interest rate
\nCredit card with limit $5,000 Outstanding debt \u2014 $1,000 cleared monthly
\nSuperannuation $200,000
\nMotor vehicle valued at $45,000
\nOutstanding debt on motor vehicle $15,000 repayable $623 per month, fixed interest rate
\nAdditional Business details
\nCash in business account $400,000
\nABN 64 123 123 123
\nBusiness Name True Blue Pty Ltd trading as True Blue Real Estate
\nTrust Smith Jones Unit Trust
\nOther information
\nApplicants\u2019 solicitor Moffat and Co (contact is Maree Moffat)
\n16 Tatlor Street, Yourtown, 1234
\nPhone 7890 5678
\nApplicants\u2019 accountant and registered office Buckland Accountants (contact is Simon Williams)
\n28 Mary Street, Yourtown, 1234
\nPhone 2982 0987
\nApplicants\u2019 banker Westcoal Building Society, Yourtown, 1234
\nNotes:
\n\u2022 Assume for credit card debts, the minimum monthly commitment should be calculated at 3% of the credit limit.
\n\u2022 Each of the working directors has appropriate death, income and disability insurance in place.
\n\u2022 A sensitisation factor of 2% should be used when calculating financial commitments.
\nTask 1b \u2014 Identify the clients\u2019 complex broking needs
\nPrepare a list of questions that you would need to ask Bill and John about their history, experience, business performance and the property purchase.
\nIn preparing your list of questions you should ensure that you cover the following:
\n\u2022 the complex features of Company and Trust structure and benefits that will come to the Company from purchase of this property
\n\u2022 the identification of potential risks in such a transaction and Bill\u2019s and John\u2019s tolerance of risk
\n\u2022 the financial aspects of the transaction and current financial position of the business.
\nIn 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:
\n\u2013 how you would identify the risks and the criteria you used to evaluate these risks
\n\u2013 how you would assess their current debt exposure; the tools you would use in terms of risk probability, impact and consequences.
\n(800 words)
\nStudent response to Task 1b
\n\u2022 Tell me about how you got started in the real estate industry
\n\u2022 Trading name
\n\u2022 Purpose of the loan
\n\u2022 ABN
\n\u2022 Purpose of the facility
\n\u2022 Finance product being sought
\n\u2022 Ammount of funds request
\n\u2022 Industry experience
\n\u2022 Have either of them ever been bankrupt
\n\u2022 Up to date on tax payments?
\n\u2022 Up to date on GST payments?
\n\u2022 Registered for GST? How long?
\n\u2022 How long have they held the ABN?
\n\u2022 Any legal actions pending?
\n\u2022 Clear credit histories?
\n\u2022 Up to date on super payments?
\n\u2022 Are all borrowers\/directors permanent Australian residents?
\n\u2022 Do the borrowers\/directors currently own property?
\n\u2022 Current on going business debts\/liabilities?
\n\u2022 Do you wish to use the loan tto refinance?
\n\u2022 Number of employee\u2019s in the trading company
\n\u2022 Do they have any dependants?
\n\u2022 Maritial Status
\n\u2022 How will the loan be repaid?
\n\u2022 P&! or IO
\n\u2022 Fixed or variable rate.
\n\u2022 Have you ever been a shareholder or an officer of any company to which a manager, receiver, administrator or liquidator has been appointed?
\nI am satisfied that risk is minimal as the business has been run successfully for three years and is managed by leaders with significant 15 year tenures in the industry. Real estate is a well established industry and will always be in demand and the business generates enough cashflow to meet its current and future demands.
\nAssessor feedback for Task 1b \u2014 Identify the clients\u2019 complex broking needs:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 2b \u2014 Prepare complex broking options
\nYou 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.
\nIn 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.
\nIn developing your report you should cover the following:
\n1. the parties to the loan
\n2. what is the best loan structure for this transaction \u2014 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 security
\n3. your recommendation of the best option, including amount, security\/collateral, term, repayments and potential interest rate
\n4. 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
\n5. the procedure to commence the loan, including documentation Bill and John need to provide
\n6. the client responsibilities, so Bill and John fully understand the facility being proposed
\n7. outline the risks (potential and real) of which Bill and John should be made aware
\n8. 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)
\n9. a summary of fees and charges \u2014 including those for setup and those of the lender
\n10. a request for client to inform you of any questions about the transaction and\/or provide an instruction for you to proceed
\n11. advise which relevant disclosures need to be made
\n(800 words)
\nNotes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
\nYou are to write a report to clients demonstrating your professional writing skill, not simply commenting on each of the points detailed above.
\nThe use of tables in the report, to set out some of the numeric information, may be of benefit.
\nStudent response to Task 2b
\nAnswer here
\nAssessor feedback for Task 2b \u2014 Prepare complex broking options
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 3b \u2014 Implement complex loan structures
\nBill and John have accepted your recommendations and have given you authority to proceed with their application.
\nAs part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval.
\nNote: Lenders have different credit policies and submission requirements do vary from lender to lender.
\nYour loan submission must include the following:
\n\u2022 details of borrower, guarantors and their contact details
\n\u2022 borrowers\u2019 backgrounds
\n\u2022 an overview of the proposal \u2014 what the finance is for:
\n\u2013 the proposed structure of the facility being recommended \u2014 product type, deposit amount (if required), loan amount, term, interest rate and residual value (if any) Note: Loan is based on a 70% LVR, a 7% interest rate and 15 year term.
\n\u2013 full details of the security\/collateral that is to be provided
\n\u2013 Sensitised serviceability calculations including Debt Service Cover Ratio (DSCR) calculation and all personal borrowing facilities of directors (sensitisation rate is disclosed in case background)
\n\u2013 provide a funds-to-complete table, including statutory costs and any relevant fees
\n\u2013 highlight the relevant risks, industry, business, transactional and how they are mitigated
\n\u2013 any other information that is relevant to Help the lender provide an approval
\n\u2013 your comments and recommendations
\n\u2013 list attachments.
\n(800 words)
\nNotes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
\nYou are to write a formal submission to the lender, not simply commenting on each of the points detailed above.
\nThe use of tables in the report, to set out some of the numeric information, may be of benefit.
\nStudent response to Task 3b
\nAnswer here
\nAssessor feedback for Task 3b \u2014 Implement complex loan structures:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nTask 4b \u2014 Detailing analysis findings
\nThis task will require you to assume the role of a credit assessor who is making a recommendation to their supervisor for approval of the loan application being assessed.
\nThis will require you to provide a detailed analysis of your research into the applicant and their industry (based on case study background), your findings and risk analysis for the lender.
\nVerification of the applicant\u2019s information and supporting documents includes testing and checking the integrity of information supplied.
\n1. Using the the information in the case study, check the legal entity of the business and identify which Australian Business Number (ABN) is correct:
\n(a) 64-123-241-193
\n(b) 64-123-123-123
\n(c) 64-123-123-163
\nStudent response to Task 4b: Question 1
\nAnswer here
\n2. Identify two legislative requirements that should be reviewed to test and check compliance with identification processes for commercial borrowers.
\nStudent response to Task 4b: Question 2
\nAnswer here
\n3. What sources could you rely on to verify the financial data supplied by the client?
\nNote: As this is a case study only, you will need to explain where you would source the information, what processes you use to verify the financial data.
\nStudent response to Task 4b: Question 3
\nAnswer here
\n4. Following your review on the borrower\u2019s cashflow, provide a summary in the table below, by comparing current and future (project ( help with nursing paper writing from experts with MSN & DNP degrees)ed) cashflow position after the new loan; and any cashflow impact it may have for the applicant.
\nStudent response to Task 4b: Question 4
\nCurrent financial year Current year project ( help with nursing paper writing from experts with MSN & DNP degrees)ed
\nCurrent year net income after tax Answer here Projected net income after tax Answer here
\nRental add back Answer here Add back rent Answer here
\nLess new loan Answer here Less new loan Answer here
\nNet surplus cash flow Answer here Net surplus income Answer here
\nCashflow impact:
\nAnswer here
\n5. Detail the security instrument to be used for this transaction and what impact this may have on the business.
\nStudent response to Task 4b: Question 5
\nAnswer here
\n6. Outline any legal or other complex requirements identified
\nStudent response to Task 4b: Question 6
\nAnswer here
\n(Task 4b questions 1-6, 500 words)
\nNotes: To complete this task you will need to refer to the Toolbox and sections True Blue Pty Ltd trading as True Blue Real Estate and \u2018Lending organisation\u2019s guidelines, policies and procedures, Legislative requirements, Loan verification and audit standards\u2019 document found in the Toolbox. You may also need to conduct your own independent research to answer these questions.
\nAssessor feedback for Task 4b \u2014 Detailing Analysis Findings:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable
\nSection 3: Improving practice performance
\nNote: You only need to complete Section 1 or Section 2 tasks 1-4 in this assignment, plus Section 3 task 5.
\nTask 5 \u2013 Develop, research and monitor plans to improve performance
\nAs the owner of your mortgage brokerage practice, you have decided to undertake a review of the business and its processes with the objective: to improve its overall performance for the practice.
\n1. To achieve this, you will initially need to conduct some research on the internet. Reference sites are located in the Toolbox in the section: Improving practice performance. Once research is completed, you are required to develop and document your plans to introduce the new improvement into the practice. To do this, fill in the table below:
\nStudent response to Task 5: Question 1
\nGoals Current position Improvements
\nAnswer here Answer here Answer here
\nPerformance Current position Improvements
\nAnswer here Answer here Answer here
\nUsing data Current position Improvements
\nAnswer here Answer here Answer here
\nDocument Current position Improvements
\nAnswer here Answer here Answer here
\n2. While conducting this research you found that your credit representatives are failing to input all the essential data and document requirements into the aggregator software platform following a software upgrade. To avoid any potential breaches in compliance, provide an effective method you may use to negotiate an acceptable timeframe with the credit representatives to implement these new software processes.
\nStudent response to Task 5: Question 2
\nAnswer here
\n2. To monitor the progress of these changes you negotiated in question 2 above \u2014 with the credit representatives, complete the monitoring improvements table below:
\nStudent response to Task 5: Question 3
\nMonitoring Improvements
\nBefore Software upgrade After software upgrade Record of changes made
\nAnswer here Answer here Answer here
\n(Task 5, Question 1 and 2, 350 words)
\nAssessor feedback for Task 5 \u2014 Develop, research and monitor plans to improve performance:
\n(Insert Feedback)
\nQuestion(s) that need to be resubmitted (if required) (List question numbers)
\nFirst submission Not yet demonstrated
\nResubmission (if required) Not applicable<\/p>\n","protected":false},"excerpt":{"rendered":"
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