Commercial Edge Week One
2020 Agenda 01 What’s the opportunity? 02 Breaking down the steps to winning in commercial 2 2
2020 Who are we? We are an additional resource to our members business. Irrespective of where you are on your commercial journey, we’re here to help. Our goal is to find the best solution for you and your customer. Richele Janjatovic Dawood Odeh Commercial BDM Commercial BDM VIC & TAS NSW, ACT & QLD 3
2020 Our Commercial Team Structure Collectively > 150 years of commercial lending experience Minimum of 10 Years 4
What’s the opportunity?
2020 Business Customer Lifecycle Same Client – Extra Income Commercial Property Investment Buy a (Stand-alone) business Family Home Vehicles/Equipment Home AFG Investment Business Premises Loans Property Business (Owner occupied) ~ $392b ~ $389b Holiday More Equipment / Home Vehicles Working capital / SMSF – Commercial Invoice Finance or Resi property 6
2020 Increase your return – Paid referral 30% Residential Home Loan $450,000 Referral fee = $810 Net income (HL only) = $1,890 0.60% Upfront $2,700 Net income (HL + Commercial + AF) = $13,593 0.165% trail over 3 years $2,228 What did it cost you? Commercial Property Loan $500,000 Home Loan only $810 / $4,928 = 16% 0.50% Upfront $2,500 0.165% Trail over 3 years $2,475 Home Loan + Commercial + Asset Finance $810 / $14,403 = 5% Asset Finance $150,000 – 3 cars Increase your 3% Brokerage $4,500 return by over 300% Total income $14,403 7
Lender Share of Big 4 Market share for the majors is reducing in the commercial space.
Breaking down the steps to winning in commercial
2020 What support do you need? ( K + P + S ) x M = Opportunity Knowledge Do you need a better understanding of commercial – if so, what specifically? Process Do you need more support on how to submit and structure the deal? Skill Do you need help having conversations with self employed clients? Mindset Do you want to? 10
Diversify your income and offer a complete financial solution AFGB Program AFG Business is the only platform of its kind in Australia. You’ll be equipped with the tools and strategy to help you diversify into business lending. • Commercial BDM’s + PM Support Quickly find and secure Industry-first, • Commercial Scenario and Support Desk The largest panel of a range of products for back-channel business lenders of clients in one simple messaging • Learning and Development Program any Australian application. system. aggregator. • Commercial Edge Training Program • Specialist Lender Product Program Integrated live chat with Specialist support for business lending deal workshopping, specialists. applications and lodgement. Full learning AFG Commercial Simplified and training Powered by Thinktank accreditations pathways product range. and paperwork. and courses.
2020 Six steps in commercial Step 3 Step 2 Step 4 Step 5 Step 6 Discover Step 1 Book a Workshop Present Lodge & their goals Spot Opportunity meeting the deal options settle a and needs deal 12
Step 1 Spot the opportunity 1. Market online – LinkedIn, FB and Instagram 2. Existing Financials 3. Align yourself to an accountant 4. Align yourself to a business broker 5. Align yourself to a commercial agent
2020 Purpose of funds is key Purpose Determines Determines Determines Determines of funds the product the security the loan the rate required term 14
2020 Purpose of funds is key Working capital – Term Loans – Asset Finance – Guarantees – anything to do with cash flow anything to fund a larger asset i.e. a anything to fund an asset that has a guaranteeing performance of a job or property or a business serial number securing a rental deposit Overdraft Business loan Chattel Mortgages Performance guarantee Line of credit Lease doc loan Novated lease Rental guarantee Debtor Finance Commercial Bills Hire purchase Commercial credit card Short term loans Trade finance The first thing to always ask is – what do you need the money for ? This will direct the conversation to what products you have available in the market. They will always fall into four categories as per above – then you’ll have sub-categories available. For example, you wouldn’t provide business loan to a customer, who needs a car for their business. 15
Refer to handout – Financials
Step 2 Book the meeting • Use the double bind technique “Hi Joe, The purpose of my call is because I was thinking about your business and would love to float an idea past you. Would next Wednesday after 1pm or Thursday after 10am suit you?”
Step 3 Discover their goals and needs • Utilise your aggregator fact find or create your own • Your goal is to walk away understanding: 1. Purpose of funds 2. What they do 3. What is important to them
2020 Step 4 Workshop Seeking a commercial property for o/o purposes. Clients will cease renting and the new site will provide an additional 600 Purpose of funds: sqm storage and office space. Address: 123 ABC St, Port Melbourne Purchase price: $1,200,000 Loan amount sought: $960,000 LVR Sought: 80% Stamp duty and GST: Client will self fund Additional landed Nil security: Sponsor has been in commercial and residential plumbing for 11 Sponsor: years and operating his business for 6 years Website: Insert website of the business Doc type: Full financials available Other: Paid default on personal credit file $256.98 Important to the Lowest deposit and need for low doc as financials are not client: available 19
Step 5 Present options
2020 AFGB Platform Asset Finance Commercial 21
Contact us Next week 01 Commercial property lending 02 Servicing calculations Richele Janjatovic Dawood Odeh Commercial BDM Commercial BDM VIC & TAS NSW, ACT & QLD Richele.Janjatovic@afgonline.com.au Dawood.Odeh@afgonline.com.au
Thank you for attending Please note AFG does not provide tax, legal or accounting advice. Any information contained in this document is of a general nature only and does not take into account the objectives, financial situation or need of any particular person and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Therefore, before making any decision, your clients should consider the appropriateness of the information with regard to those matters and consult their own tax, legal and accounting advisors before engaging in or considering the appropriateness of any transaction.Australian Finance Group (Commercial) Pty Ltd ABN 52 081 643 512 Australian Credit Licence 392750
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