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

Commercial Edge Week Three

2020 Housekeeping 01 Please stay until the end to have your attendance marked 02 Keep your video on 03 Unmute if you’d like to ask a question 04 There will be quizzes and polls during the session 2 2

2020 Week two recap 01 01 Commercial property lending 02 02 Servicing calculations 3 3

Equipment Finance

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) 5

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 • 6

Why think Asset & Equipment Finance…. Why Why for for your Customers You Equipment Finance is ideal for your customers wanting • Additional income streams, paid at settlement to acquire cars & light commercial vehicles predominantly for business use without tying up • Competitive product and service offering working capital (eg: cash &/or OD) • Providing diversification • Building & strengthening relationships with • 100% funding available (No deposit) clients • Solely secured by asset being purchased not tying up • Assists with client retention business/personal assets • Simple online application process • Potential tax benefits • Way to keep in contact with your client • Balloon options available (assists cashflow) • Future financial needs • Interest Rates & repayments are fixed customer can budget with certainty 7

Product Types for Asset/ Equipment Finance….. Product Finance Lease Hire Purchase Commercial Loan Aka Chattel Mortgage/Goods Loan Minimum Loan $15,000 $15,000 $15,000 Amount 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 Westpac Westpac passes ownership Customer asset to customer at end of term Depreciation Westpac owns asset and Customer Customer claims depreciation Tax Deductibility Lease rental deductible if Interest on payments and Interest on payments and asset used for income depreciation if asset used depreciation if asset used producing purposes for income producing for income producing purposes purposes GST The customer pays GST on The customer pays upfront N/A each rental instalment and on amount financed as well the residual payment as the interest costs. GST can be financed. 8

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 9

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

DriveXpress Updating Cars and Equipment for business If this criteria applies to your client, then use ? DriveXpress can help give you a quick answer on the following assets (age up to Asset from a Licensed Dealer and up to 4 4yrs) : years old • Cars Private sale purchases are permitted for light commercial vehicles <4.5T & Cars only • Light commercial vehicles (under 4.5T GVM) <$150K (not taxi/hire cars) Other Assets Pre COVID – was applicable for New to • Trailers bank customers the amount financed • Forklifts, Boom/Scissor Lifts & Tele- ≤ $150K per transaction (to a maximum of Handlers $250K per connection/group) not applicable • Dump Trucks / Excavators / Graders till further notice /Scrapers / Dozers Due to Covid only applicable for Existing • Backhoes, Front-End loaders & Bobcats Business lending customers to the • Tractors / Headers / Harvesters (age up Westpac Group - the amount financed up to 7yrs) to ≤ $250K per transaction [excluding cars, cars limited to $150K] (to a maximum of • Cotton Picker / Plough / Seeder / $500K per connection/group) Spreader / Sprayer (age up to 7yrs) 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: When Approved: • No financials required if eligibility criteria • Client to sign loan documents including met Affordability Statement • Easy application via DriveOnline written • Rates notice to confirm property consent or Electronic function within ownership DriveOnine • Comprehensive insurance noting WBC as an interested party

Questions to cover off with the customer 13

How does the process work? - Broker obtains Tax Invoice Broker Emails - Executed from supplier documents, completed Broker identifies - Broker to email tax invoice to checklist, copy of approval, opportunity and client to requesting insurance quote, insurance, Direct determines customers Debit details, AML if - Broker emails tax invoice to needs applicable, Supplier and supplier verification team (WBC is commercial lending only) Brokerage Tax invoice/fee SupplierVerification@westpac.com.au refund generated via AFGB - Broker generates platform to documentation via DriveOnline drivexpress_settlements@westpac.com.au - Organise customer to sign Dox Broker to quote via AFGB platform, you choose lender and - Formal Decision is - Westpac settles deal provide direct to emailed to Broker pays supplier and customer - Broker relays outcome brokerage to client Service standard time Settlement - DriveXpress: 1 day - Confirmation email If W.E.F. sent to broker - Create App in Westpac receives AFGB application and begins to process - Finalise it in Drive. Service standard time - Validate and submit Credit with signed Privacy Customer collects Form or Electronic - DriveXpress – 1 day asset from supplier Privacy * 14 * Linkage to VEDA to conduct credit check

Supplier Tax Brokerage Tax Quoting RV & Balloon Invoice request Invoice example ATO Guidelines Broker to arrange Broker to generate via AFG Business platform Add .5 to above to get max RV/Balloon You can utilise the Pro-forma in the AFGB Platform Provide at settlement Provide at Settlement 15

Broker Remuneration 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 16 • $650 for Private Sale transactions (refer to BDM for private sale conditions)

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 17