Commercial EdgeWeek Three

2

2020

Please stay until the end to have your attendance marked

Housekeeping

2

0102 Keep your video on

0304

Unmute if you’d like to ask a question

There will be quizzes and polls during the session

3

2020

Commercial property lending

Servicing calculations

Week two recap

01

02

3

01

02

Equipment Finance

5

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)

6

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

7

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

8

Product Finance Lease Hire Purchase Commercial LoanAka 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 on amount financed as well as the interest costs. GST can be financed.

N/A

Product Types for Asset/ Equipment Finance…..

9

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

DriveXpressAFGB Brokers get access to Westpac’s market leading online Asset Finance platform called DriveOnlineallowing 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)

DriveXpressEligibility 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 ownership

• Comprehensive insurance noting WBC as an interested party

13

Questions to cover off with the customer

14

How does the process work?

Broker identifies opportunity 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 processService 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

15

Supplier Tax Invoice request

Brokerage Tax

Invoice example

Quoting RV & Balloon

ATO Guidelines

Add .5 to above to get max RV/BalloonBroker 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

16

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

17

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

19

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

20

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

22

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 usNext week

01 Asset Finance recap

02 Working Capital with Get Capital

03 Submitting a deal via AFG Business Richele Janjatovic Dawood Odeh

Commercial BDMVIC & TAS

Commercial BDMNSW, ACT & QLD

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