Task 2a —Develop complex broking options
You 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.
In a suitable report format you should cover the following:
1. the parties to the loan
2. 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
3. the product options that are available to finance an equipment purchase once it has arrived in Australia
4. your recommendation of best product option, including amount, security/collateral, term, potential interest rate and residual value (if any)
5. 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
6. the procedure to commence the import of the equipment and the loan, including documentation Ray and Steve need to provide
7. the client responsibilities, so Steve and Ray fully understand the facility being proposed
8. outline the risks (potential and real) of which Ray and Steve should be made aware
9. whether personal guarantee will be required from the Director’s spouse
10. a summary of all fees and charges — including those for setup and those of the lender
11. advise which relevant disclosures need to be made
12. a request for client to inform you of any questions about the transaction and/or provide an instruction to proceed.
(800 words)
Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
You are to write a report to your clients, demonstrating your professional writing skill — not simply commenting on each of the points detailed above.
The use of tables in the report to set out some of the numeric information may be of benefit.
Student response to Task 2a
Assessor feedback for Task 2a: Resubmission required?
No
Task 3a — Implement complex loan structures
Ray and Steve have accepted your recommendations and have given you authority to proceed with their application.
As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Your loan submission must include the following:
• details of borrower, guarantors and all contact details
• borrowers background
• an overview of the proposal — what the finance is for
• the proposed structure of the facility being recommended — product type, deposit amount (if required), loan amount, term, interest rate and residual value (if any)
• full details of the security/collateral that is to be provided
• serviceability calculations including Debt Service Cover Ratio (DSCR) calculations, including all personal borrowing facilities of the directors
• provide a ‘funds-to-complete’ table including statutory costs and any relevant fees
• highlight the relevant risks — industry, business, transactional — and how they are mitigated
• any other information that is relevant to assist the lender provide an approval
• your comments and recommendations
• list attachments
(800 words)
Notes: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
You are to write a formal submission to the lender; not simply commenting on each of the points detailed above.
The use of tables in the report, to set out some of the numeric information, may be of benefit.