I'm looking at applying for and Australian Credit Licence with ASIC, just in case somewhere down the line in the next few years or so, the opportunities arise to do wraps here and there. This way I will be fully prepared to do so.
However, upon reading what sort of information is required when filling out our application, it seems as though you really need to be "in the business" of providing credit, and that, to someone like me who may only plan to do 1 or 2 wraps a year at most, this is pretty much out of the question now. would I be right in saying so, or does the info on the application form seem more daunting than what it actually is?No I would say that is correct Jeff. I have read a few things where the authors have made out that the you just have to do a Certificate IV in Finance and Mortgage Broking and you can apply for your ACL. If you have registered before the 30 June deadline, although, I think ASIC have extended the deadline, the application is very detailed and you incur a lot of costs to maintain your licence besides the $450 annual fee.
Cheers Greg
Yep, thought so. Hardly seems worth it. I shall pursue other avenues. thanks Greg.
Hi Jeff
May I suggest you have a look at:
http://www.vendorfinanceinstitute.com.au
I declare an interest, in that we own Vendor Finance Institute Pty Ltd (VFI). If you go to the VFI site, you can request an information sheet on your options at this point, including our new course aimed at coaching vendor financiers through the ACL application process.The information sheet also outlines your other options, i.e. options that will still allow you to undertake vendor finance transactions without applying for the full ACL.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul
Thanks for your input, I'll be sure to check out your website
Cheers Jeff
You will also need to obtain a national police check, credit record check and fill out the business summary word document also found on ASIC's web site and join FOS or COSL $200 – $260 which has a cost to it before starting the application process.
Also make when you scan or do word that the picture files are TIFF format and Word Documents are RTF format or you won't be able to upload them during the licence application process.
There is a requirement to have a complaint process to follow in your business
and there is a requirement to keep up with training requirements.
Professional indemnity requirement you may be exempt from as a small scale wrapper you need to check the requirements on this.I think myself that if you do not have a credit licence and a deal comes along it may prevent you doing a wrap due to the time it takes to get a licence.
Hi All
In an earlier post above I mentioned our Information Sheet. I'll add it below as it may help. It does mention a course to be run by VFI at the end of it. Hopefully it's not excessive advertising
Vendor Financiers and the Australian Credit Licence
Registration for the Australian Credit LicenceRegistration for the Australian Credit Licence (ACL) closed on 30 June 2010. The Registration process allowed current Vendor Financiers to continue to operate their Vendor Finance business until 31 December 2010.
Businesses that Registered prior to 30 June, then have from 1 July 2010 to 31 December 2010 to make a full Application for the ACL.
Do I need an ACL?
The new National Credit Act requires anybody who is “in the business of” providing consumer credit or consumer credit advice, to hold an ACL
1. You do not need an ACL if you only plan to utilise Lease/Options.
2. If you plan to regularly use Instalment Contracts and/or Second Mortgages in your vendor finance (VF) business, you need to be an ACL holder or an accredited Representative of an ACL holder.
3. Even if you only plan to use an Instalment Contract and/or Second Mortgage once or twice a year, it is advisable to get ACL coverage for your Instalment Contracts and/or Second Mortgages, as the new National Credit Code does not clearly define the meaning of “in the business of …”.
If You Registered
If you Registered before 30 June 2010 you may continue your vendor finance business under this Registration until 31 December 2010. This gives you from 1 July 2010 until 31 December 2010 to apply for and gain an ACL, or alternatively, become an accredited Representative of an ACL holder.
While operating your VF business under the authority of a Registration you must ensure you operate within the rules and guidelines of the new National Credit Code (NCC).
If You Did Not Register
Registering for an ACL is no longer available. If you didn’t Register for an ACL before 30 June 2010 and you wish to operate a vendor finance business that needs ACL coverage, you have three options:
1. Become an accredited Representative of an ACL holder or ACL Registrant. (An ACL Registrant will have to gain an ACL to operate their business, after 31 December 2010.)2. Enter into a Joint Venture with an ACL Holder or ACL Registrant for a specific transaction that requires ACL coverage.
3. Apply for an ACL from ASIC. You should ensure that any transactions requiring ACL coverage are not undertaken until you gain your ACL or have ACL coverage via points 1 and 2 above.Not “in the business of …”
Nothing in the new National Credit Act requires you to hold an ACL to provide credit for the sale of your own property(s). However all sections of such a transaction must be structured in accordance with the requirements of the new NCC.This includes the pre sale checks you must carryout, ensuring the Contract documentation complies with the new NCC and that the on going administration of the resulting loan complies with the new Code.
While an ACL may not be mandatory in this situation, it may leave you open to non compliance with the new Act, if you do not get advice and assistance from an ACL holder or Registrant.
ACL Courses
Vendor Finance Institute Pty Ltd will soon commence courses to assist Vendor Financiers gain their ACL . The “ACL Application Course” will run for four days and is designed to have you ready for a full ACL application upon its completion.The aim of the Course is for you to complete a Certificate IV in Financial Services and have sufficient tools, policies and manuals in place, at Course completion, to allow you to complete the ACL application.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I have also discovered you need five years experience as a lender to get a license or be a representative of someone else.
Hi duckster
Unfortunately ASIC's Regulatory Guides on the Australian Credit Licence (ASL) do not confirm your mention of a requirement for 5 years experience . There is no fixed experience level, if you are applying for an ACL and already hold a Cert IV in Financial Services (usually a 3 or 4 day course). Each application will be looked at individually.
It is true that all ACL holders will be expected to hold a Cert IV by 30 June 2014.
At this time there is definitely no prior experience requirements to become a Representative. It is expected that most ACL holders will however require their Representatives to get a Cert IV now and all Representatives will have to have the Cert IV by 30 June 2014
There are a large number of ASIC Regulatory Guides covering the ACL. They all available of the ASIC website.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul
How much is your course and when are the Sydney dates?
I have never done a wrap, I don't even own any IP's, yet. So for someone like myself who has no previous experience, realistically, what are my chances of my application being accepted if i do your course?
Hi Jeff
If you haven't done any vendor finance transactions yet and therefore don't really know if vendor finance is for you, I wouldn't race off and apply for my ACL at this point.
There are a number of ways you can do a few vendor finance transactions without having to have your own ACL (see above). My suggestion would be to investigate the ways you can get ACL coverage for your first few VF transactions and then, if VF is for you, go for your own ACL.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks Paul, it's just that I've heard that it is only going to get harder over the next few years to obtain an ACL, so I was looking into doing it early to be prepared. However in your information sheet above, you state that nothing in the new NCC requires you to have an ACL if you are providing credit for the sale of your own property(s). So lets say, for arguments sake, i have a property. A few months after the tenant moves in, I give them the option of providing credit to them to purchase the property from me under an instalment contract. Because it was my property to begin with, would this mean I would be exempt from needing an ACL in this instance? Because I probably wouldn't be doing this very often, this sounds like it may be a better option for me if it is feasible.
Hi Jeff
The follow bit, from the Information Sheet, covers this situation:
"Nothing in the new National Credit Act requires you to hold an ACL to provide credit for the sale of your own property(s). However all sections of such a transaction must be structured in accordance with the requirements of the new NCC. This includes the pre sale checks you must carryout, ensuring the Contract documentation complies with the new NCC and that the on going administration of the resulting loan complies with the new Code.
While an ACL may not be mandatory in this situation, it may leave you open to non compliance with the new Act, if you do not get advice and assistance from an ACL holder or Registrant."
If I were you in the situation you outline, I'd get an ACL holder to assist you structuring the transaction correctly and ensuring the transaction is administered on an ongoing basis as per the ACLThe ongoing administration can be done by a specialist VF administration company. These specialist admin companies will be ACL holders or Representatives themselves and may even help to setup the transaction for a reasonable price, especially if you give them the ongoing administration of the Instalment Contract (they usually charge about 4% of monies collected to undertake this admin).
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks Paul, I've looked onto these vendor finance admin companies and it seems like the way to go for me for now. I'll see how i go with that and make a decision about applying for an ACL afterwards. Thanks to everyone for their helpful info.
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