Hi my name is Tom and i'm 21, i'm currently wanting to get into vendor finance. and want to find out information as to getting a credit license.
what are the requirements ?
do you have to have a company to be able to get a credit license?
can i have a credit license as a individual?
is there a course i have to sit, or is it a online application?
any helps would be great!
Cheers, Tom
Easy Peasy
Step 1: Work out whether your business involves ‘credit activities’
Read Regulatory Guide 203 Do I need a credit licence? (RG 203). This guide will help you decide whether you need to get a credit licence.
Step 2: Familiarise yourself with the licensing process
Read RG 204 Applying for and varying a credit licence (RG 204). This guide outlines the process of applying for and varying your licence.
Step 3: Get your supporting documents together, you have to attach them to your application
Write a summary business description
Do background checks on your 'fit and proper' people. For each of them you must attach a:
national criminal history check (or overseas criminal history check for overseas people)
bankruptcy check
The criminal history check and bankruptcy check must not be more than 12 months old.
Your application will be rejected if you don't attach these supporting documents. See RG 204 for details.
Step 4: Get information about your responsible managers
You must include their qualifications and relevant work experience on the application.
Step 5: Think about who you will be authorising as credit representatives
You must tell us about any person authorised to engage in specified credit activities on your behalf.
Step 6: Make sure your external dispute resolution (EDR) scheme membership is current
When you apply for your licence, you must be a member of either:
Financial Ombudsman Service (www.fos.org.au Opens new window or phone 1300 56 55 62), or
Credit Ombudsman Service Ltd (www.cosl.com.au Opens new window or phone (02) 9273 8455).
Step 7: Make sure the details we already have about you are up-to-date
Check our registers (e.g company, Australian financial services licence, credit registration)
Step 8: Work out the licence fee you will have to pay
Here is how to calculate your fee.
Step 9: Understand your professional indemnity insurance obligations
Before ASIC grants your licence, you must demonstrate that you have adequate professional indemnity insurance in place.
ASIC guidance on professional indemnity insurance
We will ask you to complete this questionnaire about your professional indemnity insurance, and to provide us with a certificate of currency.
Tip – if you are unsure about how to complete this questionnaire, we suggest that you consult your insurance broker.
Step 10: Understand your other obligations as a licensee
ASIC guidance is available.
Are you ready? You must be able to declare that all of the information in your application is complete and accurate.
Ready to apply?
More info on the process here: http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Apply%20for%20a%20credit%20licence
All the best.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
And then in the afternoon you can rest…….
Don't want to appear rude but at 21 how many properties can you afford to buy and then onsell thru VF.
Neither of the mortgage insurers will openly provide cover where the property is to sold thru VF so it means you will need to provide 20% deposit on each new property.
Before you rush in and follow Colin's step by step guide think about what you are going to do once you have your License.
By the way Colin didn't mention the ongoing compliance and legal requirements.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
hi QLD, I've been wanting to get into second mortgage carry back deals where i could buy and then on sell so the person coming into the house doesn't need the deposit.
my main question was really did i have to be in a company to get the credit license.
I'm not trying to finance the hole property to someone.
and your question to how many i could afford. i personally have only 25k. but I'd wanting to use wraps. so i would use as least of my own money as possible.
and my dad has a line of credit out on his house which is 160k
Thanks Fms, yea i've been to the page on acis website. just wasn't to sure if i had to be in a company or not
Hi Tom
As i say with only 25K available i can't see you if doing 1 deal.
LMI is not available on a wrap deal so it would mean you have to put in a minimum of 20% of the purchase price.
Even with your fathers 150K LOC the property would need to be in your name as he couldn't offer credit terms without a license.
When i started First Home Owners Group (a specialist VF company) in 2000 we stuck in $5M cash between 3 of us to get up and running and whilst you could build some sort of a business with less financing has got a lot harder and prices have iincreased.
Also remember you need income outside of installment contract returns as lenders wont accept that without 2 years
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi qld,
Thanks for your insightful advice, much appreciated. when you say
Also remember you need income outside of installment contract returns as lenders wont accept that without 2 years
do you just mean 2 years employment / income? excluding installment contracts.
and also my MAIN question which no one really answered yet. is do you have to be in a company to get a credit license ?
and also i was thinking that if i got a credit license then i could for etc go to a home owner who has 100% equity and get financed into the property. could i do this? even know the home owner didn't have a credit license but i did?
Adding to that as well, me getting a credit license with my position now. couldn't i use it as a way to buy into properties? with 100% equity deals?
so maybe me not so much using vf for incoming buyers but more of a way for me to get into houses cheaply?
Tom no i meant lenders will want 2 Years business Tax returns in order to take your wrap income into consideration for servicing.
Also you don't need a License to buy a property as you are not the one providing Credit.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
so i would be wrong to think that if i had a credit license and there was a house with 100% equity that i using my license could arrange a loan application as them loaning me the money?
i was thinking maybe it could work both ways
Cheers, Tom
No Tom won't help you at all.
They would be the ones you would need to be Licensed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Qld,
Thanks a heap for clearing that up for me, i had that idea on my mind for a bit.
ok well could i use a JV and vendor finance? for etc. 100% equity deal i sign a jv with the home owner. and then use vendor finance strategies to on sell to a buyer?
so i would be the joint venturer with the credit license, the home owner would have the property and 100% equity. together using a JV we would on sell it using vendor finance terms?
sorry Qlds for so many questions you've been a big help at answering a lot of these questions i've had. I've recently moved from Queensland to victoria where you can't do lease options (well you have to pay stamp duty up front) and also stamp duty here is more then in qld for etc 400k house in qld is like 13k stamp duty here it is like 20k.
Thanks a lot, Tom
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