Hi everyone, long time no post.
I am on the verge of doing deposit finance deals, using joint ventures with the home owner, so the owner gets their full price and I am owed the 10% deposit by the buyer coming in. I have the legal paperwork, so that’s not a problem. The problem is that I understand that after the first transaction I need to be licenced as a credit provider, (ie, have an ACL), and it is not sufficient to be a credit representative as I am providing credit. I also understand that I need two years of experience as a credit provider, or two years in the finance industry before I can get my licence. How do I get my licence then? I need experience to get an ACL, yet I need an ACL to conduct the business, get experience and get a licence. Does this mean I have to do only lease options for two years to get that experience, or is there some other way? Also, does the fact that I am using joint venture agreements with the owners have any bearing on this issue? I was hoping that using JV’s meant that I did not need a licence.
Daniel.
Di Daniel
First up, may I suggest you have a look at a page on our website, entitled ACL Coverage; CLICK HERE
Then give me a call, as there may be a way of structuring the transaction so you are not the credit provider. It is worth remembering that , if someone is simply disposing of an asset, e.g. one property, they may not be seen as providing credit ‘in the course of a business’ and therefore not need an ACL to provide credit in this situation.
Of course, if you are giving ‘credit assistance’ to a potential buyer then you will need ACL coverage to ‘engage in credit activities other than as a credit provider’. ACL coverage for this authority can be provided by Credit Rep status.
As always, get independent legal advice on this.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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