Read everything in this document before you start your assignment for Diploma of Finance and Mortgage Broking Management.
We recommend that you use the study plan for this subject to help you manage your time to complete the assignment within your enrolment period. Your study plan is in the KapLearn Diploma of Finance and Mortgage Broking Management subject room.
This assignment is split over 2 sections. The information and data you need to complete Sections 1 & 2 is presented in case studies at the beginning of those sections and each task.
The first section on complex lending and broking, requires you to answer the questions for one (1) of the three (3) available case studies. Each case study focuses on different lending scenario, (see diagram below).
Section 2 requires you to complete the six (6) tasks as listed in this template.
Do not delete/remove any sections of the document template.
Your assessor will mark your assignment and return it to you in the Diploma of Finance and Mortgage Broking Management subject room in KapLearn under the ‘Assessment’ tab.
They have a well-established client database that provides them with repeat ‘business to business’ dealings. Whilst they have only been trading for 26 months they have a solid business plan with written supply contracts with three major business clients and several smaller business clients.
Ray and Steve now require a loan to assist them with the purchase of a sophisticated machine, using the technical platform system CNC. This machine can be programmed to rapidly fabricate multiple components. The machine has an expected commercial lifespan of at least 15 years with operating software to be updated every three years. This software and upgrades is included in the purchase price of $800,000.They need to import the machine from the US. Initial enquiries with the US supplier have indicated that they will require a letter of credit for the import of the machine.
Steve has been in the metal fabrication field all his working life. He has an MBA and understands financial management. He also has solid engineering skills and developed the majority of the design works for the business. He is married and has no dependants. His wife is a school teacher and she will be retiring at the end of the year.
Ray worked with Steve at ‘Protech’ as a foreman. His skills are in production and managing project/job flow. He has high level technical skills and can complete works to specification at a high standard. Ray is divorced.
Prepare a list of questions that you would need to ask Ray and Steve about the proposed transaction.
Calculate the required servicing for the new debt, and the lender comfort surplus.
Outline the process and the risks (potential and real) of which Steve and Ray should be aware.
You are required to prepare a full report for Ray and Steve by outlining the process and the risks (potential and real) of which Ray and Steve should be aware.
In a suitable format, document the process that is required for Steve and Ray to obtain appropriate finance for their equipment and set up the loan.
12. A summary of all fees and charges — including those for setup and those of the lender.
The prospective clients need assistance with the acquisition of owner-occupied premises to replace their current business premises which is rented and becoming too small for their growing business.
Bill and John have provided the last two years’ financial accounts for the trading business, as well as interim accounts for 10 months of the current financial year.
• The complex features of Bill’s and John’s situation and objectives.
In a suitable format, document the process that is required for them purchase the new property and establishing the loan.
2. The best physical set up with the lender — are they using their own property as cross security or the investment property?
14. A summary of fees and charges — including those for setup and those of the lender.
Note: You may make any reasonable assumptions necessary in order to complete the proposal.
• Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
• You will need to calculate and include your workings of the required servicing and debt service cover ratio for the new debt and existing borrowings of Directors. Comment on the DSCR comfort level for lender.
• You may make any reasonable assumptions necessary in order to complete the proposal.