Hi,
Whether people realise it or not, vendor financing WILL become more regulated in Australia.
But regulation does not mean banning. All it means is that there will be a standard of best practice that, when followed, will make such transactions fair for everyone.
In Australia we currently have a very good form of regulation called the Australian Uniform Consumer Credit Code (UCCC) which applies to any loan (or credit) issued by a business where more than 50% is used for personal use.
Personal use is basically that which is not an investment. Some examples of personal use would be;
- a mortgage for your principal place of residence (PPOR)
- a holiday
- a car
- an interest free plan to buy electrical goods from Harvey Norman.
The Code regulates the layout and content of a loan contract and how the loans are managed, covering such aspects as;
- advance notice when fees are due
- how interest rate changes are applied
- record keeping and statements
- and a strict process that must be followed when a default occurs.
There is plenty of information available at the Government website at www.creditcode.gov.au
Now as a vendor financier myself, I soon learnt the difference between knowing what a wrap is and actually doing one. Like many in Australia I learnt the technique of vendor financing in a seminar, got my hands on a contract and began from there.
But finding the Client and Property is literally the beginning, it doesn't stop there. Once the contract begins you have to service it. Which is why vendor financing is more of a business than an investment.
Initially I, again like others did their statements in a spreadsheet (other's opting to use a combination of an accounting program and spreadsheet), but I soon realised this would just turn the whole thing into a job and what I wanted was a business.
My background is in managing mainframe systems with automation tools and my partner Yuchun is a professional software tester. So we spent some time working out something better.
Well it actually took 18 months, not including the 2 years we spent learning and implementing vendor finance contracts before that.
What we came up with was a program that would allow us to generate loan statements, issue fee notices and automatically alert us when a fee payment is late or a loan is in arrears.
We had a look at the various products that were available on the market at the time, and nothing suited us. And recently one of those products dropped their support.
As we developed our own solution we understood the need for a stable program too, which is why we spent so much time testing. If fact we engaged quite a few beta testers who are very experienced and successful vendor financiers in their own right.
Our goal was to have a stable reliable product. We concluded that if others do use our product that they should have a facility they could report problems, which is why we also have a dedicated forum for the users to log faults and to make suggestions.
I guess the only question at the moment is how much?
Put simply, we are charging $799, but we will offer an instalment payment plan for our initial purchasers. That's right we're offering vendor finance on our vendor finance software.
But we don't expect you to race out and buy it straight away (as much as we would like you to) which is why we offer the ability to download a free trial version of the product from our website.
The trial version has everything you'll find in the registered version, the only limits we have imposed are;
- you can only add/edit 1 client
- you can only add/edit 1 property
- you can only add/edit 1 loan
- you can only print 1 statement
With the ability to edit the client, property and loan, you can play around with the settings to see how each affects the reports.
Other than that you will get to see the user manual and all the panels and windows.
Yuch and I have been working on this for a long time and we're excited that its finally ready.
I'm quite happy to open this thread to questions, I believe our product is good and am proud of the result. So fire away!
By the way the website can be found at www.loanalert.com.au
Regards
Michael Gruber
Whether people realise it or not, vendor financing WILL become more regulated in Australia.
But regulation does not mean banning. All it means is that there will be a standard of best practice that, when followed, will make such transactions fair for everyone.
In Australia we currently have a very good form of regulation called the Australian Uniform Consumer Credit Code (UCCC) which applies to any loan (or credit) issued by a business where more than 50% is used for personal use.
Personal use is basically that which is not an investment. Some examples of personal use would be;
- a mortgage for your principal place of residence (PPOR)
- a holiday
- a car
- an interest free plan to buy electrical goods from Harvey Norman.
The Code regulates the layout and content of a loan contract and how the loans are managed, covering such aspects as;
- advance notice when fees are due
- how interest rate changes are applied
- record keeping and statements
- and a strict process that must be followed when a default occurs.
There is plenty of information available at the Government website at www.creditcode.gov.au
Now as a vendor financier myself, I soon learnt the difference between knowing what a wrap is and actually doing one. Like many in Australia I learnt the technique of vendor financing in a seminar, got my hands on a contract and began from there.
But finding the Client and Property is literally the beginning, it doesn't stop there. Once the contract begins you have to service it. Which is why vendor financing is more of a business than an investment.
Initially I, again like others did their statements in a spreadsheet (other's opting to use a combination of an accounting program and spreadsheet), but I soon realised this would just turn the whole thing into a job and what I wanted was a business.
My background is in managing mainframe systems with automation tools and my partner Yuchun is a professional software tester. So we spent some time working out something better.
Well it actually took 18 months, not including the 2 years we spent learning and implementing vendor finance contracts before that.
What we came up with was a program that would allow us to generate loan statements, issue fee notices and automatically alert us when a fee payment is late or a loan is in arrears.
We had a look at the various products that were available on the market at the time, and nothing suited us. And recently one of those products dropped their support.
As we developed our own solution we understood the need for a stable program too, which is why we spent so much time testing. If fact we engaged quite a few beta testers who are very experienced and successful vendor financiers in their own right.
Our goal was to have a stable reliable product. We concluded that if others do use our product that they should have a facility they could report problems, which is why we also have a dedicated forum for the users to log faults and to make suggestions.
I guess the only question at the moment is how much?
Put simply, we are charging $799, but we will offer an instalment payment plan for our initial purchasers. That's right we're offering vendor finance on our vendor finance software.
But we don't expect you to race out and buy it straight away (as much as we would like you to) which is why we offer the ability to download a free trial version of the product from our website.
The trial version has everything you'll find in the registered version, the only limits we have imposed are;
- you can only add/edit 1 client
- you can only add/edit 1 property
- you can only add/edit 1 loan
- you can only print 1 statement
With the ability to edit the client, property and loan, you can play around with the settings to see how each affects the reports.
Other than that you will get to see the user manual and all the panels and windows.
Yuch and I have been working on this for a long time and we're excited that its finally ready.
I'm quite happy to open this thread to questions, I believe our product is good and am proud of the result. So fire away!
By the way the website can be found at www.loanalert.com.au
Regards
Michael Gruber
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