Vendor Finance Administration
- Thread starter brierleyg
- Start date
Vendor Finance Management Pty Ltd
Hi Greg
We get a company called Vendor Finance Management (VFM) to administer all our vendor finance (VF) Instalment Contracts. They can be found at:
http://www.vendorfinancemanagement.com.au
They charge 4.4% (including GST) of monies collected, plus a monthly admin fee of $4.40. I should also declare that we own this company.
If a VF buyer is late with their payment, VFM generates an Arrears Notice. The arrears turn into a default after 14 days and, at this point, VFM generates a Notice of Default and moves the loan into default interest. If the default is not rectified within 28 days, VFM generates a Notice of Termination.
There are other recurring notices that VFM have to send out under the new National Credit Code, such as Drawdown Reports, six monthly statements and Notices of Payment Change (interest rate changes).
While I'm biased, it's great not having to do all that admin every week/month.
We find somewhere between 5% and 10% of VF purchasers don't complete the sale, mainly for relationship breakup reasons. We then get the property back and have the opportunity to do with it whatever we wish.
In regard to the security involved with purchasing with an Instalment contract, it is worth noting a recent case in Victoria, where a VF seller went bankrupt. As a result of the Instalment Contract being properly written up by a lawyer and consistently managed, the trustee in bankruptcy has been unable to get the property and the VF buyer's Instalment Contract remains in place, as do they in their home.
Cheers, Paul
Hi Greg
We get a company called Vendor Finance Management (VFM) to administer all our vendor finance (VF) Instalment Contracts. They can be found at:
http://www.vendorfinancemanagement.com.au
They charge 4.4% (including GST) of monies collected, plus a monthly admin fee of $4.40. I should also declare that we own this company.
If a VF buyer is late with their payment, VFM generates an Arrears Notice. The arrears turn into a default after 14 days and, at this point, VFM generates a Notice of Default and moves the loan into default interest. If the default is not rectified within 28 days, VFM generates a Notice of Termination.
There are other recurring notices that VFM have to send out under the new National Credit Code, such as Drawdown Reports, six monthly statements and Notices of Payment Change (interest rate changes).
While I'm biased, it's great not having to do all that admin every week/month.
We find somewhere between 5% and 10% of VF purchasers don't complete the sale, mainly for relationship breakup reasons. We then get the property back and have the opportunity to do with it whatever we wish.
In regard to the security involved with purchasing with an Instalment contract, it is worth noting a recent case in Victoria, where a VF seller went bankrupt. As a result of the Instalment Contract being properly written up by a lawyer and consistently managed, the trustee in bankruptcy has been unable to get the property and the VF buyer's Instalment Contract remains in place, as do they in their home.
Cheers, Paul
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