Short Answer Question 1

How does invoice discounting work? How should the relationship between the client and the factor or invoice discounter be managed?

Short Answer Question 2

In a complex business loan structure what procedures would be appropriate in the implementation process and how would that process be supervised? Use an example in your answer.

Short Answer Question 3

Choosing an appropriate car finance structure can be complex. Summarise with consideration to the various entities who may wish to purchase a vehicle the appropriate finance options as part of the implementation solution.

Short Answer Question 4

In each of the steps arranging a novated lease what documentation is needed?

Short Answer Question 5 

Two new clients have made an appointment with you upon referral. The clients you are about to meet are Richard and Pamela Lawry. They are Alex Kopf’s friends.

Facts obtained during the initial interview:

• Richard is 33 and Pamela is 21.

• Richard and Pamela run a business called Insight Studio which sells commercial eyewear such as binoculars and underwater goggles.

• The business has been through a growth phase and is in need of funds to take their business to the next level.

• Pamela does the books for the business and is concerned at the growing level of account receivables in the business especially as she knows some of them have not paid for some time and she is wondering whether more drastic action is needed.

• Richard has seen a tender advertised for deep sea goggles for the Navy complete with Government Funding and whilst he is interested he realizes that neither himself, Pamela or anyone in the business has the requisite skill sets to successfully apply for the funds.

• Richard is starting to become resentful of the fact that Pamela is driving a modern car and he is driving a Holden Camera which his Father bought him 15 years ago even though he needs to park on a hill to ensure it will start. Pamela insists that there is insufficient funds to buy Richard a new car even though she is concerned about Richards’s safety.

• The couple are open to options regarding leasing of new equipment to grow their business.

Activities:

(a) When you meet Richard and Pamela they are looking very apprehensive. How would you build rapport with the couple?

(b) Analyse Richard and Pamela’s situation to determine opportunities and constraints. Consider possible loan structures or options. Analyse, model, prioritise and measure fees and charges against risk. What finance recommendations, including the financing options of new equipment, would you suggest for their business issues? Which options did you reject and why did you consider them inappropriate? Note: Include all areas of finance for equipment, Government grant and debtors

(c) Richard has decided he wants a luxury car and yet Pamela believes he should stay with his older car to save money. She defends her need for a better car as she is not confident if the car were to break down and she knows Richard could cope with such a situation. How would you negotiate a solution for the couple?

(d) Assume Richard insists upon the luxury car and Pamela gives in. Conduct research into loan structures or options (these may be new or non-standard, if required). Consider Richard and Pamela’s financial issues in terms of their implications on an economic, legal, taxation, and insurance level. Also assess the nature of the securities to be taken. Which recommendations would you make and what documentation do you feel is necessary for the process to be successful?

(e) Using your analysis from either question (b) or (d), check your preliminary options to ensure compliance with relevant laws and regulatory/ethical guidelines. What fees will you charge if your clients run with your recommended option? How will you obtain and process these fees according to organisational and legislative requirements?