As one of Australia’s most experienced Vendor Finance lawyers wrote recently, “anyone serious about vendor finance cannot be a one trick pony – that is, do lease options only.”
The National Consumer Credit Protection Act requires anybody or any company who “in the course of a business” provides consumer credit or consumer credit advice, to hold an Australian Credit Licence (ACL) or to be a Credit Representative (CR) of an ACL holder.
- You do not need an ACL coverage if you only plan to use Lease/Options.
- If you plan to use Instalment Contracts and/or vendor financed Mortgages in your vendor finance (VF) business, you need to be an ACL holder or a CR.
- All Vendor Financiers who intend to become VF Joint Venturers, or who desire to advertise on websites or in the media need to obtain an ACL or be authorised as a CR.
In an effort to ensure all Vendor Financiers are protected from a claim that they do not have ACL coverage and are operating while “unlicensed”, we suggest all Vendor Financiers, at a minimum, become an authorised CR. The easiest way to do this is:
1. Complete a Certificate IV in Finance and Mortgage Broking (course ID FNS40815). Course delivery options range from distance learning through to intensive 3 day classroom programs;
2. Then, with Cert IV in hand, join a Mortgage Aggregation group. Most Mortgage Aggregation groups (companies) have an option for new brokers to become CR’s of their ACL.
Ensuring you have, at a minimum, CR status will protect you from the large penalties that can be imposed for operating your Vendor Finance business while unlicensed.