Credit Impaired Finance

Credit Impaired Finance

Credit Impaired Finance

Credit Impaired Finance
Some clients fall outside traditional lending criteria because they have adverse credit history such as defaults on payments for goods and services, court judgments against them, or they have been bankrupt. Capital Growth has a variety of viable alternate credit impaired options available for you to recommend to your clients.

How do these loans differ?

A credit impaired loan, or ‘non-conforming loan’, differs from loan products readily available at lenders’ branches. Lenders have established a matrix for non-conforming characteristics that define the level of credit impairment – from clear to severe. This level of impairment, and the amount of property equity, determines the end interest rate applied by the lender, and the products available to the client.

Although credit impaired rates are often higher than standard loan rates, they are more cost effective compared to alternative options such as:

  • Losing a home at a mortgagee auction
  • Proceeding to bankruptcy
  • Consolidating Existing Loans in Arrears (incurs high penalties)
  • Using expensive credit cards or store cards

Who can use this service?

This service is available to the following potential client scenarios:

  • Clients who have tax debts
  • Clients with defaults or judgments
  • Clients with a prior bankruptcy
  • Clients with part IX or X bankruptcy
  • Clients with diverse income sources or who are unable to fully document their income
  • Clients with irregular income
  • Clients who have a gifted deposit
  • Self-employed clients
  • Small business owners

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Frequently Asked Questions

Frequently Asked Questions

Frequently Asked Questions

How do we differ from a broker?

Capital Growth offers a strong alternative to the traditional & finance broker model. All services are 100% referral based allowing you to refer your clients to licensed experts, and be rewarded with a significant share of referral commission. In addition, there is no formal training, reporting or accreditation requirements imposed on your time or business – a strong point of differentiation when compared to the growing legislative requirements now being implemented in the broker industry.

What are the costs involved?

There are no initial or ongoing fees associated with Capital Growth’s Referral Partners Program.

Do I need formal training or accreditation?

There are no formal training, reporting or accreditation requirements for clients of Capital Growth. Our services are 100% referral based and therefore by referring your clients to licensed professionals all licensing and accreditation requirements are the responsibility of the parties making formal recommendations to your clients. Our belief is that a referral based relationship will provide further value for your business as the legislative requirements on the finance broker industry undoubtedly becomes more onerous.

Are all commissions disclosed to relevant parties?

It is a legislative requirement that all commissions payable to third parties are disclosed. Commission is disclosed on two levels: Firstly, all gross commissions payable under contract from the banks to Capital Growth is disclosed in the lender’s loan offer document to the client. Secondly, as the referrer, you are required to disclose to your client that you will receive a commission from Capital Growth at the initial stage the transaction.

Are my clients dealing with licensed professionals?

A strength of our referral model is the ability for business professionals to deal directly with licensed lending and property professionals, and retain full ownership of the client throughout all stages of the transaction and thereafter. Unlike a broker associated transaction, you retain full control of the process and ensure that your clients obtain independent advice regardless of the level of commission being paid to a third party.

Are my clients profiled for cross marketing?

A significant differential with our referral based model is the strict “non compete” clause we have built into our contract for clients. A “non compete” guarantees that our panel of lenders will not market additional services such as financial planning / general insurance without prior consent from the client. This ensures that whilst the finance needs of your clients are fully serviced by our lenders, they are quarantined from unsolicited cross marketing. This differentiates from a brokerage model where banks retain the right to cross market additional products and services in order to build a closer relationship with your clients.

Who owns the income?

All trail income is owned by the referring partner for the time it remains on the lender’s books and for the period Capital Growth receives remuneration. We refer to this as an “EverGreen Clause” and the terms are clearly set out in our agreements.

How am I remunerated?

Capital Growth manages all commission reconciliation on your behalf with net commissions deposited to your nominated account prior to the 30th of each month. In addition, recipient created tax invoices and client portfolio statements are forwarded to your office each month to assist with administration and financial recording of this service.

Does Capital Growth offer the option to become an authorised Credit Representative?

Yes, Capital Growth also offers Referrers the option to obtain Credit Representative status should this suite your business requirements. For further details please speak to one of Capital Growth’s Account Manager.

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