DIPMB2_AS_v3A1: Complex Lending and Broking Written Assignment - Accounting Assignment Help

Assignment Task:

Task:

Read everything in this document before you start your written assignment for the Complex Lending and Broking (DIPMB2) subject.
About this document
This document is the written assignment and includes the following:
•Instructions for completing and submitting this written assignment
•Section 1: Case Study A:Ray Murdoch and Steve Brown? Commercial Equipment Finance
–Task 1a ?Identify the clients’ complex broking needs
–Task 2a ? Develop complex broking options
–Task 3a ? Implement complex loan structures
–Task 4a? Detailing analysis findings
•Section 2: Case Study B:Bill Smith and John Jones?Commercial Premises Finance
–Task 1b ?Identify the clients’ complex broking needs
–Task 2b ? Prepare complex broking options
–Task 3b ? Implement complex loan structures
–Task 4b?Detailing analysis findings
•Section 3: Improving practice performance
–Task 5?Develop, research and monitor plans to improve performance
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete the written assignment within your enrolment period. Your study plan is in the KapLearn Complex Lending and Broking (DIPMB2_v3) subject room.
Instructions for completing and submitting this written assignment
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work regularly.
•Use the template provided, as other formats will not be accepted for this written assignment.
•Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber (e.g. 12345678_DIPMB2_AS_v3A1_Submission1).
•Include your student ID on the first page of the written assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.
The written assignment
The information and data you need to complete this written assignment is presented in the case studies at the beginning of each task.
This written assignment covers complex lending and broking and requires you to answer the questions for Section one (1)or Section two (2)and Section 3. Each case study focuses on a different lending scenario.

Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.
Additional research
When completing this assignment, assumptions are permitted although they must not be in conflict with the information provided in the Case Studies.
You may also be required to source additional information from other organisations in the finance industry to find the right products or services to meet your client’s requirements, or to calculate any service fees that may be applicable.
Submitting the written assignment
Only Microsoft Office compatible written assignments submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to save and submit this entire document.
Do not remove any sections of the document.
Do not save your completed written assignment as a PDF.
The written assignment must be completed before submitting it to Kaplan Professional Education. Incomplete written assignments will be returned to you unmarked.
The maximum file size is 20MB for the written assignment. Once you submit your written assignment for marking you will be unable to make any further changes to it.
You are able to submit your written assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.
Please refer to the Assignment submission/resubmission instructions (pdf) in the Assessment section of KapLearn for details on how to submit your written assignment.
Your written assignment must be submitted on or before your due date. Please check KapLearn for the due date.
The written assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
If you reach the end of your initial enrolment period and have been deemed Not Yet Competent in one or more assessment items, then an additional 4 weeks will be granted, provided you attempted all assessment tasks during the initial enrolment period.
Your assessor will mark your written assignment and return it to you in the STYLEREF "Subject Title & code" \* MERGEFORMAT Complex Lending and Broking(DIPMB2_v3)subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in your written assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed written assignment.
How your written assignment is graded
Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or skills for each subject. As a result, you will be graded as either competent or not yet competent.
Your assessor will follow the below process when marking your written assignment:
•Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
•Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.
You must be deemed competent in all assessment items in order to be awarded your qualification, including demonstrating competency in:
•all of the exam questions
•the written assignment.
‘Not yet demonstrated’ and resubmissions
Should sections of your assignment be marked as ‘Not yet demonstrated’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘Not yet demonstrated’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.
Units of competency
This written assignment is your opportunity to demonstrate your competency against these units:
Unit code Unit name DIPMB2 Complex Lending and Broking DIPMB3 Business Management Skills
FNSFMB502Identify and develop broking options for clients with complex needsStarted Completed
FNSFMB503Present broking options to clients with complex needsStarted Completed
FNSFMB504Implement complex loan structuresStarted Completed
FNSCUS501Develop and nurture relationships with clients, other professionals and third party referrersStarted Completed
FNSPRM602Improve the practiceStarted Completed
Note that the written assignment is required to meet the requirements of the units of competency.
We are here to help
If you have any questions about this written assignment you can post your query at the ‘Ask your Tutor’ forum in your subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.
Section 1: Case study A — Ray Murdoch and Steve Brown— Commercial Equipment Finance
Note: You only need to complete Section 1 or Section 2 tasks 1–4 in this assignment, plus Section 3 task 5.
Some commerciallenders will not provide interest rate quotes on some commercial products.Often commercial lenders add a risk weighted margin to a base lending rate for certain commercial products. Without conducting an analysis and risk score, they tend to be reluctant to provide quoted interest rates over the phone. For the purposes of the case studies, conduct online research to ascertain approximate interest rates, loan terms available, fees and charges that usually align to the types of products that would be required to execute the client’s transaction. You are allowed to use estimates.
Background
You have just met with Ray Murdoch and Steve Brown, referred to you by another commercial client.
Ray Murdoch and Steve Brown jointly own a successful and growing business that manufactures metal pallets. They trade under the name Pallets-R-Us Pty Ltd. The pallets are manufactured using material that is lightweight and durable. There has also been a very structured approach to the research and development for the engineering and design of the pallets. The pallets are used in all industry sectors. Part of the process involves powder coating the finished product, which is currently outsourced to a local well-established contractor.
It is critical that Ray and Steve’s product meets market needs. They need to maintain sustainable production and operating costs if they are to meet their forecast sales and cost of sales.
They have a well-established client base that provides them with repeat ‘business-to-business’ dealings. They have been trading for five years andhave a solid business plan with written supply contracts with three major business clients and several smaller business clients.
Ray and Steve now require finance to assist them with the purchase of a sophisticated machine that uses the technical platform system CNC. This machine can be programmed to rapidly fabricate multiple components. The machine has an expected commercial lifespan of at least 15 years with the operating software to be updated every three years. The software and upgrades are included in the purchase price of $800,000 inclusive of GST.The client has sufficient funds to cover the cost of the installation of the machine.The clients are considering an asset lease to finance the machine.Theyhave asked if it is possible to have the asset lease facility for a seven-year term with a residual of 15%.

• Their business employs five people and, with the expected increase in business through the automation of production, they have forecast that they will need to recruit an additional two staff members in the next 3–6 months to meet sales/production demands.
• Ray has been in the metal fabrication field all his working life. He has an MBA and understands financial management. He also has solid engineering skills and developed the majority of the design works for the business. He is divorced and has no dependants. Steve is married and his wife is a school teacher and she will be retiring at the end of the year.
• Steve worked with Ray at ‘Protech’ as a foreman. His skills are in production and managing project/job flow. He has high level technical skills and can complete works to specification at a high standard.
• Steve and Ray have provided the last two years financial statements for the trading business.
• Applicant information
• Client Ray Murdoch Steve Brown
• Current address Unit 43, 25 High St Northville, <Your State>and has lived there for six years 23 Desmond Lane Northville, <Your State> and has lived there with wife Kate for seven years. They own the property jointly.
• Home phone 9001 2121 9002 1212
• Status Ray is divorced with no dependants Steve is married with no dependants
• Employment Self-employed business owner Self-employed business owner
• Income $100,000 per annum $100,000per annum
• Property value $750,000 $900,000
• Owned jointly with wife Kate
• Cash at bank $12,500 $9,600
• Contents $100,000 $85,000
• Superannuation $250,000 Steve $350,000, Kate $60,000
• Motor vehicle $40,000 $55,000
• Home loan $250,000 repayments $2,068p.m.,P & I, 18 years remaining $350,000 repayments $2,645 p.m.,P & I, 22 years remaining
• Credit card $25,000 limit with debt of $15,000, monthly payment calculated @3% of limit $10,000 limit with debt of $3,000, monthly payment calculated @3% of limit
• Car loan $0 $15,000 repayment $746p.m., remaining term 4 years
• Monthly living expenses $3,700 $4,150
• The business
• Year 20X1 Year 20X2
• Net Profit After Tax (NPAT) $200,000 $220,000
• Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA) $310,000 $340,000
• Wages to Director 1 $100,000 $100,000
• Wages to Director 2 $100,000 $100,000
• ABN: 64-123-123-123 Business name: Pallets-R-Us Pty Ltd Key balance sheet items
• Cash $125,000
• Trade Debtors $220,000
• Trade Creditors $100,000
• Notes The business currently meets all creditor payments at 30-day terms.
• Debtor collection has been solid. They invoice an upfront payment of 50% of the sale price, which assists in funding their production.
• They have orders of $1m over the next 3 months and have made an increase in their gross profit margin.
• The orders are from several clients, so their debtors will be well spread.
• Task 1a — Identify the clients’ complex broking needs
• Prepare a list of questions that you would need to ask Ray and Steve about their history, experience, business performance and the intended equipment purchase.
• In preparing your list of questions you should ensure that you cover the following:
• •the complex features inpurchasing this equipment and benefits that will come to the company from thispurchase
• •the identification of potential risks in such a transaction and Ray’s and Steve’s tolerance of risk
• •the financial aspects of the transaction and current financial position of the business.
• (800 words)
• Student response to Task 1a
• Assessor feedback for Task 1a — Identify the clients’ complex broking needs
• (Insert Feedback)
• Question(s) that need to be resubmitted (if required) (List question numbers)
• First submission Not yet demonstrated
• Resubmission (if required) Not applicableTask 2a —Develop complex broking options
• You are required to prepare a full report addressed to Ray and Steve outlining available loan options;the process and the risks (potential and real) of which they should be made aware.

In a suitable reportformat you should cover the following:
1.The parties to the loan? what names will be on the loan contract and form part of the security structure.
2.Outline a minimum of two (2)product options that are available to finance an equipment purchase. One of the products must be a term loan. Also outline the security structure required for both of your chosenproduct options.
3.Your recommendation of the best product option, including amount, security/collateral, term, potential interest rate and residual value (if any). State why the other product was not the best option for the client.4.Name three (3) lenders that offerthe productsrequired for the client’s transaction. Advise Ray and Steve about theproduct type, loan terms that are available, interest rate, balloon payment (if applicable) and monthly repayments.
5.List the documentation Ray and Steve need to provideto obtain funding of the machine.
6.The client responsibilities, so Steve and Ray fully understand the facility being proposed.
7.Outline the risks (potential and real) of which Ray and Steve should be made aware.
8.Whether apersonal guarantee will be required from the Directors and/or the director’sspouse.
9.Asummary of all fees and charges — including those for setup and those of the lender.
10.The clients enquired about claiming back the GST that is included in the purchase price of the machine. In accordance with your qualification as a mortgage broker, provideadviseto the clients regarding their question.11.Advise which relevant disclosures must be made.
12.A request for the client to inform you of any questions about the transaction and/or provide an instruction to proceed.
(800 words)
Notes:Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
You are to write a report to your clients,demonstrating your professional writing skills —not simply commenting on each of the points detailed above.
The use of tables in the report, to set out some of the numeric information, may be of benefit.
Student response to Task 2a

 

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