Monat: Dezember 2016

Finance and lease for all types of equipment, new and used, are offered for sale with special pricing by dealerships and auction houses through out the United States.

Some dealerships have partnered with local and/or regional banks to move these off lease used equipment listings with special dealer financing being offered.

Cash buyers have the best opportunity to acquire available new and used equipment listings for the lowest price.

Additionally, repossessed used equipment listings are spread out across the United States enabling all prospective customers to participate in these specials…

Banks and all other lenders are holding repossessed used equipment listings in their repo and off lease inventories. They must move these repossessions due to the factor it is impairing their cash flow and working capital. These deals are listed with auction houses, liquidators, banks and participating brokers. Additionally, these repossessed properties are offered in truck paper and commercial trader.

Furthermore, new and used equipment tems are offered by asset management groups include construction equipment, photographic and printing equipment, restaurant equipment, machine tools, maintenance equipment, surveillance equipment, telephone, communication equipment, medical equipment and computer systems.

If you have good credit, conventional financing and leasing can be arranged for all types of equipment acquistions. If your credit isn’t stellar, we have specials off lease and repo finance programs descibed below….

Off lease and equipment repos are also available for the customer without good credit. Qualifying credit scores can start as low as 550..Additionally, down payments on special dealer lease financing can be low as a couple of thousand dollars down…Both finance and lease programs welcome start up business to apply for the lending programs.

Happy hunting for your equipment acquistion and its related financing and leasing programs.  

Immobilienmakler Heidelberg

Makler Heidelberg

Introduction

Accounting is as old as the hills and money, however with the changing times its role has also been changing. Such a change can be attributed to the changing business patters, social, economical and technological developments. From being an art of recording, accounting has come to be known as a „process of identifying, measuring, and communicating economic information.“

A key skill that a business manager must learn is basic accounting. Understanding accounting will give you a better understanding of how your organization works. This has many benefits as it gives you greater control and confidence over your business budget and your own density. As we say money makes the world go sound and accounting ensures that business and commerce to happen. Accounting is necessary to track all the different financial transactions that happen with in the organization whether it is a small shop or a fortune 500 company. The transactions can be formalized into financial reports for analysis.

If you are working in a business organization as a senior manager, you need to know about the basic finance and accounting. You may not be directly involved in that but understanding the fundamentals of finance and accounting will help you perform better in your decision making functions. Finance and accounting are important functions which are related to all other areas of management because every activity in an organization needs money. Finance and accounting play a vital role in the various processes of management like strategy formulation, planning, decision making, and control. Similarly, all functional areas of management such as marketing, manufacturing, personal, research and development have to do with the finance.

You have to know how to differentiate between finance and accounting, understanding basics of accounting such as debits, credits, and double entry bookkeeping, be able to analyze basic financial documents like income statements and balance sheets, use financial tools to manage performance more effectively, decide how assets, liabilities, and equity affect your area of operation. Besides, you can apply financial risk and return principles to managerial decision making, justify your requests for new equipment and other capital investments, improve your budgeting skills, and relate your department’s financial performance to the bigger picture. You have to know how to address and communicate financial and strategic problems more effectively, how to identify relevant financial information, and how to apply the financial analytical skills needed to make more informed business decisions.

Most managers have limited accounting backgrounds, their back grounds are usually in Marketing, Engineering, Law, Human Resource and other fields. Business managers are very busy people with little time to spare. Accounting provides a frame work that monitors and controls the financial health of an organization. Through accounting methods and reporting management can make decisions on whether there is potential to expand or cut back. Accounting can also provide financial reports that can be used by top management and shareholders to determine the profitability and worth of an organization. This can be determined by analyzing the company’s assets and liabilities.

Assets

Assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered as an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset). Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property.

Assets are divided into the following categories:

Current assets

Current assets represent assets that can be converted into cash quickly. These type of assts can also be referred to as liquid assets. Typical current assets include cash, cash equivalents, short-term investments, accounts receivable, inventory and the portion of prepaid liabilities which will be paid within a year.

Fixed assets

Fixed assets, also known as a non-current asset or as property, plant, and equipment (PP&E) are a term used in accounitng for assets and property which cannot easily be converted into cash.

Liabilities

A liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Liabilities are reported on a balance sheet and are usually divided into two categories:

Current liabilities 

These liabilities are reasonably expected to be liquidated within a year. They usually include payables such as wages, accounts, taxes, and accounts payables, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations and others.

Long-term liabilities

 These liabilities are reasonably expected not to be liquidated within a year. They usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties.

Profit

Profit (also called net income or earnings) can be defined as the amount a business earns after subtracting all expenses necessary for its sales. To put it in a equation form

Profit = sales – expenditure

Capital profit

These are profits which are concerned from the sale of fixed assets or the properties of the business organization. For example, if machinery purchased for Rs. 40000 is sold for Rs 45000, then the amount of Rs5000 will be considered as capital profit. Similarly the money received on the issue of shares at a premium shall be considered as capital profit.

Revenue profit

These are profits which are earned during the course of normal business operations are known as revenue profits. For example, if a stock costing Rs.50000 is sold for    Rs.75000, then the entire amount of Rs.75000 will be treated as revenue receipts, but Rs.25000 will be the revenue profit. Revenue profits are always available for distribution as dividends amongst the shareholders.

Loss

Loss is a notional expenditure, i.e., expenditure without any benefit to the organization or entity.

Capital loss

These are losses which are not related with the normal business operations i.e., these have not been incurred due to normal course of the business.

Revenue loss

These are losses which are incurred in the normal course of the business operations, i.e., these have been incurred during the normal conduct of the business.

Income

Income is the sum of all the wages, salaries, profits, interests‘ payments, rents and other forms of earnings received in a given period of time. For firms, income generally refers to net-profit. Income means an excess of revenue over expenses for an accounting period.

Operating Profit

Operating profit means the profit earned from a firm’s normal core business operations. This value does not include any profit earned from the firm’s investments (such as earnings from firms in which the company has partial interest) and the effects of interest and taxes.it is also known as „earnings before interest and tax“ (EBIT) or operating income.

Non-operating Profit

Non-operating income, in accounting and finance, represents gains or losses from sources not related to the typical activities of the business or organization. Non-operating income can include gains or losses from investments, property or asset sales, currency exchange, and other atypical gains or losses. Non-operating income is generally not recurring and is therefore usually excluded or considered separately when evaluating performance over a period of time

Expenditure

Payment of cash or cash-equivalent for goods or services, or a charge against available funds in settlement of an obligation as evidenced by an invoice, receipt, voucher, or other such document.

Working Capital

Working capital is a measure of both a company’s efficiency and its short-term financial health. The working capital ratio is calculated as:

Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory). It is also known as „net working capital“.

Conclusion

If you are in or getting ready for a management position… if you must prepare, interpret or approve budgets, financial reports or business plans… if you want to be able to better understand and communicate the financial results and performance of your organization… then you must know the  basics of accounting.

More than ever before, today’s managers are required to understand and speak the language of finance and accounting in order to achieve their goals, objectives and bottom line results. For that you must learn the practical financial concepts and skills that will help you make better management decisions. Accounting information will be always useful as a guide for making business decisions.

Immobilienmakler Heidelberg

Makler Heidelberg

Finance is the Life Blood of the Business and so the case of MNCs also. The only difference in finance of domestic companies and MNCs is that the finance in domestic companies is in domestic currency where as in case of the MNCs the finance is in multi currencies. But whatever be the conditions, with out finance, no company can exist. Finance is required for many purposes like purchase of raw material, purchase of machinery, purchases of the related items, payment of salaries, meeting the operational expenses, etc., so the finance is required for all these purposes. To know about the activities of multinational firms will help for finance assignments.  The activities of providing finance to the MNCs are known as Financing MNCs. Short – Term Financing is financing the working capital requirements of multinational companies‘ foreign affiliate’s poses a complex decision problem.

This complexity stems from the large number of financing options available to the subsidiary of an MNC. Subsidiaries have access to funds from sister affiliates and the parent, as well as external sources. The following are the financing which is long term particularly for the capital equipments and other big items given to the MNCs who are actively engaged in the Foreign Trade. 1. Export Financing 2.Export Credit Subsidies and 3.Export Credit Insurance.  Items that need long repayment arrangements, most government of developed countries have attempted to provide their domestic exporters with competitive edge in the form low-cost export financing and concessionary rates on political and economic risk insurance. Nearly every development nation has its own export-import agency for trade financing and development.

Raising of funds on favourable terms is an important aspect of financial management.  This also holds good for procurement of funds in the international market, in any currency.  Multinational funds may be raised either through internal or external sources.  Internal funds comprise share capital, loans from patent company, and retained earnings.  Funds from external sources can be raised from:

Commercial Banks – Commercial Banks all over the world provide foreign currency loans for international operations as they do for domestic operations.  These banks also provided facility to overdraw, over and above the loan amount.

Discounting of Trade Bills – This method is used as a short-term financing method.  It is widely used in Europe and Asia to finance both domestic and international trade. 

Euro-currency Market – When the currency is deposited outside the country of origin.  It is termed as Eurocurrency. 

Euro-bond Markets – Like euro-currency market, euro-bond market has emerged as another significant source of capital.  Euro-bonds are also primarily sold in countries other than that of the country in whose currency the bond is denominated.  Thus, bonds denominated in yen but sold in US, Britain etc., are known as euro-bonds.

Development Banks – Many countries have development banks which offer long and medium-term loans.  Many agencies at the national level offer incentives for firms to invest within their country or to finance exports. 

International Agencies – Many international agencies have come into being for financing specific category of projects. 

Immobilienmakler Heidelberg

Makler Heidelberg

When you are starting out in business you will probably require a van or a basic requirement for any business to have the right way of transport to reach & service their clients. However in this current liquidity crunch it can be really tough to get the finance you need to buy your business vehicle.

With the liquidity crisis & economic slowdown in the United Kingdom now hasn’t ever been a better time to get a new or used wagon.

Smart self employed people & small businesses will milk the liquidity crunch and buy their lorry or commercial car now using assured lorry finance.

Hire Purchase / truck finance is the most well liked of all finance packages available. It offers wonderful affordability and is easy to apply for without reference to a folks current credit status.

– Possession at the end of the agreed term – Once the contract has stopped, you can sell the car and keep one hundred pc of the proceeds from the sale.

– Debatable Deposit – Flexibility on the amount put down as a deposit. The bigger your deposit, the lower your monthly payments.

– Entitlement to writing down allowances – Can mean that you pay less to the taxman* by writing off some or all of your automobile finance payments against your tax bill.

– The finance is secured on the auto – in most cases there is no need to provide further security. Your finance is on the vehicle.

You know precisely what you have to pay and when, allowing you to plan ahead and stay in control of your finances

In today’s financial climate you need a commercial car finance company that can offer you finance for any credit history, same day choices, low rates & main dealership standard vehicles.

This includes financing of vans, light wagons, and even buy a minibus. You can even finance a used or a new vehicle also. There are certain conditions though which are sometimes applied before to finance for a vehicle. The model and year of the auto along with the price of the vehicle are regarded as to determine affordability. The vehicle finance is formed available at varied cheap rates by different financing companies.

Based on the corroboration, the lorry finance company takes a call if how much money should be granted to you. Later, you get a confirmation regarding your suitability for car finance.

The interest rate for vehicle for car finance varies with your circumstances and with the lending organization you choose to give you with Van Finance.

A borrower with either a good credit score or a subprime credit history is able to make an application for commercial vehicle finance.

Immobilienmakler Heidelberg

Makler Heidelberg

A business seeking capital can’t afford to underestimate the importance of business financial projections. A business financial projection is simply forecasting your sales and revenue to the lender. This information is important because it is a key indicator to your ability to repay a loan.

If you are unsure about financial forecasting and how it relates to your business it is best to hire someone who does know. Most lenders will want to see a three or five year projection. There are 14 different items to include and fully support in your financial projections. With these different items it is best to give a month-by-month breakdown for the first year, a quarterly breakdown for the next two years, and an annual breakdown for the final two years you are projecting.

The different items to include in your projections are; sales revenue estimates, administrative costs, production costs, sales costs, capital expenditures, gross margin by product line, sales increase by product line, interest rates on debts, income tax rate, accounts receivable collection plan, accounts payable schedule, inventory turnover, depreciation schedules, and the usefulness or depreciation of assets.

The income projection enables the owner/manager to develop a preview of the amount of income generated each month and for the business year, based on industry supportable predictions of monthly levels of sales, costs, and expenses. When determining the total net sales you will be finding out how many units of products and services you expect to sell at the prices you are projecting. Make sure to think of what returns, allowances, and markdowns can be expected. The sales costs needs to be calculated for all products and services used. Ensure that when determining the costs of sale that you don’t forget anything such as commission paid to sales representatives, transportation costs, or any direct labor costs.

For the gross profit you would subtract the total cost of sale from the total net sales. To get your gross profit margin you will divide the gross profits from the total net sales. This will be expressed as a percentage of total sales or revenues.

When formulating your business financial projections there are five items that will ruin the accuracy of your projections, and hurt your chances of being approved for business financing. The first one is wishful thinking or being over-optimistic about your sales potential. Ask yourself: „Is it possible to achieve the sales levels you’re forecasting?“. A good example is that a sales team can only visit a certain number of customers each week or a factory can only manufacture a given amount of products on each shift. Make sure to keep your projections realistic and even more important to be based on supportable evidence. It is imperative to also make sure that your sales assumptions are linked directly to your sales forecast or your information will contradict itself. Most lenders are „by the numbers“, so if your numbers don’t add up, you will get declined. A good example of this is to say that you expect increased sales in a market that is declining. That just does not add up.

Another thing not to do when projecting your business finances is to spend a lot of time refining the forecast. Try to avoid tinkering with the target numbers once they are set. Many business owners neglect to ask the opinions of the sales people who know the buyer’s intentions about what they think the projected sales should be. It is important to make sure your sales team agrees on any sales targets that will be set. One other fatal mistake made by business owners when working on financial projections is not getting feedback on the projections from an accountant.

Immobilienmakler Heidelberg

Makler Heidelberg

Finance for real estate is now easily available in India. The property boom is not restricted to the national capital region but it has even transcended to satellite towns and remote semi-urban areas in and around the national capital. The number of transactions in the real estate sector has increased a number of times, making it profitable for the banks and other lending institutions to offer more finance opportunities to the buyers.

In India, the most of the borrowers in home loan segment fall in the first time buyer category. It means that they are either tenants or living with their parents in their ancestral house. As the salaried-class is spreading and emerging stronger than ever, more and more people are becoming capable of buying house. Their need to get finance from banks is being taken care of by all the major players in the market. Banks like ICICI, Standard Chartered, HDFC and all the nationalized banks are offering home loans at attractive rates.

The procedure for taking a home loan is rather easy. You can directly approach the bank or call for a meeting to be arranged with the bank’s loan executive. This can also be done over the Internet. The banks may ask for various proofs like those related to your residence, income, spouse’s income, number of dependants, etc. Based on a number of parameters, the banks arrive at your credit rating and offer you varying amount of loans.

Home loans in India come in various forms inviting fixed interest rate or floating interest rates. There are hybrid loans also that are a middle path between fixed and floating options. The borrower can put a part of his loan amount under fixed rate and expose the other part to the floating rates that depend on market conditions and the interventions by the Reserve Bank of India.

The Internet as a medium of loan arrangement is fast catching up in India. Many websites are coming up that take care of individual and corporate finance for various purposes like buying real estate, investments, business operations, etc. This medium of finance is growing rapidly although it is surely in its nascent age as far as the Indian market is concerned.

Immobilienmakler Heidelberg

Makler Heidelberg

Problems and Difficulties in Capital Budgeting

*Dr.P.Shanmukha Rao  **Dr.N.V.S.Suryanarayana

 Capital Budgeting may also be defined as „The decision making process by which a firm evaluates the purchase of major fixed assets. It involves firm’s decision to invest its current funds for addition, disposition, modification and replacement of fixed assets.

„Capital budgeting is concerned with allocation of the firm’s scarce financial resources among the available market opportunities. The consideration of investment opportunities involves the comparison of the expected future streams of earnings from a project with immediate and subsequent streams of expenditure for it“. The problems in capital budgeting decisions may be as follows:

a)     Future uncertainty: Capital budgeting decisions involve long term commitments. However there is lot of uncertainty in the long term. The uncertainty may be with reference to cost of the project, future expected returns, future competition, legal provisions, political situation etc.

b)    Time Element: The implications of a Capital Budgeting decision are scattered over a long period. The cost and the benefits of a decision may occur at different points of time. The cost of a project is incurred immediately.  However, the investment is recovered over a number of years. The future benefits have to be adjusted to make them comparable with the cost. Longer the time period involved, greater would be the uncertainty.

c)     Difficulty in Quantification of impact: The finance manager may face difficulties in measuring the cost and benefits of projects in quantitative terms. For example, the new products proposed to be launched by a firm may result in increase or decrease in sales of other product proposed to be launched by a firm may result in increase or decrease in sales of other products already being sold by the same firm. It is very difficult to ascertain the extent of impact as the sales of other products may also be influenced by factors other than the launch of the new products.

Assumptions in capital budgeting:

The capital budgeting decision process is a multi-faced and analytical process. A number of assumptions are required to be made. These assumptions constitute a general set of conditions within which the financial aspects of different proposals are to be evaluated. Some of these assumptions are:

1. Certainty with respect to cost and benefits: It is very difficult to estimate the cost and benefits of a proposal beyond 2-3 years in future. However, for a capital budgeting decision, It is assumed that the estimates of cost and benefits are reasonably accurate and certain.

1. Profit motive: Another assumption is that the capital budgeting decisions are taken with a primary motive of increasing the profit of the firm. No other motive or goal influences the decision of the finance manager

1. No Capital Rationing: The Capital Budgeting decisions in the present chapter assume that there is no scarcity of capital. It assumes that a proposal will be accepted or rejected on the strength of its merits alone. The proposal will not be considered in combination with other proposals to consider the maximum utilization of available funds.

The next step in the capital budgeting process is to various proposals.  The methods, which may be used for this purpose such as, pay back period method, Rate of return method, N.P.V and I.R.R etc. The project should be accepted if NPV is positive it should be clear that the acceptance rule using NPV method is to accept the investment project if its net present value is negative (NPV CASH OUTFLOW).  The positive net present value will result only if the project generates cash inflows at rate higher than the opportunity cost of capital.  A project may be accepted in NPV = 0.

The internal rate of return (IRR) method is another discounted cash flow technique, which makes account of the magnitude and timing of cash flows. Others terms used to describe the IRR Method are yield on investment, marginal efficiency of capital, rate of return over cost, time adjusted rate of internal return and so on. The concept of internal rate of return is quite simple to understand in the case of one-period projects. The IRR is calculated by interpolating the two rates. The accept project rule, using the IRR method, is to accept the project if its internal rate of return is higher than the opportunity cost of capital (r>k) note that k is also known as the required rate of return or cut-off rate. The project shall be rejected if its internal rate of return is lower than the opportunity cost of capital.

The project study is undertaken to analyze and understand the Capital Budgeting process in power sector, which gives mean exposure to practical implication of theory knowledge. To know about the company’s operations of using various Capital Budgeting techniques. To know how the company gets funds from various resources.    

The financial management is essentially concerned with the planning and   controlling of the financial resources of a firm. It expresses the procurement of funds along with their efficient use in order to maximize the firm’s benefit. The assets have two broad classification viz.,

Immobilienmakler Heidelberg

Makler Heidelberg

When looking for a position in the finance sector, it is important that you are qualified since you will be dealing with a career that requires accuracy and efficiency. The finance sector offers marketable and very lucrative careers especially if you find the right one for you and use it to your advantage. In addition, there is a wide variety of financial positions to choose from, so it greatly benefits individuals who have more strength in one sector of finance and may not be very good in another.  

The positions here always give you a choice to work independently or for a company. When starting out, it is important that you join the employed workforce so that you gain the experience and knowledge before you decide to go it alone. In this career choice, it is easy to double up or have two jobs. An accountant for example can have a nine to five job and then use the evening to work on another person’s accounts.

There are numerous financial positions in the banking sector. You could start as a bank teller straight out of college but end up in corporate finance or investment banking. The banking industry has always given individuals a chance to progress as long as they are hardworking and committed, the positions are achievable. It is also advisable that you keep growing your portfolio by taking courses since the financial field keeps growing. This will give you innovative and strategic ways of improving your way of doing things. You will also have fresh new ideas that you can contribute to the financial world.

Whatever position you decide to go for, be ready to make tough decisions, have analytical thinking and problem solving skills, and be a level headed leader.

Immobilienmakler Heidelberg

Makler Heidelberg

Having some knowledge of how to calculate finance charges is always a good thing. Most lenders, as you know, will do this for you, but it can helpful to be able to check the math yourself. It is important, however, to understand that what is presented here is a basic procedure for calculating finance charges and your lender may be using a more complicated method. There may also be other issues attached with your loan which may affect the charges.

The first thing to understand is that there are two basic parts to a loan. The first issue is called the principal. This is the amount of money that is borrowed. The lender wants to make a profit for his services (lending you the money) and this is called interest. There are many types of interest from simple to variable. This article will examine simple interest calculations.

In simple interest deals, the amount of the interest (expressed as a percentage) does not change over the life of the loan. This is often called flat rate or fixed interest.

The simple interest formula is as follows:

Interest = Principal × Rate × Time

Interest is the total amount of interest paid.

Principal is the amount lent or borrowed.

Rate is the percentage of the principal charged as interest each year.

To do your math, the rate must be expressed as a decimal, so percentages must be divided by 100. For example, if the rate is 18%, then use 18/100 or 0.18 in the formula.

Time is the time in years of the loan.

The simple interest formula is often abbreviated:

I = P R T

Simple interest math problems can be used for borrowing or for lending. The same formulas are used in both cases.

When money is borrowed, the total amount to be paid back equals the principal borrowed plus the interest charge:

Total repayments = principal + interest

Usually the money is paid back in regular installments, either monthly or weekly. To calculate the regular payment amount, you divide the total amount to be repaid by the number of months (or weeks) of the loan.

To convert the loan period, ‚T‘, from years to months, you multiply it by 12. To convert ‚T‘ to weeks, you multiply by 52, since there are 52 weeks in a year.

Here is an example problem to illustrate how this works.

Example:

A single mother purchases a used car by obtaining a simple interest loan. The car costs $1500, and the interest rate that she is being charged on the loan is 12%. The car loan is to be paid back in weekly installments over a period of 2 years. Here is how you answer these questions:

1. What is the amount of interest paid over the 2 years?

2. What is the total amount to be paid back?

3. What is the weekly payment amount?

You were given: principal: ‚P‘ = $1500, interest rate: ‚R‘ = 12% = 0.12, repayment time: ‚T‘ = 2 years.

Step 1: Find the amount of interest paid.

Interest: ‚I‘ = PRT

= 1500 × 0.12 × 2

= $360

Step 2: Find the total amount to be paid back.

Total repayments = principal + interest

= $1500 + $360

= $1860

Step 3: Calculate the weekly payment amount.

Weekly payment amount = total repayments divided by loan period, T, in weeks. In this case, $1860 divided by 104 weeks equals $17.88 per week.

Calculating simple finance charges is easy once you have done some practice with the formulas.

Immobilienmakler Heidelberg

Makler Heidelberg

Mortgage lenders in Australia rarely deal with brokers that cannot submit a high volume of successful home loan applications to them each month. For example, a particular bank or non-bank lending institution might refuse to deal with an entity that cannot close at least one million dollars worth of mortgages with them on a monthly basis.

For most mortgage brokers this may not seem like a daunting task. One million dollars worth or home loans may constitute anywhere between one and five successful applications. Most brokers would be able to close at least that much business each month and would therefore be able to do business with the particular lender.

However a problem arises when the scope of the mortgage broker business model is considered in full. Brokers are in business to offer choice to their customers. In Australia, brokers offer mortgage products to their clients from up to around thirty different lenders. It is this choice that attracts customers to brokers instead of applying directly with a lender. A problem arises when each of the thirty lenders demand that at least one million dollars worth of business is closed with them each month. This would mean that in order for the broker to maintain a business relationship with all thirty lenders, they would need to close over thirty million dollars worth of home loans each month, evenly spread between each lender. This is an impossible task for even the best mortgage broker to achieve.

Aggregators solve this problem by acting as an entity between the lenders and brokers. An aggregator will have several brokers working for them – perhaps hundreds – and will allow them to submit their home loan applications through them. The aggregator will in turn send the applications on to the lenders. This business model ensures that more than enough applications are sent to each lender each month to maintain the relationships. The final result is that each broker working for the aggregator will be able to offer home loan products from the full range of lenders.

Mortgage aggregators are often found in the form of franchisors. The franchisor can have up to several hundred franchisees working for them. The franchisees will use the brand name of the master franchise and will often receive benefits such as training and software. It should be noted that while the franchise model is popular with mortgage brokers in Australia, not all aggregators are master franchises.

Because mortgage brokers receive their income by way of commissions awarded by lenders for successful home loan applications, it follows that aggregators receive a portion of the commissions for all loan applications put through them. Brokers therefore surrender part of their commission in return for the benefit of using an aggregator. There may be additional franchise fees payable if the broker is a franchisee, although this arrangement will vary from franchise to franchise.

In all, aggregators are a necessary part of the mortgage broking industry in Australia. They allow brokers to offer their clients a wide variety of lenders and home loan products and provide an umbrella entity that can assist brokers with training and support throughout their careers.

Immobilienmakler Heidelberg

Makler Heidelberg