Lending

Introduction

It’s important to understand the difference between consumer and commercial lending to ensure the customer is provided with suitable finance options that suit their purpose. 

Inquiries must be made as to the purpose for which each customer will use the asset they wish to purchase. If you have any doubts as to whether the loan is to be used wholly or predominantly for business use, you must use the Consumer Loan offered by us (Macquarie Leasing).

Banking Code of Practice

Since 2019, we’ve adopted the Australian Banking Association’s Banking Code of Practice (the Code). The Code outlines standards of practice and service that protect the safety and trust of individual customers, small business customers and their guarantors.

Taking extra care with clients experiencing vulnerability

Customers may experience a range of circumstances that require extra care and a more sensitive approach in dealing with their situation over the life of their loan.

If a customer discloses they are experiencing vulnerability, or you identify a situation that may require extra care and a more sensitive approach at any point in time throughout the life of a customer’s loan (this includes initial engagement prior to the client entering the loan), immediately refer them to us and we’ll carefully assess their circumstances and respond with appropriate assistance.

Commercial finance

For individual applicants who’d like to finance an asset under a commercial finance contract, inquiries must be made to determine whether the assets are sought wholly or predominantly for business use. This can’t be satisfied solely by the applicant signing a business use declaration.

Depending on the applicant, the following may be required to determine business use:

  • written confirmation from an accountant/employer (other than the client) confirming that the motor vehicle will be used wholly or predominantly for business or
  • tax return in the last 18 months or payslips itemising car expenses.

A business declaration is required for all commercial finance applications for individual applicants financing motor vehicles. This is available as part of the contract documents.

Commercial express checklist

We recommend reading the below checklist to ensure you know what criteria we’re looking at when processing a commercial express application. 

Providing complete and accurate credit information when submitting a commercial loan application can reduce turnaround times, increase efficiency and lead to better outcomes for your customers.  

If the below criteria aren’t met, a full assessment will be required.

We’ll reach out to you if we require further information during our assessment.  

 

Customer eligibility

New and existing customer ABN/GST registration requirements 

 For motor vehicles - Minimum 1 year

 For all other assets - Minimum 2 years

Property ownership

 Must be in the applicant/guarantor’s name
   

Asset eligibility

Maximum net amount financed within a 6 month period of the settlement date (or approval date if not settled) 

  $100,000

$200,000 (Existing customer with a current account that’s active for a minimum of 24 months)

 Max exposure - $500,000

 LVR - 130% max LVR (Private Sales 100%)

 Motor vehicles - Cars, utilities and vans, small and medium trucks, trailers, car (taxis), car (hire and travellers)

Lifestyle Assets - Motorcycles and scooter, caravan and campervans, motorhomes

Plant and equipment – earthmoving and material handling assets - Bulldozers, loaders and ski steers, crushing equipment, drilling equipment, dumpers, excavators, graders, rollers, screening equipment, forklifts, telescope handlers, boom lifts and scissor lifts, access equipment, aerial and elevated work platforms, container lifts, cranes (light up to 15 tons). 

Asset Age - 12 years end of term (for assets between 12-15 years end of term please contact us)

Sale Type - Dealer & private sales

 

Credit reference

To avoid delays, a Statement of Account is our preferred form of credit reference. Where a statement can’t be supplied, we can conduct a verbal credit reference (only on asset finance or business loans).

Verbal Credit Reference Requirements:

Must be in the name of the borrower

Open or paid out account within the last six months

The repayment amount for the current application can be up to or equal to the provided credit reference monthly repayment

Six months of good conduct

Applicants who have received JobKeeper or debt relief in the last six months are not eligible under our streamlined assessment (ie full assessment required).

Home Loan Credit Reference:

If neither of the above can be provided, a home loan reference can be used if: 

You are a sole trader, sole director or spousal directorship company/partnership 

The business has no current or recently finalised asset or business loans 

The director/applicant on the proposed loan has a current owner-occupied mortgage 

Six continuous months of statements are provided upfront at submission

Not meeting any of the above criteria means that full financial assessment is required

 

Credit file

 Satisfactory/clear credit file with no adverse listings

Commercial full assessment checklist

The following checklist includes important information about the qualifying criteria for a commercial approval. Providing complete and accurate credit information when submitting a full assessment application can reduce turnaround times, increase efficiency and lead to better Customer outcomes.

We’ll reach out to you if we require further information during our assessment.  

Customer eligibility

ABN/GST registration requirements - Minimum 12 months

PAYG applicants (individual non-ABN holder) - PAYG applicants in full time employment with a car allowance or letter from accountant/employer verifying business use of the vehicle

Asset eligibility

Max NAF - $10,000 - $1,000,000

LVR - 130% max LVR (Private Sales 100%)

Motor vehicles - Cars, utilities and vans, small and medium trucks, trailers, car (taxis), car (hire and travellers)

Lifestyle assets - Motorcycles and scooters, caravans and campervans, motorhome 

Plant and equipment – earthmoving and material handling assets - Bulldozers, loaders and ski steers, crushing equipment, drilling equipment, dumpers, excavators, graders, rollers, screening equipment, forklifts, telescope handlers, boom lifts and scissor lifts, access equipment, aerial and elevated work platforms, container lifts, cranes (light up to 15 tons)

Asset Age - 12 years end of term (for assets between 12-15 years end of term, please contact us)

Sale Type - Dealer, Private Sales, Sale and Buy Back

Supporting documentation

Individual Applicants

Copy of valid Australian driver licence

Sole Trader, Partnership, Company Incorporated Entity, Trust, PAYG applicants (Individual non-ABN holder)

Where the most recent financial year end is greater than 6 months old we require:

Latest full year of:

accountant-prepared financial statements (including profit and loss and balance sheet), OR

finalised tax returns (including NOAs for sole traders) 

And one of the following additional documents:

management/accountant prepared interim financial statements (including profit and loss and balance sheet) no more than 90 days old OR

most recent quarterly BAS statement, required from 60 days post quarter end OR

written confirmation from the accountant that the current year turnover and profit is in line with prior year.

Please note, latest full year financials are required from 1st January. 

Where the most recent financial year end is less than six months old, we will accept:

Last two full years of:

accountant-prepared financial statements (including profit and loss and balance sheet) OR

finalised tax returns (including NOAs for sole trades)

Balloon refinance and replacement policy checklist

We recommend reading the below checklist to ensure you know what criteria we’re looking at when qualifying a refinance or replacement approval.  

Providing complete and accurate credit information when submitting a refinance/replacement application can reduce turnaround times, increase efficiency and lead to better customer outcomes. 

Each criteria should be met otherwise the policy is not applicable and a full assessment is required.

We’ll reach out to you if we require further information during our assessment.  

Customer eligibility

New customer

 Property ownership required and must be in the applicant/guarantor’s name


Existing customer

 No property ownership requirements

Asset eligibility

Maximum net amount financed - $200,000

LVR - 130% max LVR (Private Sales 100%)

Motor vehicles - Cars, utilities and vans, small and medium trucks, trailers, car (taxis), car (hire and travellers)

Lifestyle assets - Motorcycles and scooters, caravans and campervans, motorhome 

Plant and equipment – earthmoving and material handling assets - Bulldozers, loaders and ski steers, crushing equipment, drilling equipment, dumpers, excavators, graders, rollers, screening equipment, forklifts, telescope handlers, boom lifts and scissor lifts, access equipment, aerial and elevated work platforms, container lifts, cranes (light up to 15 tons). 

Asset Age - 12 years end of term (for assets between 12-15 years end of term please contact us)

Credit reference

Credit Reference Requirements:

Must be in the name of the borrower

Open or paid out account within the last six months

New customer replacing an open/recently paid out account with another financier 

The repayment amount for the current application can be up to or equal to the original monthly repayment (for the contract being replaced)

eg If the original monthly repayment (for the contract being replaced) is $500 per month, the repayment amount for the current application can be any amount up to $500 per month.

To avoid delays, a Statement of Account is our preferred form of credit reference. Where a statement can’t be supplied, we can conduct a verbal credit reference (only on asset finance or business loans).


Existing customer with an open/recently paid out account 

The repayment amount for the current application can be up to two times the original monthly repayment (for the contract being replaced)

eg If the original monthly repayment (for the contract being replaced) is $500 per month, the repayment amount for the current application can be any amount up to $1000 per month

Balloon guidelines

The balloon values below are guidelines only. Factors to take into consideration when determining the most appropriate balloon include:

  • effective life of the asset
  • kilometres to be driven (if a vehicle)
  • proposed usage (heavy or light)
  • predicted value at maturity, and
  • appropriateness for the customer.

Final balloon payments may be scheduled into the loan only where it’s suitable for the customer and is consistent with their requirements and objectives. Only customers assessed by us as appropriately credit-worthy will be approved for final balloon payments in accordance with these guidelines.

Chattel Mortgage
Term All Asset Types

12 - 36 months

50%

37 - 48 months

45%

49 - 60 months

35%

Novated Lease RV ranges
Term Residual Value
(% of RRP)
High Kilometres
(% of RRP)

12 months

60% - 66%

50% - 59%

24 months

50% - 57%

40% - 49%

36 months

45% - 50%

30% - 44%

48 months

35% - 45%

20% - 34%

60 months

25% - 35%

15% - 24%

*The high kilometre rate applies to vehicles that travel more than 30,000 kilometres each year

Asset inspections

Asset inspections are required in the following situations:

  • private sale and lease back transactions for all assets
  • equipment where amount financed is greater than $200,000.

This inspection will verify the asset details only. It doesn’t constitute a mechanical inspection.

Process

All assets inspections must be performed by an inspection provider approved by us.

Currently the approved providers are Verimoto, Redbook Inspect and Pickles.

We recommend contacting the vendor to prepare the registration papers and driver’s license for inspection.

Consumer finance

When submitting consumer loan applications:

  • you mustn’t make any suggestions to your customer that their application has or will be approved until it’s been approved by our Credit Team
  • you must make every effort to understand the customer's individual income, assets, expense and liability situation and to ensure that it’s reflected in the information when submitting the application. You must seek and take all reasonable steps to obtain information in the application process
  • you must only enter information that you believe to be true and correct and not misleading
  • you must ensure that any information you provide to customers about our products is correct and reflects the most recent details that have been provided to you by us. If in doubt, please refer to your BDM
  • you must ask the customer if there are any features or flexibility that they're seeking under their desired finance contract and clearly record details of the features/flexibility sought by the customer in the application.

Consumer loan checklist

We recommend reading the below checklist to ensure you know what criteria we’re looking at when processing your customer’s loan application. 

Providing complete and accurate credit information when submitting a consumer loan application can reduce turnaround times, increase efficiency and lead to better outcomes for your customers.  

We’ll reach out to you if we require further information during our assessment.  

Customer eligibility

Applicant Type - Individual, individual with supporting spousal income and joint borrowers 

Applicant Age - You must be 18 years or older.

Applicant Age - If you’re greater than 65 years or considering retirement, ensure foreseeable changes regarding retirement are discussed and acknowledged in the application

Asset eligibility

Net amount financed -  $10,000 to $1,000,000

 Term - 12 months to 84 months

 Asset Age - 12 years end of term (for assets between 12-15 years end of term please contact us)

 Motor vehicles - Cars, utilities and vans reasonable living expenses relative to HEM based on income, marital status and dependents

Lifestyle Assets - Motorcycles and scooter, caravan and campervans, motorhomes

Sale Type - Dealer sales, private sales, refinances

Supporting Documentation

All Applicants

Copy of a valid Australian driver licence (front & back)

PAYG applicants

One payslip no older than 1 month (from the date received)

If applying between July and September each year, please provide two payslips, where the second payslip must be the last from the prior financial year

If casually employed and the payslip has the pay period end date between 1 July and 31 December, previous PAYG summary/tax ready income statement or last available payslip from previous tax year is also required

Minimum of 6 months casual employment

Self employed

Where the most recent financial year end is greater than 6 months old we require:

Latest full year of:

accountant-prepared financial statements (including profit and loss and balance sheet), OR

finalised tax returns (including NOAs for sole traders) 

And one of the following additional documents:

management/accountant prepared interim financial statements (including profit and loss and balance sheet) no more than 90 days old OR

most recent quarterly BAS statement, required from 60 days post quarter end OR

written confirmation from the accountant that the current year turnover and profit is in line with prior year.

Please note, latest full year financials are required from 1st January. 

Where the most recent financial year end is less than six months old, we will accept:

Last two full years of:

accountant-prepared financial statements (including profit and loss and balance sheet) OR

finalised tax returns (including NOAs for sole trades)

 

Consumer ACD checklist

We recommend reading the below checklist to ensure you know what criteria we’re looking at when processing your customer’s loan application. 

Providing complete and accurate credit information when submitting a consumer loan application can reduce turnaround times, increase efficiency and lead to better outcomes for your customers.  

We’ll reach out to you if we require further information during our assessment.  

Applicants

full name (first, middle, and surname) and contact details provided 

DOB and driver licence entered accurately

permanently employed > 3 months; or casually employed > 6 months

PAYG income along with other income is declared accurately (as this will be verified)

total household income and expenses declared where applicable (please utilise our serviceability calculator for a more accurate results. This can be found on our Introducer Toolkit > Tools and Resources > Helpful Tools.

Credit

no discrepancies between:

  • monthly repayments and disclosed liabilities
  • credit enquiry information and disclosed liabilities
  • credit card limits required (if not paid out in full each month, balance is required too)

 clear credit file that is more than three months old (with no payday lender enquiries)

 good payment history on previous or current Macquarie contracts where applicable

 reasonable living expenses relative to HEM based on income, marital status and dependents

capacity above the required buffer.

Asset

max LVR 130%

vehicle age less than 12 years at end of term

sold through a licensed dealer

vehicle details and Glass’s guide to be selected prior to submission (if available). 

 

Please note our current credit guidelines will apply. We’ll reach out to you if we require further information during our assessment.

 

Other quick tips

  • The most conservative income calculation figure between the monthly net YTD or net monthly amounts on the payslip(s) must be included in the application. If using the higher figure, an explanation must be included in the notes section
  • for self-employed applicants or applicants on full Centrelink income, please ensure ‘Other’ is selected on the income tab, rather than ‘PAYG’. Centrelink income is to be declared in Monthly Government Benefits income
  •  if you have an applicant currently on parental leave, select ‘Yes’ to foreseeable changes and leave notes regarding:
  • the current income level
  • whether there is any period during parental leave which is unpaid
  • when they will return to work and in what capacity and
  • the best contact for an employment reference.
The child must be disclosed as a dependent and household and living expenses must include child-related expenses. 
  • applications where an employment reference may be conducted include, but are not limited to:
  • recently starting a new job
  • confirming a higher income
  • inconsistencies evident on payslips 
  •  inconsistencies evident on payslips full name (first, middle, and surname) and contact details provided.

Learners drivers guidelines

Where applicant/s holder a Learner Driver Licence, the below criteria applies:

  • All applicant must be 18+ years of age
  • Maximum lend $30,000
  • Maximum payment to income ratio 15%
  • No high performance cars
  • Evidence of insurance must specifically permit learner driver.

Additional conditions may apply based on the age and strength of the applicant. 

Calculating serviceability

It’s important that when you're submitting a customer’s application, you make every effort to understand their individual financial situation (income, expenses, assets and liabilities). 

Determining a customer’s serviceability forms part of the application submission process. Use the Expense Guide to assist you with your conversation and making further enquiries.

For credit assessment, income scaled Household Expenditure Measure (HEM) is used.

Important considerations to take into account as part of determining serviceability:

  • all sources of household expense and liability must be declared
  • any future changes to the applicants’ living situation, e.g. retirement, expecting a child or buying a new home
  • whether spousal income is required to support serviceability.

Spousal income

For sole applicants who are married or in a de facto relationship, spousal income may be considered subject to the criteria below:

  • must be an acceptable source of verifiable income
  • the spouse is employed on a permanent full-time or part-time basis or casual with a minimum six months YTD income
  • spousal income will be capped at the level of the applicant's income
  • spouse’s address must be the same address as the applicants.

Residential status

Rent

Where an applicant/s is renting, and where the rental amount declared is low, and the applicant has limited surplus capacity, we may make further inquiries.

This could include requesting rental receipt or bank statement to verify the amount entered.

Boarding

Boarding refers to informal living arrangements where the applicant may pay a boarding fee to live at the premises. Boarding must be selected as the residential status in the application.

Living with relatives

Living with relatives must be selected where the applicant lives for free indefinitely at either a parent’s or relative’s residence.

Property owned and mortgaged

Where the mortgage repayment amount declared is low compared to the mortgage balance declared and the applicant has limited surplus capacity, we may make further inquiries.

This could include requesting a mortgage statement or bank statement to verify the amount entered.

Property owned outright

This refers to where the applicant/s owns property and has no outstanding debt/mortgage secured by the property.

Acceptable sources of income

Income verification must be undertaken for all applicants. 

Documents or information that could be obtained for verification of income include:

Income type Primary verification document Secondary verification document
PAYG Payslip Bank statement
Casual Payslip Bank statement
Government benefits Centelink statements  
Superannuation Superannuation statement Bank statement
Property investment income Rental statement Bank statement
Other investment income Bank statement  

Please ensure that all Tax File Numbers (TFNs) are redacted on any documents received from the customer.

Government benefits

Government benefits is verified using Centrelink or Department of Veteran Affairs (DVA) income statements

Income can only be considered if it’s listed on both the “Previous regular entitlements and payments” and the “Future regular entitlements and payments” sections of the Centrelink income statement. Regular income acceptable to us includes:

  • age pensions and pension supplements
  • carer payment
  • carer allowance
  • child care rebates
  • veterans affairs pension
  • family tax benefit part A and B
  • disability support pension
  • rent assistance
  • remote area allowance
  • DVA pension

Only regular income as defined above can be considered for servicing in the application. Income derived from government benefits shouldn’t exceed 50% of the applicant(s) total net monthly income.

Where more than 50% of an applicant's verified income is Centrelink income, the following is required for further consideration:

  • the applicant has a very strong credit profile; and
  • we receive an upfront copy of a bank statement.

Investment income

Investment property income

Investment property income must be the net amount after all costs, including commissions and other agent fees, are deducted. It must be verified by a recent rental statement or bank statement (not more than two months old). Investment property expenses like mortgage, rates, strata, water and maintenance should be disclosed on the application as other expenses.

For investment property income, we'll only consider 70% of this income to be included in the serviceability calculation, however 100% of the income should be declared on the application.

Other investment income

Other investment income includes interest income which can be verified by a recent bank statement (not more than two months old).

For all investment income we’ll only consider 80% of this income to be included in the serviceability calculation, however 100% of the income should be declared on the application.

Superannuation income

Superannuation income must be verified via a superannuation (income) statement or a bank statement.

Unacceptable income sources

Below are unacceptable sources of income:

  • work cover - work cover Income isn’t considered regular income and must not be included in the capacity calculation 
  • cash income - cash income (income not reflected in tax returns and otherwise unable to be verified) isn’t to be relied upon for the purposes of assessing the applicant’s financial situation
  • government benefits - Any government benefit not mentioned above
  • child support
  • foster care income.

New to job

Applicants who have started a new job within the last 90 days, or who have been employed for the first time will be required to provide

Any TWO of the following:

  • signed copy of employment contract
  • payslip
  • verbal employment reference.

 

If you’re supplying an employment contract, you’ll need to ensure the contract includes the information listed below.

  • employment term (if contracted)
  • commencement date
  • income, including any allowances or deductions
  • signed by both employee and employer.

Balloon guidelines

The balloon values below are guidelines only. Factors to take into consideration when determining the most appropriate balloon include:

  • effective life of the asset
  • kilometres to be driven (if a vehicle)
  • proposed usage (heavy or light)
  • predicted value at maturity, and
  • appropriateness for the customer.

Final balloon payments may be scheduled into the loan only where it isn’t unsuitable for the customer and is consistent with their requirements and objectives. Only customers assessed by us as appropriately credit-worthy will be approved for final balloon payments in accordance with these guidelines.

 

Term (months)

Up to

12 – 36 

40%

37 – 48

 35%
49 – 60 30%
61 – 84  0%

Document retention obligations

Know your document retention obligations

Under the National Consumer Credit Protection Act 2009, if you are an ACL holder you must keep consumer financial records for seven years. You must also keep a record of all materials that form your assessments of credit contracts as 'not unsuitable'.

You should familiarise yourself with the relevant legislation with respect to document retention and proper backup procedures.

Asset inspections

Asset inspections are required in the following situations:

  • Private sale and lease back transactions

This inspection will verify the asset details only. It doesn’t constitute a mechanical inspection.

If you're relying on Point of Sale (POS) exemption, private sale and refinance transactions aren’t  available for consumer loans.

Process

All assets inspections must be performed by an  inspection provider approved by us. Currently the approved providers are Verimoto, Redbook Inspect and Pickles. We recommend contacting the vendor in regards to preparing the registration papers and driver’s license for inspection.

Additional information

This information is provided by Macquarie Leasing Pty Limited ABN 38 002 674 982 Australian Credit Licence 394925 (Macquarie Leasing) for use by accredited introducers only. It contains a general description of Macquarie Leasing’s credit policy. Macquarie Leasing reserves its right to approve applications on such conditions as it may see fit in its sole discretion and may alter the information and requirements in this document at any time without notice. All applications to Macquarie Leasing are also subject to duly executed satisfactory transaction documents, approval conditions and normal settlement criteria. No part of this document is to be construed as an offer by anyone capable of acceptance or as a solicitation to obtain a financial product.

Macquarie Leasing recommends that you and/or your clients review the relevant documentation and form your own opinion or seek independent advice as to the financial, accounting and tax consequences of entering into any of Macquarie Leasing products.