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.

Please refer to our Product Handbook and view Our commitment to the banking code of practice section for more information. 

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.

Streamlined commercial policies

We offer a range of streamlined approval processes for commercial applicants, featured below. Our streamlined policies allow eligible commercial clients to finance approved motor vehicle and other assets without providing financials.

Please note that none of the following policies apply to consumer loans.

Commercial express

Eligibility criteria

Applicant requirements:

  • verified property owner or 20% deposit (property must be in the applicant/guarantors name)
  • all director guarantees are required
  • satisfactory credit file on applicant and guarantors.

Asset requirements:

  • eligible assets are motor vehicles, caravans, earthmoving equipment and material handling equipment.
  • the maximum asset age at end of term must not be greater than 15 years. For applications between 12-15 years, please contact us to discuss.

Loan requirements:

  • new clients to Macquarie: Maximum net amount financed of $100,000
  • existing clients with a current account that's active for a minimum of 24 months: Maximum net amount financed of $200,000.

Other requirements

  • standard rates, terms and residuals/balloons to apply
  • no negative equity to be financed
  • total Macquarie Leasing client exposure to applicant/guarantors (including this application) is $500,000 or less.

For passenger vehicles and light commercial vehicles:

  • ABN holder and GST registered for a minimum of 12 months.

For all other assets:

  • ABN holder and GST registered for a minimum of 24 months.

Existing clients seeking amount financed in excess of $100,000 (up to $200,000):

  • ABN holder and GST registered for a minimum of 24 months.

Credit reference

A satisfactory credit reference will be required.

Provide either:

  • statement of account (not required for existing Macquarie Leasing contracts) or
  • financier details for use to obtain a verbal credit reference.

For more information, refer to Credit References, below.

Balloon refinancing

No financials required for commercial clients refinancing selected assets with an expiring balloon/residual or a current asset finance contract with less than 12 months remaining.

Applicant requirements:

  • all director guarantees are required
  • satisfactory credit file on applicant and guarantors.

Loan requirements:

  • maximum net amount financed of $200,000
  • proposed monthly repayment can be up to two times the original monthly repayment (for the contract being replaced)
  • total Macquarie Leasing client exposure to applicant/guarantors (including this application) is less than $500,000.

Credit reference for replacing another recognised lender loan

A satisfactory credit reference will be required.

Provide either:

  • statement of account (not required for existing Macquarie Leasing contracts) or
  • financier details for use to obtain a verbal reference.

For more information, refer to Credit References, below.

Eligible assets:

  • eligible assets are motor vehicles, caravans, earthmoving equipment and material handling equipment.

Replacement policy

No financials required for commercial clients on selected assets with a net amount financed up to $200,000.

Loan requirements:

  • maximum net amount financed of $200,000
  • proposed monthly repayment can be up to two times the original monthly repayment (for the contract being replaced)
  • total Macquarie client exposure to applicant and guarantors (including this application) is less than $500,000.

Applicant requirements:

  • applicant must be an ABN holder
  • all director guarantees are required
  • satisfactory credit file on applicant and guarantors
  • contract being replaced may be from an open current account, or an account that was closed within the last six months and held either with us or any recognised lender.

Credit reference for replacing another recognised lender loan

A satisfactory credit reference will be required.

Provide either:

  • statement of account (not required for existing Macquarie Leasing contracts) or
  • financier details for use to obtain a verbal reference.

For more information, refer to Credit References, below.

Eligible assets:

Eligible assets are motor vehicles, caravans, earthmoving equipment and material handling equipment.

Credit references


All applicants for streamlined policies must provide a satisfactory credit reference.

A Statement of Account is our preferred form of credit reference. However, where a Statement of Account can’t be supplied, we can conduct a verbal credit reference.

Verbal credit references will be conducted based on the availability of the relevant financier. If we are waiting for a reference, we'll email you to let you know the application has qualified for streamlined assessment and is currently waiting for the reference to be conducted.

A credit reference can be from us or another recognised financier. Please see below for information about acceptable references.

Acceptable reference types

  • asset loan (commercial or secured personal)
  • business loan

If you’re unable to provide a reference for a similar type of lending:

  • a personal residential home loan statement can be used. Please refer to the credit reference requirements below for more information.

 

Borrower requirements 

A credit reference can be in either:

  • the name of the borrowing entity; or
  • where applicable, in the individual’s name. Contact us to discuss your application.

 

Additional conditions

Asset loan (commercial or secured personal) or Business loan statements must satisfy the following requirements:

  • the proposed repayment can be up to two times the repayment of the credit reference. Multiple references can be used
  • a credit reference can be from an open account, or an account that was closed within the last 24 months
  • a credit reference must be for an account that has/had been active for at least 6 months
  • satisfactory credit reference check.

Personal residential home loan statements must satisfy the following requirements:

  • owner-occupied
  • the home loan must be an open account
  • a credit reference must be for an account that has been active for at least 6 months
  • the proposed asset finance repayment amount can be up to or equal to the monthly home loan repayment amount
  • only available for sole trader, sole director or spousal directorship/partnership structures. For alternative structures please contact us to discuss.

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, such as information provided to you in our Product Handbook. 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.

Age of applicant conditions

Depending on the age of the applicant/s, conditions may apply, including:

  • applicants under 21 years of age can apply for finance up to a maximum net amount financed of $40,000*
  • applicants between 21-24 can apply for finance up to a maximum net amount financed of $50,000*
  • applicants under 25, max LVR is 115%
  • applicants considering retirement may be required to supply additional information to ensure repayments are sustainable throughout the term of the contract.

*If applicant/s holds a Learner Driver Licence, additional conditions will apply.

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
Self Employed Refer to Self-Employed Income section Refer to Self-Employed Income section
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.

Pay As You Go (PAYG) income

All PAYG Income should be verified with a payslip(s).

The payslip must be dated within one month of the application and contain the following information:

  • employer’s name
  • employer’s ABN
  • net year to date (YTD) Income
  • superannuation payment amounts.

How many payslips are required?

Generally, only one payslip is required for income verification except in the following circumstances:

  • if the payslip doesn’t contain the YTD – we'll require two months’ worth of payslips
  • If the most recent payslip has a payment period end date before 31 August we'll also require:
    • the last available payslip from the previous tax year, or
    • annual payment summary from the previous tax year.

Casual Employees

Casual Income must be consistent PAYG income for six months and shouldn’t include seasonal work income like fruit picking/harvesting/ski fields work. PAYG income verification requirements apply.

If the most recent payslip has a payment period end date before 31 December we’ll also require:

  • the last available payslip from the previous tax year, or
  • annual payment summary from the previous tax year.

Deductions

To determine serviceability of an applicant, net income is considered, i.e., total income less any deductions noted on the payslip.

Any deductions already noted on the payslip or salary sacrifice statement aren’t required to be declared on the applicant’s expenses.

Overtime and Commissions

Overtime and commission amounts may be considered provided it's clear they're ongoing and consistent in nature.

Self employed income


For self-employed income to be considered, the applicant should be employed in the same industry for at least 12 months.

Where the applicant has been self-employed for less than 12 months, this is treated as a new business venture for the purpose of assessment.  

Acceptable sources of income verification include:

Option 1

 

Where there is only one source of income

 

A
Notice of assessment (NOA) for the tax year ended ≤ 18 months previously
   B Financial statements for the tax year ended ≤ 12 months previously and the last tax return lodged

 

Where there are multiple sources of income

 

A
Full tax return and notice of assessment (NOA) for the tax year ended ≤ 18 months previously
   B Financial statements for the tax year ended ≤ 12 months previously and the last ax return lodged

 

Option 2

In circumstances where:

a)     the applicant is the sole director and shareholder, or

b)     the applicant and his/her spouse are the only two directors and shareholders of the company; and the applicant relies on the business’ retained profits to service the loan, then the following can be obtained:

A Full company tax return for the tax year ended ≤ 18 months previously
B Company financial statements for the tax year ended ≤ 12 months previously

 

Option 3

Where the applicant and/or company hasn’t completed or lodged any Tax Returns or Financial Statements for example due to being self-employed for a relatively short period of time, then the following could be obtained:

A Bank statements and written confirmation of income by accountant
B Payslips (if applicant is a contractor and normally receives payslips) and written confirmation of income by accountant

 

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 Up to
12 – 36 month 40%
37 – 48 months 35%
49 – 60 months 30%
61 – 84 months 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.