Hello Prospective Vendor Finacier,

Back in the early 2000’s when I started in Vendor Finance (VF), if you thought you were a vendor financier you were ;-) That is, there was almost no regulation of our industry.

No regulation had its good and bad points, but that all came to an end on the 1 July 2010 with the introduction of the National Consumer Credit Protection Act 2009 (NCCP).

Credit Legislation Consequences

This federal (nationwide) Act roped in most vendor financiers as a lot of the vendor finance techniques we use are classed as consumer credit contracts.

The NCCP requires anybody or any company who “in the course of a business” provides consumer credit or consumer credit advice, to hold an Australian Credit Licence (ACL) or to

be a Credit Representative (CR) of an ACL holder.

  • If you plan to use Instalment Contracts and/or vendor financed Mortgages in your vendor finance (VF) business, you need to be an ACL holder or a CR.
  • All Vendor Financiers who intend to become VF Joint Venturers, or who desire to advertise on websites or in the media need to obtain an ACL or be authorised as a CR.

Real Estate Agent Legislation

Next, let me ask you a question. If you are talking to a property seller about selling their property and as a result of that conversation you make money from the sale, what are you acting as? There is only one answer and it is this: you’re acting as a real estate agent in every State and Territory of Australia.

Again, if you are the Title holder (owner) of the property, you don’t need real estate agent licence coverage to sell your own property. However, if you are not the owner, you need to be a licensed real estate agent or an authorised real estate agent’s representative.

First Steps

As a new entrant to the Vendor Finance industry I would:

  1. Become an authorised real estate agent representative, then
  2. Look at getting Credit Representative status if you are going to use credit contracts.

As an ACL full licensee, I work with my students for them to be a Credit Representative before they are eligible for a full ACL of their own:

I charge a nominal fee for this. This is only applicable for two years, then you can apply for and operate under your own full Australian Credit License.

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To Your Success
Paul Zalitis
The Aussie Wrapper