AFG adds Prospa to its business lending panel

Australia’s largest mortgage broker, Australian Finance Group (AFG), has added Australia’s largest online business lender Prospa to its lending panel.

AFG Managing Director Brett McKeon said the company will promote Prospa’s small business loans through its 2,300-strong broker network.

Mr McKeon said the agreement with Prospa continues AFG’s commitment to ensuring its member brokers have access to the best and most competitive products for their customers.

“We provide our brokers with industry leading technology, support and services to help them grow their businesses,” Mr McKeon said.

“We stated in our recent Prospectus that we would pursue growth opportunities to provide additional products through our member broker network, and Prospa’s loan offering is complementary to our existing products.”

Prospa is Australian-owned and provides unsecured loans to Australian small businesses.

Download Media Statement: AFG Adds Prospa to its Business Lending Panel

AFG commercial brokers dig deep for K.I.D.S Foundation

AFG’s fourth annual Commercial and Equipment Finance Conference in Melbourne has just come to a close. Top AFG commercial and equipment finance brokers from across the country came together with lender partners and AFG staff for two days of conferencing and along the way raised $11,715 to support a very worthy cause.

Mark Hewitt, AFG General Manager Sales and Operations outlined the program, “The conference aimed to equip brokers with invaluable insights, great tools and the right networks to increase their business performance.

“The agenda also featured an inspirational keynote address from Western Bulldogs List Manager Jason McCartney, and his story touched the hearts of delegates.” Jason came to the attention of the nation in 2002 when he was caught up in the Bali bombings. After sustaining horrific burns, this young Australian with an exceptional talent for Australian Rules football, fought back to tell a story of humanity overcoming adversity.


“With his personal experiences of the horror of burns, Jason now works alongside the K.I.D.S Foundation, a not-for-profit charity that supports children who have endured trauma, burns and other life changing injuries,” he said.

“Jason’s appearance at the conference inspired delegates to dig deep and donate to the K.I.D.S Foundation, with AFG also making a donation.

“The $11,715 raised will go a long way to help support the outstanding work a small charity such as K.I.D.S Foundation does every day.

The inaugural AFG Commercial and Equipment Finance member awards were also launched at this year’s conference. In recognition of outstanding success in these four categories, AFG congratulates the winners:

AFG Commercial Loan Writer of the Year 2015: Daniel Zadnik of Hawthorn Finance, VIC
AFG Commercial Rookie of the Year 2015: Larry Zhou of Link Capital Finance, VIC
AFG Commercial Broker Group of the Year 2015: Business 500, VIC
AFG Asset Finance Writer of the Year 2015: Angelo Pillai of Asset Finance Systems, NSW

Download press release: AFG Media Release – Commercial conference 2015

Renovate Right

It’s been more than 25 years since Tom Hanks and Shelley Long showed us the calamitous side of renovating gone wrong in the comedy movie, The Money Pit, but the warnings ring loud and clear today. With a sluggish property market, many homeowners are opting to renovate rather than relocate. Before you hit the hardware store and strap on the tool belt, here are our top tips to renovate your way to reward, instead of ruin.

1. Renovate or rejuvenate?
You don’t have to tear down walls or add a new storey to add value to your home. If you need extra space, you will probably have to renovate. But there are plenty of ways to add value without making drastic structural changes: paint a new colour scheme inside and out; clean up and replant an overgrown garden; replace floor coverings or sand and revarnish existing timber floors; spruce up old windows with some modern shutters; or create some extra storage with built-in wardrobes.

2. Know what you can and can’t do yourself.
Not the DIY type? Face defeat early and call in experts to tackle the job. It may be difficult to part with money for something you feel you can do yourself, but if you botch the job, you will pay more in the long run. There are some jobs even skilled DIYers should not tackle for safety reasons, including electrical work, asbestos removal and roofing.

3. Target your market.
If you are buying a property specifically to renovate for profit or sprucing up your existing home for sale, consider the likely buyers for the neighbourhood. Remember you’re not renovating for your own lifestyle and tastes, so keep colour palettes neutral and avoid fittings that are overly artistic or unusual.

4. Take a peek at the competition.
Visit some of the fully renovated houses in your area that are up for sale to see what the market is prepared to pay and what buyers are looking for. It will give you a good handle on which features help differentiate one property over another and current values.

5. Don’t overcapitalise.
It remains the golden rule of renovating and is particularly poignant in the current market. Cost every aspect of your project and be realistic about the value it will add, especially if you are planning on staying in the property for only a couple of years or less. If you plan on living there for more than five years, you have a little more leeway to recoup the value of your renovation at sale time. However, it’s still wise to keep at least a 20% margin between what you spend and the current value in case you have to sell sooner than expected.

6. Don’t start what you can’t finish.
If you don’t have the money to undertake your project, don’t start. Some renovators kick off their project with an aim to saving up along the way. If your savings fall short you may be left with an unsightly, unfinished project, which will curtail your capacity to sell if needed. Chances are you will also lose interest in taking on future projects, so make sure you have all the money you need upfront.

Budget Bonanza

The budget gave small business something to smile about, but big business is waiting for more.

Are you reading this on a new laptop or tablet? You may already be reaping the benefits of a Budget which promised something special for Australian small businesses and delivered in spades.

Council of Small Business Chief Executive Peter Strong was so excited about the May Budget he had to check himself.

“I have been effusive in my praise of the budget in various media, and this worried me,”1 he wrote in a newspaper opinion piece after the budget was handed down. “But I checked with our members and they agreed with the effusiveness. One even said that I was understating the fact.”

It’s not often you get more than you’ve asked for but that is what this budget delivered for small business. One of the most talked about items was the $20,000 instant asset write-off for businesses with a turnover under $2 million – about 96 percent of all Australian businesses.

From Budget night these businesses could immediately write off against their taxable income purchases of new and secondhand business assets valued at up to $20,000 each. This is a massive bump up from the previous limit of $1000, but it will revert back to this level on July 1, 2017.

“It will provide motivation to people who wish to start a business, those who want to expand their business, and those who want to replace old machinery and stock. This, in turn, will mean an increase in employment opportunities,” Mr Strong said.

The tax rate for business with turnover under the magic $2 million mark has also been cut 1.5 per cent to 28.5 per cent from the start of this financial year, with a 5 percent discount for unincorporated businesses, capped at $1000.

There was some criticism of the cuts from industry bodies representing start-ups, which said many fledgeling tech businesses with turnovers under $2 million were not yet in profit and therefore not in a position to benefit. 2

But there were other sweeteners for start-ups, with changes to allow them to immediately write-off legal and tax advice involved in establishment, which previously had to be depreciated over five years. The government also delivered on a promise to reform employee share schemes to provide more flexibility in salary packages. Eligible start-ups will be able to offer shares and options at a small discount to employees, with tax-deferred and no tax on the discount.

In other changes to cut red tape, the Government is abolishing fringe benefits on all portable devices used by small businesses from April 1 next year. Previously, if two devices were used for a similar purpose – such as a laptop and tablet – only one could be exempted from fringe benefits tax. The Government has also proposed to allow small businesses to change legal structure without attracting a capital gains tax liability at that point. This change is proposed for the 2016/17 income year.

Australian Chamber of Commerce and Industry (ACCI) Chief Executive Kate Carnell said the Budget was a much-needed ‘turbocharge’ for the small business sector, which had been doing it tough for the past 18 months.

About two weeks after the budget speech the ACCI released its March quarter small business survey which showed the sixth consecutive quarter of declining forecasts from business owners and a gloomy outlook for the economy in general.

“The Budget initiatives, combined with record low-interest rates, should help small businesses rediscover their mojo, which the survey shows has gone missing in recent months,” Ms Carnell said. She said she looked forward to the post-budget June quarter results (due in August).

Australian Industry (Ai) Group was more muted in its praise, with Chief Executive Innes Willox joining others in voicing disappointment there was no tax cut for big business, which will continue to pay 30 percent, while small businesses have had a cut to 28.5 percent. The Government has said corporate tax rates will be considered as part of the Tax White Paper process now underway. An options paper is due in the second half of this year before a final White Paper is released prior to next year’s election.

Mr Willox praised moves to make childcare more flexible and affordable, but sounded a warning about the Government’s controversial ban on maternity leave “double dipping”.

Preventing women from accessing both employer and Government schemes would discourage businesses funding their own schemes and wipe out any advantage they may gain in attracting and retaining staff by offering generous maternity packages.

1 Strong, Peter; Hockey’s ‘small-business budget’ perfect for the sector, The Australian, May 14, 2015.
2 9 things start-ups should know about the 2015 Federal Budget, Business Review Weekly, May 13, 2015.

A site for more eyes – what Google’s mobile friendly update means for your business

If he ever had to hide a body, Jim Stewart jokes, he would put it on page two of Google’s search results. It’s the one place no one would ever look, says Mr Stewart, who heads search engine optimisation company StewArt Media.

An update to Google’s search algorithm earlier this year saw some Australian businesses drop off that coveted front page – and that can mean a massive drop in traffic and, therefore, business.

‘Mobi-geddon’, as it was dubbed by some, was a change to the way Google ranks websites, giving preference to pages that are mobile friendly – that is, they are designed to be easily viewed on devices such as smartphones.

Google’s decision to ping websites that were not mobile-friendly was prompted by changing user habits. At the start of this year, the company found a majority of search requests was originating from mobile devices. And anyone who has tried to view a non-mobile-friendly site on a tiny smartphone screen knows the frustration of zooming in and out to navigate. So Google simply tweaked its search to rank mobile-friendly sites higher on searches originating from mobile devices.

It was a timely reminder that making sure your website keeps pace with changing consumer habits – and Google updates – is one of the cornerstones of business today.

“People talk a lot about social media being important – and it is,” Mr Stewart said. But in the rush to Facebook and Twitter, some companies have fallen into a habit of ‘set and forget’ with their websites.

The main offenders were traditional businesses – such as legal firms – that didn’t view themselves as online companies, or those established pre-2010.

And while a social media presence was important, Google presence was vital.

“The main difference, if you want a comparison, is that social media is like advertising on radio and television and Google is like the old Yellow Pages”, he said.

And if you’re not on page one of Google, it can be as impactful as the “not happy Jan” days of forgetting your Yellow Pages listing.

Although Google is constantly tweaking its algorithm, the mobile update was the biggest change for about 18 months and seemed to catch even some major players napping. Shortly after the change was announced in February, StewArt Media conducted a quick survey and found an astounding 50 per cent of Australia’s ASX 200 websites were not mobile-friendly.

And while some business-to-business companies may think their online presence is not as important as those in retail, Mr Stewart has some startling statistics.

One of his clients, a B2B recruitment firm, found about half their online traffic came from mobile devices.

“What we’ve found is that if you’re not mobile responsive, your mobile traffic will convert 75 percent less than what your desktop traffic will,” he said.

By “convert” Mr Stewart means what businesses want users to do once they get to their website. For example – buy something, call you, or fill out a form.

“So regardless of a Google mobile update, it really makes good business sense to be mobile-friendly,” he said.

Another change Google has rolled out in recent months is a move to stop sites using ‘doorway’ pages to boost rankings – that is, lots of small sites which link back to a main site.

Mr Stewart typically uses skip bin hire as an example. A skip bin hire company, say, in Melbourne, may create multiple pages about their hire service that are identical save for the suburb name, hoping to capture users searching for bin hire in their local area. “That’s not really much value to the user so Google is saying it is going to hit those sites,” he said.


  • Know your Audience: Get Google Analytics, a free tool which gives website operators basic, through to extremely detailed, information about who is accessing your website and what they are doing once there. It can tell you whether people are accessing your site from a mobile device or laptop, how long they spend on the site and what they look at. It can even break users into related cohorts and provide data on how different segments of clients use the site.
  • Think of users first and Google second: There is no use trying to ‘game’ Google. The search engine has become efficient at rooting out rorts – including hiding text to artificially boost rankings – something that can get your site banned. Unfortunately, the marketplace has been conditioned to do that by bad Search Engine Optimisation (SEO) practices, but those days are over. Don’t think about Google first. Think about Google second and think about the user first. What we’re trying to get people to understand is that your website should be a place where you publish great content …then Google will love you.
  • Publish or Perish: Business should view their websites as publishing platforms. The more authoritative, original content you publish about your key business area, the higher Google will rank you (provided your site is also running fast and free from link errors). If you are not publishing on a regular basis, people who are looking for your products or services usually aren’t going to find you or if they do find you and your site is a bit of a ghost town, then they’re probably not going to call you. Start with a written blog (try WordPress as a platform) because Google loves text. And while video may not make you rank better, it is popular. Retailers could start with simple “unboxing” videos. People love to see what they are going to get when they buy that box.
  • Go Google-eyed: Webmaster Tools is a free Google service that helps you see how Google views your site. It also provides data to help optimise your rankings, such as which keywords commonly bring up your site in search results, and what queries deliver the most traffic to your site. Use Webmaster Tools to perform a quick health check, which allows you to see every page Google has crawled on your site. Type ‘site:’ followed by your web address into Webmaster Tools. The number of results returned should approximately match the number of pages on your website. If the number is significantly higher or lower, you have a problem. Higher – Google has found some duplication. Lower – Google cannot see some of your site.
  • Lay off the cut and paste: Do not duplicate your about information on Facebook, Yellow Pages or TrueLocal. Google hates duplication and re-wording it gives you fresh content points.

Courtesy Jim Stewart

Many happy returns – tax time is here!

It’s time to roll up your sleeves, report, reconcile and get set for the year ahead. The start of a new financial year is the time to draw a line under the old and begin planning for the future.

For business owners, that means make sure everything from 2014/15 has been tied up and you can move forward without tripping over any loose ends. This involves some regular ‘housekeeping’ tasks (listed below) that should become a habit. But on top of these, each Financial New Year throws up a few fresh challenges as the Government tweaks the goal posts for business.

Two major changes to be taken on board in the 2015/16 financial year both apply to businesses with a turnover under $2 million – a 1.5 percent drop in the tax rate from 30 per cent to 28.5 per cent and the $20,000 instant asset write-off.

Now the dust has settled from the May announcement of the $20,000 stimulus plan, one of the major tasks for most business owners is to look at their budget for 2015/16 and work out how to use (or not) the generous new provision.

Manuel Tsirmiris of Melbourne’s Accountancy Group has been advising clients not to get carried away with budget hype in their new year planning. “We’ve explained to our clients there’s no sense of urgency to go off and replace your assets unless you were planning on doing that,” he said. “You don’t just replace assets for the hell of replacing them.” Essentially the write-off facility – in place until June 30, 2017 – allows businesses to recoup 28.5 cents in the dollar for money spent on assets valued at $20,000 or less in this tax year. Most new and second-hand business equipment, except software, is eligible.

Using a business making $100,000 profit as an example, Mr Tsirmiris said: “You can buy five assets for $20,000 and get your profit down to zero.” But you would be spending about $100,000 to save a $28,500 tax bill. “From a cash flow perspective, sometimes it’s easier to pay your tax if there are no assets that you need to replace,” he said. Longer-term finance for some purchases could also be an option. “You’ll get the deduction upfront, whereas you pay the cash later.” The tax office has also flagged it is on the lookout for profligate spending, stating on its website: “If small businesses exhibit behaviours that indicate a high level of risk, they can expect a higher level of interaction with the ATO.”

Along with planning your purchases, the new financial year is also a good time to review contracts with suppliers and ensure they are delivering value for money. “As a business owner, you can shop around and get better options, whether it be stationery or corporate borrowings,” Mr Tsirmiris said. And having a professional on board can save time when it comes to making sure you have the right sort of finance in place for the year ahead. With group certificates being issued and a lot of statutory reporting (including superannuation obligations) due, July is also a pertinent time to review contracting arrangements to ensure you don’t have any contractors who should be paid as employees.

The ATO has been cracking down on sham contracting arrangements which some businesses use to avoid paying higher rates and super contributions to workers who should really be classed as employees. A genuine contractor should typically own their own tools and equipment, be autonomous in their decision-making, be able to freely delegate and not financially dependent on the company they are providing services to.

New financial year checklist

  • Get your operating budget for the year completed.
  • Get your cash flow budget in place.
  • Check the adequacy of your funding arrangements with your broker. Check any loan covenants to ensure you are operating in accord.
  • Review any contractors to be used during the year ahead and ensure they would not be deemed ‘employees’ by the ATO.
  • Reconcile your GST control account.
  • Ensure the income declared in your BAS for 2014/15 reconciles with your annual income.
  • Ensure minutes for all directors and trustee resolutions for 2014/15 have been documented and signed off.

The smart money is on you

By world standards, Australia is a wealthy nation. We have a strong economy with high employment and a far rosier outlook than most developed countries. And yet almost half (47 per cent) of us are anxious about our finances, according to research by the Boston Consulting Group.

Finance guru Paul Clitheroe reckons most Australians want to improve their financial situation but don’t know where to start. That’s why he has put his money where his mouth is to be an ambassador for the first ever MoneySmart Week (September 2 — 8), an initiative of the Australian Government Financial Literacy Board.

Financial literacy is not about getting rich. It’s about understanding and putting into action the basics of budgeting, saving, investing and protecting our assets, Clitheroe says.

Understanding money helps individuals and families manage financial stress, work towards meeting their goals and assists in securing their financial well-being.
– Paul Clitheroe

We’re part of a group that is proud to be a key supporter of MoneySmart Week. We pride ourselves on working with customers to find the best possible home loans to suit their budgets and circumstances. So we are delighted to get behind a program that will help Australians make smarter money choices.

The centrepiece of MoneySmart Week will be a call for Australians to do a Money Health Check to encourage us all to set financial goals and put steps in place to reach them.

To celebrate the first MoneySmart Week, we have put together our top tips to help get you started:

Stick to a budget
Most people don’t stick to a budget because they don’t have one. Having a budget not only helps you spend within your means and save, it can ease personal and relationship stress.
Make sure you are realistic and thorough when working out your budget. Include all of your expenses — coffees, lunches, hair salon visits, entertainment, cosmetics and clothes — plus the obvious weekly and monthly necessities, such as your mortgage or rent, groceries and petrol.

It’s also a good idea to budget for a whole year so you don’t miss large, irregular expenses, such as council rates, car registration, Christmas gifts and holidays. Break these expenses down around your pay cycle so you get a true picture of what you need to spend from each pay and what you have left at your disposal.

Break down big bills
The big bills mentioned above can be real budget busters. Some of us are disciplined enough to leave money in our account for a rainy day while some need to set funds aside so we are not tempted to spend.

If you are more of a spender than a saver, set up a separate account for quarterly and annual bills and contribute to it regularly based on your budget breakdown. For example, if you know you have to pay around $400 in council rates each quarter and you get paid fortnightly, set aside $60-$70 from each pay in a separate account. Apply the same concept to Christmas expenses to ease the squeeze on your credit card and enjoy a debt-free start to the following year!

Drive down debt
Most of us have debt. The secret is knowing the difference between good debt and bad. Having a home loan, for example, is healthier than carrying a hefty, high-interest credit card bill. Property is an asset, which has the potential to increase in value over time. Credit cards, on the other hand, are used to pay for depreciating assets, holidays and entertainment. Often the debt you owe far outweighs the value of the original purchase.
Take a pulse check on your debt by looking at how much you owe, what you are paying in interest and how long it will take to pay off. Make a plan to pay down the loans with the highest interest first, even it means cutting back your personal spending for a period.

Protect your assets
We work hard to establish our assets, but we don’t always make sure they are fully protected if the worst happens. Insurance Council of Australia figures suggest some 70 per cent of homes in Australia are under-insured. Owning a home and not having adequate insurance is a gamble. Apart from many of us living in areas prone to natural disasters, we all face the risk of a house fire.

Make sure your sum insured reflects how much it will cost to rebuild your entire home and replace all of your contents. Some insurers now offer complete replacement policies for the home building where the premium automatically reflects any increases in the building costs.

You should also have some income protection in case you are unable to work. Check the disability cover in your superannuation and consider getting extra income protection to cover any gaps.

Money Health Check
To find out how your finances are fairing, take a Money Health Check at There are also tools to help individuals and households budget, set savings goals and calculate their net worth. We are here to check the health of your home loan to make sure it suits your circumstances and is helping you reach your financial goals and if we haven’t done this in a while, do get back in touch.

AFG Mortgage Index – July 2015

AFG, Australia’s largest mortgage broker, announced a record-breaking volume of $5.1 billion in mortgages processed for the month of June – up 34.5% on June 2014, and 1.7% on last month. This is also AFG’s second highest month ever after achieving volume of $5.2 billion in March this year.

While overall mortgage figures continue to be buoyant, the June figures showed a significant cooling for investment loans – down to 36.9% nationally from a peak of 43.1% in April. The last time overall investment loans were at similar levels was July 2013, when they comprised 35.9% of all mortgages processed.

Investment loans moderated most of all in NSW from 49.8% in May to 41.6% in June. Investment loans had been running at an average of 49.5% of all loans in NSW for the previous 12 months.

Elsewhere in Australia, the same moderating trend was repeated, with investment loans declining in SA from 41.8% to 36.8%, in QLD from 36.1% to 34.1%, in VIC from 36.5% to 35.7% and in WA from 31.8% to 31.2%.

Brett McKeon, AFG Managing Director says: “These figures suggest that APRA controls are starting to take effect, but not at the expense of the overall mortgage market. If this trend continues, it should help allay concerns about overheating in Sydney, in particular, as investment levels there come back into line with the sustainable, long term, national average.”

AFG’s Mortgage Index also shows that non-major lenders are making further headway as they compete for greater market share. Last month saw 30.9% of all mortgages processed for non-major lenders – the highest such figure since 32.5% recorded in December 2014. They are strongest in winning refinance loans (34.8% of all new loans) and weakest at competing for investors, where the major lenders still dominate with 75.5% of all new home loans.

Of new borrowers, 14.2% opted for a fixed rate mortgage last month, compared to 15.2% in May, with 76% of borrowers choosing a standard or basic variable home loan.

Download full report here: AFG – July Mortgage Index


AFG Mortgage Index – Going Forward

Historically AFG has released the AFG Mortgage Index on a monthly basis. Following AFG’s successful listing on the ASX, AFG has determined that the AFG Mortgage Index will be published on a quarterly basis from July 2015 (ie the first quarter will reflect the 3 months ending 30 September 2015)