Read the scenario provided and using the information and data supplied, organise a formal loan submission for a lender using the following headings. Use subheadings where appropriate to ensure your submission will be easily read and understood by the lender. The client file would contain the standard client information and data that would be included in a typical submission for a loan of this complexity. Created as a Word document, your lender submission should include as a minimum the following headings: 1. Borrower's Details 2. Background 3. Loan Purpose 4. Facility Details (research a Bank website for commercial loan terms) 5. Funds Position 6. Servicing Capacity (use manual calculations and show all workings) 7. Security 8. Risk Assessment and Management (according to lender policy, guidelines and relevant legislation). Consideration must be given to any environmental, heritage or native title implications 9. Recommendations 10. List of Attachments* * Attachments which would normally be included in a submission to a lender all need to be listed for the purpose of this assignment. You will not need to create "dummy" supporting documents. Please Note - you should ensure you refer to "Tips" following each assignment.

Angus Bollard has been a real estate agent for over 20 years and jointly with his wife Janice own 6 shops at 55 Park Road, Belmont. Mr andMrs Bollard own the shopping centre under the Bollard Family Trust. The property was recently valued at $1,450,000 and has a current ZZZ Bank mortgage of $575,000. Five of the shops are rented out for $96,000. The sixth shop is occupied byMr Bollard's real estate business, Bollards Real Estate Pty Ltd, which pays annual rental of $42,000 to the Family Trust. Bollards Real Estate Pty Ltd was formed at the beginning of the last financial year to take over the real estate agency business, which was previously conducted by a partnership between Mr Bollard and James Hopper. Bollards Real Estate Pty Ltd took over the business when Mr Hopper retired; Angus Bollard is the sole director of Bollards Real Estate Pty Ltd. Mr andMrs Bollard now wish to acquire 3,000m2 of land near their existing shopping centre and hold it for 1 - 2 years pending rezoning. The purchase price is $550,000. The land was previously used as a State Government Health and Dental Centre, but the building was demolished when it became obsolete. The land is currently zoned 'Special Purpose', but the local council earmarked the land for future 'Commercial' use in its recently released Town Planning Scheme. The land is located at 423 Belmont Road, Belmont and has a two-street frontage with considerable passing traffic. The Bollards have contracted to purchase the property in their capacity as trustees of their Family Trust and settlement is due with 60 days. They wish to raise 100% of the purchase price plus $25,000 for stamp duty, financing and conveyancing costs. They arewilling to offer both the land and their existing shopping centre as security for the proposed loan. They will contribute a further $20,000 over the next 1-2 years to cover the costs associated with rezoning of the property and obtaining approval to develop another shopping centre. ZZZ Bank policy does not allow lending against land zoned 'Special Purpose' and cannot assist with the purchase. The Bollards have appointed you to approach an alternative lender to refinance their ZZZ Bank loan and obtain the additional funds required. Assume an interest rate of 6.5% for a commercial loan, 7% for an overdraft. Angus Mark Bollard - DOB 29/07 1975 DL # 2945758 Janice Elizabeth Bollard - DOB 15/06 1977 DL # 2786454 Married with three adult children (one working in the real estate business) Address: 12 Currumbin Close, Carindale QLD 4152 Accountant - Ainslie and Partners Telephone - 07 3349 9999 Angus has been a real estate agent for 22 years in the Brisbane south-east area, he specialises in commercial and industrial property (rent roll comprises 75% commercial and industrial properties). His gross salary last financial year was $78,000. In the previous financial year, he drew $55,000 from the partnership with James Hopper. Janice has been an employee, employed as the property manager since Bollards Real Estate Pty Ltd took over the agency after the partnership. Her gross wage last financial year was $43,000. She did not work in the previous financial year.

Last financial year Bollards Real Estate Pty Ltd recorded the following financial results: Gross Revenue $346,000 Net Profit $ 72,000 Depreciation $ 14,000 Director Superannuation $ 11,000 In the previous financial year, the partnership of Angus Bollard and James Hopper trading as Bollards Real Estate recorded the following financial results: Gross Revenue $422,000 Net Profit $ 84,000 Depreciation $ 16,000 Director Superannuation $ 11,000 The Bollard Family Trust purchased the shopping centre at Park Road Belmont 18 months ago and its financial statements for the past financial year are as follows: Gross Rental Income $138,000 Loan Interest $ 52,000 Management Fees $ 11,000 (paid to Bollards RE Pty Ltd) Net Profit $ 50,000 Depreciation $ 25,000 Personal Financial Position - Angus and Janice Bollard ASSETS House at 12 Currumbin Close Carindale QLD $560,000 Share Portfolio (Blues Chip Listed Shares) $345,000 Motor Vehicles $ 60,000 Furniture $ 85,000 Cash at Bank $ 45,000 LIABILITIES Home Loan with ZZZ Bank $190,000 * ZZZ Bank Credit Card (Limit $20,000) $ 10,000 *Existing home loan is currently fixed at 3.5%, choosing to pay P&I with remaining loan term 25 years.

Financial Position of Bollards Real Estate Pty Ltd ASSETS Business Goodwill $250,000 Plant & Equipment $ 35,000 Debtors $ 30,000 LIABILITIES ZZZ Bank Overdraft (limit $40,000 secured by residence) $25,000 (Keep in mind that, in the absence of actual tax returns which would confirm the income distribution of the trust, any profit would be distributed and taxed in the hands of the beneficiaries. For the purpose of this assignment, assume company tax rate of 25% and superannuation rate of 10.5%, even though in "real life" of course you cannot assume, and the distributions would be clear in "real life" financials.) Property being purchased Vacant Land 423 Belmont Road, Belmont QLD 4171 Lot 84 on RP 9564 Zoning "Special Purpose" Area 3000m2 Existing Property Shopping Centre 55 Park Road, Belmont QLD 4171 Lot 43 on RP 9542 Zoning "Commercial" Area 1850m2 Tenancies Tenant Rent Term Rent Review J & R Blend T/A Blend News $22,000 pa net 3 + 3 years Annually by CPI Copelin Accounting Pty Ltd $18,000 pa net 1 + 1 + 1 years Annually by CPI R Spragos T/A Roger's Deli $28,000 pa net 5 + 5 years Annually by CPI Vu Nguyen T/A Care Pharmacy $20,000 pa net 3 + 3 years Annually by CPI M Goodson T/A Good Alterations $8,000 pa net 3 + 3 years Annually by CPI Bollards Real Estate Pty Ltd $42,000 pa net 3 + 3 years Annually by CPI

TIPS for Assignment 1 1. Submission - In this Assignment 1, your submission will consist of both: a) Income and debt for the borrowing entities both company and Trust for servicing purposes. b) Listed separately, the personal income and debt for directors, to strengthen the submission. 2. Presentation - Although in real life you may well present the client part of this assignment in person to the client ie. verbally, for the purpose of this assignment please present your submission in aWord document format. In order to gain an understanding of how to present this assignment, please refer to Appendix B. 3. Facility Details - This section requires loan terms (commercial loan terms). Hint: research commercial loan terms online, as these are different to standard home lending terms. This section also requires your decision on whether it should be P&I or I/O, and you should also take into consideration the special zoning for the vacant land for the loan term. 4. Servicing Capacity - You can assume that the lender will allow you to use two addbacks Depreciation and Interest along with any Director Superannuation that is above the standard superannuation guarantee (10.5% to 30/6/2023). Use the company tax rate of 25% when working out the taxation on income. You need to conduct manual calculations showing all workings. Refer to the formatted example in Appendix B. 5. Security - Security in the way of a mortgage over the homes of the Directors could be taken, but is probably unnecessary in this scenario. The more likely security would comprise of the commercial property and the new land, along with Director guarantees and GSA. 6. Superannuation - As above, Superannuation Guarantee rates vary from year to year; you can calculate the actual rate for the different years you can use the actual rate or the rate to 30/6/2023 of 10.5% in your calculations, for consistency over the years.