Target Market Determination – Vendor Funding Loans

This Target Market Determination (TMD) has been prepared in accordance with the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth) and associated Regulations. TMDs are designed to assist issuers to ensure that the financial products they issue are likely to be consistent with the likely objective, financial situation and needs of the consumers for whom they are intended (the target market) and to assist distributors to ensure that financial products are distributed to the target market.

This TMD is general in nature and should not be construed as financial advice. Consumers should obtain independent advice prior to acquiring the product to ensure that it is appropriate for their objectives, financial situation and needs.

Product

Vendor funding loans including Vendor Paid Advertising, Presentation of Property and Buyer Deposit Funding loans.

Product Issuer

This product is issued by Property Credit Pty Ltd ACN 638 329 674, Australian Credit Licence Number 528878

Date of TMD

12 December 2022

Target Market Determination

Description of target market, including likely objectives, financial situations and needs

This product has been assessed as meeting the likely objectives, financial situation and needs of consumers who:

• Meet the company’s eligibility criteria (including but not limited to):
  • Are over the age of 18 years of age
  • Are an Australian citizen or permanent resident
  • Are the legal owner of residential property in Australia
  • Have entered into an exclusive agency agreement to appoint a licensed real estate agency to sell the property
• Require a line of credit for an authorised purpose, including:
  • costs and expenses associated with advertising the property in anticipation of sale
  • costs and expenses associated with non-structural improvements to the property in anticipation of sale
  • monies required to fund a deposit in the purchase of a property prior to the settlement of the property
  • other purposes approved by us
• Require the ability to progressively draw funds throughout the sale of the property.
• Have appointed a real estate agent to sell the property and will have the property available for purchase within 14 days of the first drawdown.
• Can repay the outstanding loan balance in full:
  • on settlement of the property or,
  • if the property has not been sold within 6 months of the first drawdown, then on the day 6 months after the first drawdown.
• Can complete the application form online.

Description of product including key attributes

This product’s key attributes include the following:

• Loan Advance is subject to lending criteria, the loan purpose and point in time during the property sale
• Loan repayments are the earlier of:
  • 6 months from the initial drawdown or
  • On settlement (sale) of the property
• Fees and charges include establishment fees, monthly fees and late fees
• Product features:
  • Online application process
  • Digital Verification Service capability for verification of identity requirements
  • Customer portal
  • Customer support including phone, email and chat capabilities
  • Electronic contract distribution and signature capability

Class of customers for whom this product is not suitable

This product may not be suitable for consumers who:

• Do not meet our eligibility criteria
• Do not have the ability to repay the outstanding loan balance in full at the end of the loan term if the property does not sell before the loan term ends
• Have appointed more than one agency to sell the property

Explanation of why the product is likely to be consistent with the likely objectives, financial situation and needs of consumer in the target market

The product allows property owners that want to sell their property to borrow monies ahead of receiving funds on settlement of the property. Monies must be used for an approved purpose including for the purpose of making minor improvements to the property, paying to advertise their property or fund future property purchases. Consumer needs and objectives must be the sale of the property and the repayment of monies on date of settlement.

The product also allows property owners to progressively access funds during the sale of the property.

Distribution Conditions

This product can be distributed through the distributors set out below. All distribution channels require an application for the loan to be submitted to Property Credit via its website or the Property Credit sales team.

1. Direct – Property Credit’s website and sales team 

Property Credit staff are required to undertake training prior to assisting applicants with loans and must follow all documented procedures. Property Credit will ask screening questions as part of the application to ensure that a prospective borrower is within the target market set out above.

Property Credit considers this is an appropriate distribution channel because the nature of the target market and the requirement of all sales staff to have the necessary training, skills and knowledge to assess whether the consumer is within the target market.

2. Third Party – Real Estate Agents 

Real estate agents who are appointed as sales agents by prospective vendors may refer those prospective vendors to Property Credit to assist them with funding expenses required to sell their home. Property Credit will only enter into agreements with real estate agents who it considers are reputable and who have the necessary licences Property Credit require.

Property Credit considers this is an appropriate distribution channel due to their industry knowledge and the nature of the target market.

Review Triggers

The following events are review triggers that would reasonably suggest that the TMD is no longer appropriate: 

• A significant dealing of the product to consumers outside the target market occurs
• A significant number of systemic complaints are received from consumers in relation to the product
• There is a material change to the product or the terms and conditions by us.
• There are significant and adverse changes in the credit performance of the product such as overdue payments, defaults, hardship,
• There are significant changes to Australian credit laws that affect the product

Review Period

First review date
6 months after the date of this TMD

Period review
Every 12 months after the initial and each subsequent review.

Trigger Review
Review to be completed within 10 business days of the identification of a trigger event.

Reporting Requirements

The following information must be provided to Property Credit by distributors if they become aware of any of the following matters within the corresponding timeframe.