MarketLend1997 #7473

I note that the Director of Financier Pty Ltd operates through a Family Trust. This could be due to a number of different reasons but I presume these include taxation purposes and to shield assets from creditors. I would like to seek others’ understanding and opinion whether such a Director’s Guarantee is in fact enforceable given the trust structure in place. I understand that this is a complicated area of law but this may potentially add to the risk profile of such an unsecured loan. I understand this is only one factor to be considered and the overall financial position needs to be assessed but it is of importance to me when choosing between the risk and return offered by an uninsured and insured loan through Marketlend.

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leotyndall #7475

Dear Marketlend1997,

It is always a complicated legal solution when there is a situation that the account holder is a trustee for a trust.

Marketlend obtains not only the obligation from the trustee of the trust but also the individuals to pay the loan. We obtain a personal guarantee and indemnity from the individuals.

That being said, it is a negative factor to the risk assessment a trust structure and we take this into consideration when completing the risk assessment model and encourage you to do as well.

Marketlend Risk
*past returns are not a guide to future returns, and investors are recommended to obtain independent legal and financial advice prior to investing.

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kulvindar.s #7576

Hi Marketlend1997,

As Leo has mentioned Trust is a complicated matter. As you have mentioned few reasons re: trust are:

• Tax minimisation
• Asset protection and but not limited to
• Inflating balance sheets and profits (caution should be taken on this comment)

In the scheme of things applicant is a small SME, hence, not real concern for short to medium term.

I would invest in the proposal based on the 2 recent bank sts (confirm no dishonours, gambling or overdrawn account), and financials (inconsistent but expected for such a business) coupled with current credit bureau (no signs of habitual high risk lenders).

This is my 2 cents, however, I would like to know if the credit application form customer completes contains caveat clause in the terms and conditions as a fall-back position (provided the director is property backed, hence are they?).

Regards

Kul

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