NAB flags transactions in limbo
A NAB Business banking executive said around 15 funding transactions for financial planning practices have been stuck in limbo over the last couple of months, mostly due to issues associated with the Future of Financial Advice reforms.
National manager for financial planner banking at NAB Daniel Lowinger told a breakfast event at the Association of Financial Advisers (AFA) conference that the transactions had been stalled due to issues related to the grandfathering arrangements, which the Assistant Treasurer Arthur Sinodinos said would be fixed as soon as possible, though there will be a potentially lengthy process to it.
"The question is how quickly [the issues will be fixed] and how many more transactions will be stalled as a result," Lowinger said.
That being said, Lowinger noted there was a lot of succession planning that went on within the financial planning world.
He said character and capability of the core business were among the key things banks look at when assessing a business loan, in addition to cash flow.
"People think the banks look at the recurring revenue of the business when assessing a loan, but first and foremost it's about cash generation," Lowinger said.
Some of the red flags, he added, include so-called ‘dealer group jumping', or belonging to an unrecognised dealer group, in addition to having no proven track record and having a complex business and ownership structure.
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