CAFBA 19-20 e Flip

Annual Review 2019-2020

Commercial & Asset Finance Brokers The national peak professional body of Commercial Finance Brokers

Our Mission Our work is to grow and support a diverse profession of commercial and asset ďŹ nance brokers.

Our Vision When our work is done business will have access to ďŹ nance to start, maintain & grow.

Professional Development

Market Outlook Representation

Leadership Diversity

Contents 1.

President's Report

2

2.

CEO's Report

4

3.

CAFBA Board of Directors

6

4.

CAFBA Affiliate Members

8

5.

Legislation, Regulation and Lobbying under COVID-19

9

6.

Commercial Finance - Market Overview 6.1 Commercial Property Debt Market Update 6.2 Commercial Equipment Finance Market

12

7.

CAFBA Membership

14

8.

Women in Leadership Scholarship Program

15

9.

Women’s Networking Forum

17

10.

CLYP Commercial Lending Young Professionals

19

11.

CAFBA Education Council

20

12.

CAFBA Aggregation Benchmark Report

21

13.

Awards 13.1 Firm and Broker of the Year 13.2 Women in Leadership 13.3 Financier of the Year 13.4 Business Development Manager of the Year

22

14.

Financial Summary

29

15.

Honour Board

33

1

Annual Review 2019-2020

President's Report In past years I've embraced the President's Message as an opportunity to convey a summary of the events and achievements of the year, and to provide the current and future readership with a sense of the collective aspirations of our members at that time.

We have engaged equally with both major political parties and used CAFBA's line of sight to all levels of banking and our ground-level knowledge of customer needs to shape and to advise on policy. Again, we thank the major parties for engaging and taking our knowledge onboard.

This year is a little unusual to say the least, not just because of COVID, but this will also be my last message as President so it is my final opportunity to covey those sentiments, and I have eleven years to reflect on rather than just one.

Enough has been written about COVID and I don't need to reiterate the impact it has had on our families, our businesses, our communities and on the world.

But there is much that I'm proud to say about the way our CAFBA community has pushed through and continued to deliver outcomes for our clients and the businesses and families who rely on them.

We have continued our commitment and contribution to the Council of Small Business Associations of Australia (COSBOA) and we thank Peter Strong and the COSBOA Board for their incredible ongoing support of CAFBA. We have held policy discussions with lenders, and clearly expressed the collective view and desired outcomes of CAFBA members.

Before we fully understood COVID, Australia in early 2020 was gripped by unprecedented bushfires, loss of property, destruction of businesses and whole communities, with thick acrid smoke choking our major cities. Our members with regional clients were quick to respond with loan assistance and answering client concerns, resolving issues, or simply talking to affected clients during tragic times.

Our stakeholder engagements have included direct input into the Instant Asset Write-off Extension, consultation on changes to insolvency laws, advice on the removal of lending guidelines which have reduced access to credit for businesses, advice and updates on the loan deferral scheme, consultation on the initial SME Guarantee scheme, and further consultation on the revised SMEG-2 scheme.

But this response was only the forerunner to a much broader set of issues with the arrival of a pandemic on a global scale. And while the future of their own businesses was uncertain, our members devoted their time to the unpaid task of managing loan deferrals and providing a degree of certainty and comfort to businesses owners who really needed it.

Our insights have been sought by the media and our comments have been published in The Age, Financial Review, The Australian, Herald Sun, Daily Telegraph, and the Courier Mail as well as radio interviews across the country.

Treasury and the Australian Banking Association should be congratulated for the loan deferral scheme, but it's only one example of the collaboration between stakeholders, including CAFBA, to provide fast and necessary responses to challenges that we had never seen before. Indeed, as business was starting to slow due to the pandemic, CAFBA's activities ramped right up and our level of advocacy and engagement has not relented all year.

Of course, none of this has happened without the collaborative efforts of a hard-working and enthusiastic Board, and I particularly thank our Vice President, Matthew Atkin, Treasurer Ian Elkner, Company Secretary Terry Moody, and board members Domenic Lo Surdo, Sharon Piening, Neil Ferguson, George Karam, Renee Tocco and Mike Steel. Every member of the Board has worked both collectively and individually on projects and sub-committees and I thank each of them for the time and output they have volunteered and contributed.

In quick summary, CAFBA has been a vocal contributor to Treasury, the Reserve Bank, the Australian Banking Association, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), the Australian Finance Industry Association (AFIA), AFCA, ASIC and has had direct engagement with the leaders of each of those organisations. We thank each of those bodies for the unfettered access and collaboration that CAFBA enjoys.

Great organisations only succeed when the leadership group works cohesively, and that's where I make special mention of our CEO, David Gill, with whom I enjoy a seamless and positive working relationship and a genuine friendship. The entire profession benefits from David's calm stewardship and his wisdom, and I

2

Annual Review 2019-2020

know the incoming President and Board will continue to embrace his great work and foresight.

We have also established Commercial Lending Young Professionals (CLYP), overseen by Max McFarlane, which has been hugely successful in connecting younger members with our profession and is also a platform for diversity and growth.

It's also appropriate to make special mention of my CAFBA co-founder and Honorary Life Member, Terry Moody, who is also stepping down from the Board this year after eleven years of service. Terry and I formed a great bond when we merged our respective State bodies in 2008 to form CAFBA and I'm delighted he has been appointed Chair of the CAFBA Education Council, which will set the industry education standard with our Foundation partners and will oversee the continuation of our Certificate IV, our Diploma and the development of the Australian version of the international CLFP post-nominal education standard.

Since our landmark win over NCCP regulation extending into the commercial space in 2013 we have continued to identify and advocate against regulatory creep at all levels and we continue to be respected and heard at all levels of government.

We have advocated for our members at the Productivity Commission, we successfully argued and achieved the exclusion of asset finance from the Sedgewick Remuneration Review, and in the Royal Commission that was highly critical of some areas of finance, CAFBA's members and standards were rewarded with a clear exemption from regulatory change and our recommendations to the Commission were adopted in full.

The formation of the CAFBA Education Council is a huge achievement which has been a personal and a Board objective for many years. Having our own courses and content at certificate, diploma and postnominal levels not only sets us apart from other associations, but it provides a clearly laid out career path across the whole of commercial finance to attract new entrants and provide industry succession and certainty. It also allows us to set minimum standards which provide better outcomes for both borrowers and lenders and underlines our capacity to selfregulate.

CAFBA is now a strong and influential voice with over 1,000 members, dozens of affiliate members and is recognised by industry associations around the world.

Most recently we have formalised a bilateral crossmembership and collaboration memorandum with the National Equipment Finance Association (NEFA) of the United States.

As I mentioned in my opening comments, my term as President will end this year. I've been honoured to be CAFBA's President for seven of the last eleven years and have served on the Board of CAFBA and its Victorian predecessor, AAFA, for well over 20 consecutive years.

As a co-founder of CAFBA and a long serving President I'm incredibly proud and humbled to conclude my role with the legacy of those achievements.

I have had many messages of thanks for which I'm very grateful, but my own message of thanks is to all the members who have entrusted me to lead their professional body and speak on their behalf to achieve outcomes for them, their businesses and for their clients. There is no greater privilege than to be part of an outstanding professional body and have the honour of leading it, and for that I can't thank the membership enough.

Going forward I will have a continuing role as Chair of CAFBA's Advocacy Committee, continuing to work with the CEO, the incoming President, and the Board, and continuing to advocate for our members with the political and regulatory stakeholders with whom I've become acquainted over many years. I will also be a member of the Education Council.

The CAFBA Education Council is something in which I take great pride, but in reflection of the last eleven years there are so many other achievements I would like to briefly mention.

David Gandolfo CAFBA President

We have an enormously successful Women's Network Group, for which I congratulate Board member Renee Tocco, and we have awarded over 50 Women in Leadership scholarships. Female membership has grown from 8% to 27% over the last three years, and we have clearly started to achieve our aim of greater diversity across our profession.

3

Annual Review 2019-2020

CEO's Report They say expect the unexpected, but nobody could have planned for a year like this.

However, one thing the commercial finance industry has displayed over the years is its resilience and ability to adapt, and never have those traits been needed more than this year. breaking, as the Council has brought together all the major financial institutions to set the course for commercial finance education in Australia. The first task is to adapt the internationally recognised Certified Lease & Finance Professional (CLFP) designation to Australia. The CAFBA Board has appointed Terry Moody as the inaugural Chair of the Council, with Rob Ryan of FAST as Vice Chair. Both Terry and Rob have worked tirelessly to implement this vision, and we are incredibly grateful for their work. Terry will outline the vision and work of the Council later in this Annual Review.

In March when the effects of the pandemic were truly realised CAFBA had to quickly assess what this meant for our members and small businesses. These issues took much of our focus as new problems arose, however it did not detract on many of the initiatives we wanted to introduce. Certainly, the plan for the year in January looked much different than how it panned out, but as an Association we also had to adapt to meet member's needs.

The first was to provide detailed information to members, as there was a lot of uncertainty caused

by COVID-19. It was important to provide timely updates and let everyone know of the work we were doing to address these concerns. Lenders policies were changing rapidly in response to the events unfolding, and commercial brokers needed to be up to date when communicating with business clients.

A by-product was also many lenders withdrawing streamlined lending products, instead requiring fully assessed credit submissions. In some respects, this was an advantage to the experienced commercial broker, as embedded credit skills assisted many clients obtaining access to credit.

We are also very appreciative of our partnership with the Institute of Strategic Management (ISM) and the CEO Gerard Hermens, who provides much of the educative content and delivery of the CAFBA courses, which of course now include the entry level Certificate IV and Diploma in Financial Services, which both specialise in commercial and asset finance. As of July 2020 CAFBA, raised the minimum education standard for new members to the Diploma, which confirms our desire to raise the industry standards.

Education in our industry is paramount, and provides a pathway for new entrants, which is another key strategy of CAFBA to attracting a younger and more diverse membership. The formation of two sub-committees, the CLYP (Commercial Lending Young Professionals) and the Women's Networking Forum have been an outstanding success and greatly assisted with this strategy. These groups have been very ably led by Max McFarlane and Renee Tocco and we are incredibly grateful for all their work, as well as the committee members.

We did however see the need to aid in this area and arranged a series of credit skills workshops run virtually by Stuart Donaldson and John Sgambelluri.

These workshops were extremely well received, providing practical credit and analytical skills to the attendees. Such was the demand CAFBA has continued to run these workshops as the importance of sound credit skills for a commercial finance broker is crucial to their success. This detailed knowledge and the ability to analyse a client's financial statements allows the commercial broker to ascertain the most suitable finance product.

Another initiative this year to build on this strategy was to introduce an Internship Program through Outcome Life to place graduates in CAFBA member firms as interns for 12 weeks to understand and learn of a career as a commercial finance broker. As Terry Moody is fond of saying, this is “the greatest industry no one has heard of�, and by promoting

Education in commercial finance and professionalising the industry has always been a key pillar of CAFBA's strategic direction, and this year we continued with this work, with the formation of the CAFBA Education Council. In terms of professionalising the industry this is ground-

4

Annual Review 2019-2020

which has expanded to include all commercial brokers, and this has grown to be a very substantial and effective organisation. This is a tremendous legacy, but the Board did not want to lose their knowledge, experience, and continued enthusiasm for commercial finance.

career opportunities in commercial finance through universities will raise the profile. Our plan next year is to build on this and promote our education programs further.

In September we appointed Eddie Wellins as CAFBA's Membership and Education Officer to dedicate time in explaining the value proposition of CAFBA Membership and promote the educational courses to attract new entrants to this profession.

Eddie has experience in these fields and will prove a valuable asset.

Therefore, at a Board meeting in October both David and Terry were appointed Patrons of CAFBA, with David being made Chair of the CAFBA Advocacy Committee and Terry continuing as Chair of the CAFBA Education Council. They will be invited to attend Board meetings and assist in any way required which is a tremendous outcome.

Of course, our lobbying work continues with governments and regulators to ensure the commercial finance market continues to operate efficiently and without unnecessary impediments.

Our President David Gandolfo continues to lead the way with this, and as Deputy Chair of the Council of Small Business Organisations of Australia (COSBOA) has invaluable contacts in government to access and prosecute our case.

Whilst their continued contribution is immeasurable, the whole CAFBA Board has contributed significantly this year, and we are grateful to have a Board of such high calibre, and I thank them for all their support.

It has been a challenging year, and I am sure we will have more challenges ahead, but the Association is well placed to meet these as they arise.

As the effects of the pandemic unfolded, a growing issue was the availability of credit, and unaffected small businesses being able to access new lending.

David's work with the Australian Small Business and Family Enterprise Ombudsman continued to work through these issues to ensure all levels of government were aware of what small business were facing. The government's overarching intention was to ensure the economy was sufficiently stimulated to not let the nation fall too deeply into recession, so the balance of lenders credit policies and the governments stimulus packages was extremely important. We were pleased with the governments tax incentives for equipment purchases in the federal budget, as we had called for this in our Pre-Budget submission.

David Gandolfo's work with Government cannot be overstated.

David Gill CAFBA CEO

This year there will be a changing of the guard on the CAFBA Board, as the rules under the Constitution require a rotation of directors.

Consequently, the terms of David Gandolfo and Terry Moody are up, and rather than stand for reelection they have decided to stand down to make way for others, which will create positions for younger board members. This underlies David and Terry's selfless work on behalf of CAFBA. As most would know in 2008 David and Terry brought their respective State bodies together to create a national association for commercial asset finance brokers,

5

Annual Review 2019-2020

Board of Directors President & Honorary Life Member David Gandolfo Quantum Business Finance VICTORIA

Vice President Matthew Atkin Atlas Equipment Finance VICTORIA

Company Secretary & Honorary Life Member Terry Moody Moody Kiddell & Partners NEW SOUTH WALES

Treasurer Ian Elkner Centrepoint Finance VICTORIA

6

Annual Review 2019-2020

Board of Directors Committee Member Domenic Lo Surdo Stamford Capital Australia Pty Ltd NEW SOUTH WALES Committee Member Neil Ferguson Ledge Finance Limited WESTERN AUSTRALIA

Committee Member Mike Steel RLA Finance Australia QUEENSLAND

Committee Member Sharon Piening The 500 Group VICTORIA

Committee Member Renee Tocco Loanezi QUEENSLAND

Committee Member George Karam BF Money NEW SOUTH WALES

Chief Executive Officer David Gill CAFBA 7

Annual Review 2019-2020

The first reaction by the government at impending economic turndown was to introduce a stimulus package to encourage investment and put back more money to the economy, the key feature of which was a temporary increase of $150,000 for the Instant Write -off.

5. Legislation, Regulation and Lobbying under COVID-19 The year began with a full agenda of issues that we planned to pursue, but of course that significantly changed in March when the effects of COVID-19 were fully appreciated. Uncertainty was paramount, and at the forefront was economic and physical survival.

Government policy then turned to financial relief to free up capital which was also intended to boost the liquidity and reserves of businesses and put money into the economy.

An economic downturn appeared imminent, and lender policies were rapidly changing, and the first course was to keep on top of these changes and effectively communicate them to our members, with a dedicated section on our website to house the various lender policies.

Behind the scenes, the government was working on initiatives with the banking sector to encourage SME borrowers to invest which assists economic growth, however there were also initiatives for lenders to increase funding, and not to restrict it. The Reserve Bank established a Term Funding Facility to offer 3-year funding to Australian deposit-taking institutions (ADI's).

Our focus for engagement quickly turned to the relevant participants as access to finance became a growing issue.

The purpose was two-fold:

During this period, we had constant communication with not only lenders but also with Anna Bligh at the Australian Bankers Association, AFIA, ASIC, APRA and the Treasurer's Office. As we obtained outcomes, we provided updates via the members only section, as they involved things like lender Clawback policies and AML verification procedures, where face to face contact was no longer possible.

• To offer lenders a lower cash rate by reducing funding costs, which in turn reduces interest rates for borrowers.

• To encourage ADI's to expand their lending to businesses, with incentives stronger for SME's.

This provided additional funds for lenders at cheaper rates to assist economic growth. Should the lender increase their total credit over the initial period, there was an additional allowance set at 5 times the dollar increase in SME credit outstanding – a tremendous boost for lenders to extend further credit, and we encouraged ADI's to take advantage of this and assist SME's through this period.

A great strength of the CAFBA Board over many years has been its ability to effectively lobby and communicate on issues that not only affect its members but also on small business finance and the wider economy. The reason for this is the Board is made up of CAFBA members who run their own businesses, and therefore are at the frontline to identify issues and knowledgeably prosecute the case for change. We do not engage professional lobbyists who do not have the industry expertise to enunciate the myriad of issues that confront us.

At the same time the Australian Bankers Association (ABA) was working with Treasury and was able to announce a financial relief package that allowed for deferment of payments for six months (with interest capitalising), which was a major step and a welcome relief for all businesses. All rhetoric at this time was that it was prudent for business to protect cash flow as the future could be uncertain. Thousands of businesses acted on this advice, whether they needed financial relief or not, as it seemed the most responsible course to take.

It is at this point we must again acknowledge the work President David Gandolfo did on behalf of members, taking the industry lead to liaise with government and communicate the issues and roadblocks to keep the economy moving – it was truly a monumental effort by David.

The government's overarching objective was to keep pumping money through the economy, and incentives to businesses to invest, capital incentives to banks, and deferral of loan payments were all designed to boost the liquidity and put money into the economy and into the hands of business owners.

And whilst we were in constant touch with lenders, who were adapting rapidly to the changing landscape, but also with government who were adopting policies to continue to stimulate the economy.

9

Annual Review 2019-2020

All these programs, plus others such as JobKeeper, aligned perfectly with the government's objectives.

available for lending had been approved. What the data does not reveal is how many applications had been made and how many had been declined. The government has now announced an extension of this program, where the cap on loan size was lifted to $1 million, and the program extended to June 2021.

Further changes include having the term extended to five years (up from three years) with payment holidays optional. These are all welcome changes, but again the effectiveness is diminished if lenders will not approve the loans.

However, this was where a major disconnection occurred. It was not explained that any business that took this prudent approach and deferred repayments would be denied access to immediate future borrowings. While some lenders took the correct view that this is actually a boost to businesses that are still trading viably and have continued to lend without policy change, other lenders denied credit altogether, and provided future borrowings only if the business elected to come out of deferment, and some withdrew existing pre-approvals if the client was in any deferment, whether they opted in or not.

There also seemed a reluctance to lend due to possible future ramifications by the Australian Financial Complaints Authority (AFCA).

To counter this the Treasurer varied the authorisation conditions for AFCA's scheme to limit the matters that AFCA can consider in relation to certain decisions made by lenders under the Coronavirus SME Guarantee Scheme. This amendment limited AFCA's ability to consider decisions made by the lender about whether to provide a loan (and the amount of the loan) under the Coronavirus SME Guarantee Scheme and ensure that when making assessments or determinations about a complaint, AFCA gives consideration to the impact of the coronavirus on the economy and the intent and requirements of the Scheme. The amendments to AFCA's authorisation conditions also applied to the decisions made by lenders (all lenders and not only those lenders that are participating lenders under the Scheme) to approve repayment deferrals for businesses in response to the coronavirus crisis. The amendments excluded from AFCA's remit complaints in relation to decisions by lenders to offer repayment deferrals to businesses impacted by the coronavirus, and any consequential change to the amounts payable under the loan or the duration of the loan.

This policy had a detrimental impact and was at direct odds with the incentives that the government provided to banks to do their part in fitting with the overall agenda. To be fair, some banks led the market with their policies and response, but those who impeded lending also impeded the economy. It was CAFBA's view that each credit application needs to be assessed on merit, and the rhetoric of government, the ABA and senior bankers needs to be reflected at the operational level.

CAFBA does not endorse bad credit decisions, only sensible ones that reflect the circumstances, and a blanket policy to deny future borrowings in not sensible.

Therefore, CAFBA took this up with the Australian Bankers Association and the Government, to ensure the overall strategy was aligned. CAFBA provided the Treasurer with specific examples where the breakdowns in “translation of policy” led to obstacles for businesses at customer level.

CAFBA also put a list of questions to the major lenders on issues affecting commercial brokers, including the above to obtain written policies that can easily be compared. We would then prosecute our case for more equitable policies that affected the way we do business.

The Federal Budget was handed down on the unfamiliar date of 10th October, which contained some welcomed news.

CAFBA also communicated our concern to Government about the poor take-up of the federal government's SME coronavirus loan guarantee scheme. The government allocated $40 billion for this scheme, which would be guaranteed 50% by government, and approved 44 lenders to distribute these loans to small business that needed cashflow. During the scheme Treasury data revealed that under the original settings only 15,600 loans worth 1.5 billion of the $40 billion

In our Pre-Budget Submission CAFBA recommended that the Australian Government should ensure the 2020-21 Budget: • establish a long-term instant asset tax write-off policy.

• continue a business investment allowance to encourage capital investment

10

Annual Review 2019-2020

• amend existing legislation to make available assets eligible for tax incentives that are currently denied due to internal company structures.

reforms and outcomes that our members are seeking.

The Executive prosecutes CAFBA positions on a range of key issues but also advocates for the commercial finance industry, including lenders where there is a common interest.

• defer the increase of the superannuation guarantee until business has recovered.

CAFBA also engages equally with both the mainstream political parties, as we follow policy, not politics. CAFBA is a member of the business forums of both the Liberal Party and the Australian Labor Party and equally contributes to both, and regularly meets Ministers and Shadow Ministers and advisors in the relevant financial portfolios.

• Treasury to work with lenders to encourage support for small business loans to make access to credit easier for small business, particularly the SME Guarantee Loan • continue to defend company tax cuts; and • support industry associations to advise the Government.

We have also taken a leading role in advocating for access to finance for small businesses. We know that finance is an enabler and many of the clients of our members are small businesses. There are over 2 million small businesses in Australia, which employ more than 4.8 million people and contribute nearly 380 billion dollars to the Australian economy, so our member's part in this is extremely important. We take this role seriously and have worked to argue against impediments or bad policy that is not in the interest of our members, the commercial finance market and the economy at large.

and of course, we were pleased with the result. The Budget contained positive news on the Instant Asset Write Off (IAWO). In summary: • IAWO is extended to 30 June 2022 • Eligible businesses with aggregated turnover < $5bn (was < $500m) • No cost threshold (currently $150k) • Applies to second-hand assets for small and medium businesses ($50m turnover) • Small business entities can write-off balance of small business pool This year ASIC published the regulatory guidance to assist in the application of the new Best Interests Duty (BID) for mortgage brokers, which comes into effect in 2021. It was important to note at this time that BID does not apply to commercial transactions, and whilst we support the principals of BID ASIC has confirmed they do not apply to commercial brokers. It is important to note however that CAFBA's professional standards address standards comparable to the best interests' duty. This reinforces CAFBA's continued policy of distinguishing the activities of consumer mortgage brokers to commercial brokers.

Anthony Albanese and David Gandolfo

CAFBA continued our engagement with the Reserve Bank of Australia (RBA). For whilst the RBA can obtain economic data, they need much of the anecdotal evidence on the economy, and the reasons why businesses may not be investing.

The CAFBA Board recognise the importance of consistent and persistent advocacy of our members' views. We believe that through maintaining an ongoing campaign to influence and connect with key players in the policymaking process, we will be able to deliver

David Gandolfo and Terry Moody

11

Annual Review 2019-2020

6. Commercial Finance Market Overview 6.1 Commercial Property Debt Market Update Wow what a year!

Well the 2019/2020 financial year in the commercial real estate debt capital market started well enough. The residential markets were in a strong recovery phase following the declines experienced in 2018/2019.

Commercial markets were equally buoyant with a good level of activity in the leasing and sales markets. Business confidence was good and credit markets were open and functioning well with active participants from the banks to the non-banks.

But then came Covid-19. Our economy has subsequently fallen into recession for the first time in 30 years and the health and economic impacts of Covid-19 have been felt all across the world and are continuing to impact all markets. The commercial real estate debt and equity markets were immediately impacted by Covid-19 and adjusted very quickly – as they tend to do. What is yet to fully play out however, is the impact on the underlying residential and commercial real estate markets. Whilst the debt and equity capital markets adjusted very quickly the real estate markets are largely in a period of stasis facing some huge structural change driven by the pandemic. I'll comment on this later.

The real estate debt capital market halted in March/April 2020 when the onset of Covid-19 really started to take hold. Both the bank and the non-bank lenders stopped lending. In fact, we saw a number of lenders not only stop lending, but they pulled indicative offers and adopted a No New To Bank (NNTB) policy. We had not seen the NNTB policy rear its head since the Global Financial Crisis (GFC) in 2008/2009.

At the time Covid-19 became real, all the banks and nonbanks stopped lending, took a good hard look at their books. They went through all their assets (loans) and have provisioned where appropriate.

Importantly, and unlike during the GFC, the banks and the non-banks are all well capitalised. This has resulted in very little activity from the lenders in terms of enforcing their securities or accelerate repayments. And in my view, we are unlikely to see huge pressure from banks with respect to non-performing loans in the real estate sector over the coming years given their recent behaviour. The banks have done a stellar job so far for Team Australia in supporting borrowers who are under pressure. I am not so sure however, that the non-banks will be quite so patient.

None of this will become apparent until mid/late 2021.

There are a few fundamental reasons for this: 1. APRA has allowed the banks to defer valuations until March 2021 without impacting capital provisioning on their balance sheets.

2. The government continues to place a moratorium on directors breaching their duties under insolvent trading (Covid-19 Safe Harbour defence) and consequently this has reduced insolvencies in market (ironically to levels below a normal market let alone the fact that we are in a recession where you would normally see these insolvencies spike); and 3. Job Keeper and Job seeker payments remain elevated (albeit the government has indicated that these payments are likely to be reduced/removed through 2021) – probably saving many businesses (so called “zombie companies” from collapse) and the flow on effects into commercial real estate remains unknown.

The major distinction between the GFC and the Covid-19 event is the GFC was largely a liquidity issue where the Banks and the Non-Banks effectively had a credit squeeze.

The federal government here and the reserve bank as well as those across the world learnt from the GFC and immediately post Covid-19 onset, stepped in to pump the banking market and the broader economy with liquidity and this has flowed into the non-bank market in terms of liquidity and confidence.

The Covid-19 event has created a demand problem – migration has stopped, there is no inbound international tourism or foreign students and almost 1 million people are unemployed, and many businesses are suffering or remain closed. Property developers are nervous about developing apartment stock, tenants are concerned with committing to long term leases given the lack of activity in the underlying economy and landlords are nervous about capitalising on their assets given rental pressures and looming vacancies in many sectors – particularly pubs, hotels, student accommodation, retail and commercial assets.

Furthermore, real estate market participants are facing, in my view, the single largest structural change to the underlying demand for space in the last 100 years. There has been many articles written on the demise of the office, the shift to on-line retailing and the impact that this will have on retail investments, the Work From home (WFH) / Work From Office (WFO)/ Work From Anywhere (WFA) phenomenon and what that means for society the suburbs, our cities and our regions. People have re-

12

Annual Review 2019-2020

6.2 Commercial Equipment Finance Market The following statistics have been provided by the Australian Finance Industry Association (AFIA).

assessed their lives and their need to commute and work or shop in destinations anywhere other than online. It is not my intention to comment on the underlying structural shift in commercial and residential real estate BUT this is the single greatest impact on credit decisions being made in the banking and the nonbanking system. The credit departments and investment committees of our lending partners are all taking a good look at their lending parameters and the short and long term impacts that COVID 19 will have on the real estate markets and the risks that this poses to borrowers and the debt capital market over the next few years.

Encouragingly come late May / early June it became apparent that we were not facing a liquidity crisis or a credit crunch. The banking market stabilised. The nonbank market returned with a great degree of enthusiasm and even over the last few months we have witnessed non-bank capital interests / margin costs falling. The banks are being ever selective with credit and remain vigilant, however where a credit is prime with good risk metrics â&#x20AC;&#x201C; strong sponsor, strong lease tail to quality lease covenant in the investment lending space or strong level of market risk mitigation in the construction space - through lease pre-commitment or presales, the banks will and are willing to fight for business.

As brokers our role is to fulfil the needs of our clients.

Encouragingly there is good liquidity in market and all of our clients will benefit from engaging with brokers given our knowledge of capital and in particular the growth in the non-bank market. The capital market in Australia is deep and very agile and the fact that interest rates are virtually zero and longer term bond yields are also near zero, we have witnessed strong capital flows into non-bank credit markets to invest in real estate credit â&#x20AC;&#x201C; particularly post Covid-19. This augers well for the commercial property broker â&#x20AC;&#x201C; the value add that we can provide to our customers has never been stronger in my view. And whilst demand and general activity remains subdued, I am somewhat optimistic about 2021 as confidence hopefully returns; the capacity to service our customers and the real value we can bring to them will only get better.

35.0%

General Equipment Finance Growth Areas 2018-2019 Office Equipment 30.1%

30.0%

Aircraft 20.2%

25.0%

Manufacturing 16.1%

20.0%

Domenic Lo Surdo Stamford Capital Australia Pty Ltd

15.0% 10.0% 5.0% 0.0% 1

13

2

3

4

5

6

Annual Review 2019-2020

Over the last year, there was a strong growth in a number of sectors on Equipment Finance, with the total market result weighed down by the fall in Cars & Light Commercial Vehicles.

This growth was predominantly in the first half of the financial year, with growth stagnating in the second half as the effects of COVID-19 became apparent.

Whilst we have continually stated that it is the aim of CAFBA to be the most relevant association for commercial finance brokers, membership numbers reflect the success of that relevance. Full membership grew 22% which represents new member firms, whilst individual broker membership (Associate Membership) grew 11%.

2019/20 was a tough year in equipment finance, with the market finishing 5% down on where it was last year.

Only Agricultural Equipment grew, at 10% year on year, while all other equipment types saw a reduction.

Equipment Finance Industry Aggregates Volume ($bn) General Equipment Finance Fleet leasing

2018/19 $40.9 $7.3

2019/20 $38.9 $6.7

Total Equipment Finance

$48.2

$45.6

Receivables ($bn) General Equipment Finance

2018/19

2019/20

$86.7

$86.7

7. CAFBA Membership Over the 2019-20-year CAFBA membership has grown significantly, in both broker member and affiliate member categories. Whilst this in some way reflects the decision to expand membership to all commercial brokers, it also reflects many existing brokers view that CAFBA is more aligned to their activities, and better represents the issues that a commercial finance broker faces. Hence many new members have joined from other associations.

Whilst it is pleasing that existing commercial brokers are joining from other associations, a key strategy of CAFBA is to provide resources and assistance to brokers that are new to industry. With the introduction of the Certificate IV and Diploma in Commercial Finance, many new to industry brokers over time will join CAFBA with the right credentials to be professional commercial brokers. As of 1st July 2020 CAFBA, also introduced a new category of membership called Provisional member, to cater for those members who

14

Annual Review 2019-2020

however as in the past we need sponsors to assist with the balance of the program fees. The level of sponsorship obtained will depend on the number of scholarships available.

needed to obtain the new educational requirement of the Diploma. Provisional members have 12 months to meet this higher educational standard.

Affiliate membership also continues to grow as organisations that provide funding or services to the commercial finance industry see the value of CAFBA membership. The majority of these are a range of lenders, from traditional equipment financiers to cash flow financing and fintech providers, all of whom at different times will have products that may suit the broker's clients. However, CAFBA is also being supported by many non-lenders that can provide services to the brokers like marketing companies, software providers, accounting services and equipment valuers. All these organisations provide additional resources for the broking members to call on in need, and CAFBA appreciates the support provided by its Affiliate Members. A full list of Affiliate Members can be seen in previous sections of this Review.

CAFBA can only provide these scholarships with the assistance of our affiliate members, and we are incredibly grateful to the following who generously invested in these scholarships this year.

• ANZ • BOQ Finance • FAST • NAB • PROSPA The scholarship recipients for 2020 were: Leading-Edge Program • Jenna De-Giorgi – Centrepoint Finance • Prerna Mehta – PROSPA • Tania Hatch – North Asset Finance • Lauren Murray – Credit One • Melissa Amai – Credit One • Amanda Ceaser – Stamford Capital • Ilze Jansone – Stamford Capital

8. CAFBA Women in Leadership Scholarship program A core strategy of CAFBA is to increase the representation of women in commercial finance.

Executive Ready Program • Brianna Larsson - Loanezi • Milena Franjic – QPF Finance • Parvina MacKellar – Ledge Finance

One of the great successes of CAFBA over the past few years has been the success of the Women and Leadership Australia (WLA) scholarship program.

Advanced Leadership Program • Sofie Chapman – Commercial Finance Solutions • Sharon Piening – The 500 Group

This is the fifth year that CAFBA has undertaken this initiative to address gender imbalance in our industry and so far, 54 women have completed the courses, with outstanding success. The recipients of these scholarships over the last 5 years have spoken about how beneficial the program has been, both personally and professionally. Over the last 3 years CAFBA female membership has risen from 8% to 27%, and we believe these programs have significantly contributed to this.

The benefits of the scholarships are explained below by a few of the Class of 2020.

Parvina MacKellar

I have recently completed the WLA Executive Ready program thanks to a scholarship provided

by CAFBA.

The aim of these courses is to unlock potential, reflect and open networking opportunities to learn from women across finance and other industries.

I would like to thank you and the CAFBA board for bestowing me such an incredible opportunity. The course has had an impact on my career and confidence I didn't anticipate. The content was relevant, empowering, and necessary – I would highly recommend it to all women wanting to further their careers.

The scholarships are arranged through WLA and the courses are conducted in conjunction with the Australian School of Applied Management.

There were scholarships available to women across WLA's three leadership development programs.

I am very grateful to have been able to represent our industry in the course.

The scholarships cover part of the cost of the course,

15

Annual Review 2019-2020

I encourage any women who is seeking a different perspective or to learn new ways to lead, and I can assure you, doing a leadership course through WLA will absolutely teach you things you never knew, I certainly had a lot of AHA! moments. I have watched videos and content where it has even had a big impact in my personal life too! This will not be a course you will forget.

Bri Larsson

It was an incredible honour and blessing to be awarded with a scholarship from CAFBA. It was almost a bit surreal, only had I just been exploring options of advancing myself in my leadership skills through some sort of structured training or educational course.

Milena Franjic

The course came at the perfect time as we were stepping into a new season of growth within the company and were hiring and onboarding brand new staff into newly developed roles and the course gave me the much needed skills and ability to implement a new leadership based onboarding and performance management process.

Building on the knowledge I gained throughout the Leading Edge program last year, the Executive Ready program was another valuable learning experience for me.

Throughout this program we built on the foundations learnt previously, which I found really useful as it provided an opportunity to delve further into different areas of leadership as well as professional and personal development, that really interested me. Outside of the learning, you are exposed to a group of women who all come from different professional backgrounds, working across an interesting variety of industries.

During the course you are provided with opportunities to expand on your network and form relationships with other participants, which adds to your own knowledge and development as you gain exposure to different perspectives and ideologies. I found this to be a really interesting journey and would recommend to anyone who is interested in stepping outside of their comfort zone and learning something new.

I found it quite honourable to be grouped with other executives completing the course from the Northern Territory Police, RAAF (Royal Australian Air Force), The Climate Change Foundation and Headspace Northern Territory. Working with other powerful women who are driven and determined to lead people was really motivating and inspiring. Every single one of us was on a different walk and journey through our careers. We offered each other support and feedback when needed and with the huge diversity of roles and industries it was all so valuable to take onboard and practise.

The learning content was highly relevant and to me was like treasure or gold! The course ran for around five months and was structured in a way that the program map ticked off all the crucial elements of being an equipped leader from an executive position.

There was a series of full day webinars, short webinars and module content that was to be completed in our own time and activities to apply within work hours.

The full day webinars prior to COVID were face to face seminar style, however we were limited to take advantage of the digital tools such as Zoom and completed these days online. I am not going to lie, it was not easy as you can imagine a full day on Zoom, for the students and the facilitators, however we managed very well with multiple breaks, physical stretching and interactive activities. We were not going to let COVID impact our opportunity to grow and be strengthened, especially in leadership.

Amanda Ceaser

It was a great honour to be selected to receive the 2020 CAFBA Women in Leadership Scholarship for the WLA Leading Edge course. It came at the perfect time not knowing what 2020 was going to bring.

Taking part in the WLA Leading Edge course has equipped me with the necessary skills to grow into a great inspirational leader.

Starting from day one, I met some wonderful women who were all at different stages in their careers. The course allowed a lot of opportunity for support and feedback not only from the facilitators but also other women taking part in the course. I found it to be a

16

Annual Review 2019-2020

events (pre Covid) are held in all the mainland capital cities. To assist in hosting and organising these events, and also to succession plan next generation of female mentors, CAFBA called for female State champions to foster and grow these networking opportunities in each state, led by our Board Director Renee Tocco.

great learning experience, learning a lot about myself but also how to interact with others better.

I found all the content to be really valuable especially in today's world where more women are stepping into leadership roles that may have not previously done so because they lack the skills or confidence to. The course had a good flow to it where you learned some invaluable tools from the first full day workshop which were built upon and used in different ways for the subsequent workshops finishing with a workplace application project presentation at the end.

The State Champions are: • QLD - Milena Franjic • VIC - Jane Lorimer • NSW - Tina Clark • SA - Jessica Araia

Unfortunately, due to COVID all the courses were held via ZOOM webinar, so we missed out on the face to face interaction which I did find to be a bit difficult.

Normally the 2 full day workshops, 1 at the beginning and the last are held in person. However, given the circumstances we learned to adapt and grow regardless. Even one of the course modules was titled Leading in Times of change.

• WA – Jade Morgan CAFBA is exceptionally proud that five (including Renee) of these women are previous Women & Leadership Scholarship recipients, amplifying the resounding success, quality and necessity of the scholarship program.

Renee was also elected in 2019/2020 to assist with the start-up of another new Subcommittee for CAFBA called CLYP, Commercial Lenders Young Professionals.

CLYP was established to focus on encouraging more young people into the finance sector and also foster greater cultural diversity and inclusion.

Whether you are looking to move up in your role and pursue a path in a leadership position or just looking to upskill, I would highly recommend this course as it has some invaluable tools you will not only use in your professional life but your personal life as well. For me personally, the emotional intelligence and how to deal with conflict were some very valuable learnings.

The Women's Forums and CLYP have been supporting one another through the COVID period with collaborative online webinars and events, the attendees of these groups have come together, shared support and continued the incredibly important impact and areas of focus for the survival and development of our robust and immense industry.

Thank you again to my company for supporting and nominating me to apply for the scholarship and CAFBA for continuing to support women in the industry.

9. Women's Networking Forum

The travel ban during COVID concerned Renee and the CAFBA state champions greatly, and they placed a great emphasis to ensure that all the past attendees and female members continued to feel supported and connected. This support was given in the form of emails, supportive quotes and content, offering a listening ear and regular outgoing calls to the solo operators. This extra care and support was very well received and reinforced the great impact we are having.

CAFBA recognises gender equality to be one of the biggest hurdles to shared prosperity in Australia.

The commercial finance industry was historically heavily weighted towards males, reflective of the industry's banking origins. As an organisation, CAFBA felt it was essential to take steps to address the gender imbalance in our industry and the first step to this was to initiate scholarships for female members to reach their potential.

CAFBA's belief is that it is the sacred responsibility of our member organisations and our current female members with the support of all our male counterparts to explore and break down the barriers preventing women from reaching more managerial and leadership positions. While women, who currently represent 52% of the Australian workforce, enter the workforce in equal numbers to men and typically aim for senior management positions; the challenge of

Following the success of this scholarship program, CAFBA introduced its first series of women's networking events in March 2018, coinciding with International Women's Day. These events had such an overwhelming response that CAFBA continued to host these 3 times a year with incredible sponsor support from our member organisations. These networking

17

Annual Review 2019-2020

maintaining an authentic leadership style in the face of a mostly unconscious bias can at times become an excessive price to pay for success This is so critical for Australian and global companies, it is not only a moral responsibility, it is also critical to sustained economic growth in our industry. Gender equality is seeing males and females as being of equal status and value. It is judging a person based on their merit. We need to retain and support women progressing to senior management positions and ultimately the board, as women have a proven positive economic impact on an organisation's bottom line.

This is not just about gender balance and equality, but about enhancing company decision-making through best use of all available perspectives, ideas and skills.

The CAFBA support for this networking group once again reiterated the emphasis CAFBA places on addressing the gender imbalance in the finance industry. As our board member Renee Toccos remarked: â&#x20AC;?I feel incredibly supported and honoured to be part of this crucial metamorphosis and hope that I can in my small way encourage more young females into the Finance Industry, allowing females to reach their true potential. The reality is that women amount to 46.9% of the workforce in Australia, 13.7% of chair positions, 25.8% of directorships, 30.5% of key management and 17.1% of CEO's. These figures show that females are still underrepresented in decision making levels across corporate and public sectors in Australia.â&#x20AC;?

The Women's Networking Events are now a core fixture on the CAFBA calendar.

18

Annual Review 2019-2020

The second event saw our sponsors Connective Asset Finance and Zip Business, along with other standout speakers talk about how to find and fund opportunities during these testing times. The event was very well attended and shows the young commercial finance brokers are keen to do business.

10. Commercial Lending Young Professionals – CLYP “CLYP (Commercial Lending Young Professionals) is the national networking group from CAFBA for people working in commercial finance that are under the age of 40. CLYP aims to connect and support young professionals currently working, or looking to work in, commercial finance, through networking and professional learning opportunities.”

Whilst CLYP itself as a sub-committee of CAFBA is new we are proud of our first full year and extremely excited to see what the future holds.

I would like to thank all the CLYP Committee for their passion and contribution this year.

CAFBA recognises that the commercial finance industry is aging, and a core strategy is to attract new and more diverse entrants into the profession, which includes young people. An important step to achieve this is to create an educational pathway for new entrants to professionally train and upskill to become commercial finance professionals. With the courses developed so far, the Certificate IV and Diploma we have achieved a major component of this goal.

However, another key component is to provide networking and support, which is the genesis of CLYP, which is extremely well led by Max McFarlane, and we thank him for his continued work.

Commercial Lending Young Professionals (CLYP) Commitee

From Max McFarlane CLYP Chair The Commercial Lending Young Professionals (CLYP) committee has had an outstanding first full year up and running, even with a global pandemic and economic recession aside.

Amanda Ceaser

Carla Reynolds

Himanshu Batra

Jarrod Moore

Jordan Wilson

Leigh Sharpe

Renee Tocco

Sam Houselander

Sofie Chapman

In March we were fortunate to have networking events in Sydney, Melbourne and Brisbane just a week before the lockdowns. Little did many of us know that it would be the last in person networking event for a while! Even still, CLYP has powered ahead and organised and managed two standout events in 2020.

The first event had Peter Munckton, the Chief Economist from BOQ present to young brokers and talk about the changing interest rates over the “past five thousand years” and what implications the changing economic environment meant for them and their clients. Still a topical discussion in an everchanging world. Peter is a very engaging speaker who simplifies the complicated world of economics, and we were grateful for his contribution.

19

Annual Review 2019-2020

It is essential that the industry has recognised qualifications that reflect knowledge and experience. The term “education” has become popular over the past few years, but it must be the right education. Lender seminars and workshops (or masterclasses) are important to increase knowledge, but they only go part of the way. They cannot be the substitute for a formal education stream.

11. CAFBA Education Council This year CAFBA was excited to announce the launch of the CAFBA Education Council to oversee the structure, content, and delivery of education in the commercial finance sector. The Education Council will be made up of representatives of the Foundation Partners, who are amongst the leading financiers in the Australian commercial finance market.

The learnings from the Certificate and the Diploma lead into the qualification of the CLFP. The Certified Lease & Finance Professional (CLFP) designation is the preeminent credential for equipment leasing and financing professionals throughout the world who have demonstrated competency through testing of knowledge, continuing education and a commitment to their business practices and dedication to the industry.

CAFBA's research showed that expanded educational offerings can attract a new generation of commercial financiers for whom a credential is a necessary first step. Gen Y and millennials are attracted to a profession that offers a credential and structured career path.

As we move towards further professionalism of the industry, having designated credentials recognises the education and professional standing of the commercial finance sector. In the aftermath of the Royal Commission and operating in a selfregulating industry, the need for an educated industry has never been more important.

Traditionally professional bodies such as CPA and CA accounting bodies lend weight to the professional qualification by requiring additional development and training. By its nature these require annual updates and certified professional development activities to maintain professional accreditation.

Universities tend not to focus on these aspects and generally deliver the baseline qualification – post nominal – with an expectation that graduates join a professional association.

It is CAFBA's goal to expand the professional education program, which will be used to attract new and more diverse entrants to the profession by offering credentials and a structured career path into and through the commercial and asset finance profession.

The courses are: • Certificate IV in Financial Services (FNS41815): Specialising in Commercial & Asset Finance • Diploma of Financial Services (FNS51815) Complex Issues in Commercial Lending • An Australianised version of the US Certified Lease and Finance Professional course

The CLFP in the USA is the qualification sought by commercial finance professionals, whether bankers or brokers. The CLFP is relevant in all jurisdictions, as it demonstrates competency in a range of subjects in commercial finance. The CLFP is the only leasing industry certification program in the world.

To progress this CAFBA sought investment and input from industry participants, and the response was overwhelming. The Education Council is made up of the following participants, who will set the course for commercial education into the future.

Foundation Partner • CAFBA • FAST • Commonwealth Bank of Australia • National Australia Bank • Westpac • Scottish Pacific • AFG • Get Capital • Flexi Commercial • Macquarie Bank • Australian Industry Finance Association

Education will be held up as proof as the industry's ability to self-regulate commercial finance and deliver the prestigious professional designation – the Certified Lease and Finance Professional – with post nominals (CLFP).

Education will be the pathway to not only attract a younger and more diverse commercial financier into the industry, but also demonstrate the ability to uphold professional standards.

The Education Council has teamed with the Institute of Strategic Management (ISM), the industry recognised RTO who will deliver the programs.

20

Annual Review 2019-2020

Strategic Partner • ANZ • BOQ • Classic Funding • Zip • NFC Aggregation • Pepper Group Industry Partner • PLAN • Judo

12. CAFBA Aggregation Benchmark Report 2020 This year CAFBA released its first-ever 'Aggregator Benchmark Report 2020', which showed the commercial finance broker market share continues to grow yet professional education and industry standards need to be at the forefront for the industry to sustain this growth.

The inaugural report represents the first empirical data set available for commercial finance aggregation and will become an annual barometer of both commercial finance broker scale and market sentiment. A total of 11 aggregators participated in CAFBA's research, representing 11,490 individual commercial brokers and around 300,000 individual finance deals. With data collected from March to June 2020 some participants reported the early impacts of COVID-19. Over the years there has been a distinct lack of quality data on the commercial broking sector – despite its growing presence in Australian markets. It is critical to capture this data to help the industry continue to grow.

The Council will be led by CAFBA Patron Terry Moody as Chair and Vice Chair Rob Ryan, Head of FAST NSW/ACT & QLD. “By bringing industry together to have a coordinated approach and recognised curriculum will truly set commercial finance on the path to being a profession,” said Terry Moody.

The Education Council will be responsible to the governance of the Council and distribution of investment funds.

The Education Council will continually review content in all courses to ensure compliance, relevance and continued development, and investigate a structured mentoring program to ensure any new entrant is educated, qualified and capable to effectively deliver the commercial finance product.

According to the CAFBA Aggregator Benchmark Report 2020, in 2018/19 brokers helped small-to-medium enterprises (SMEs) access over 89,000 commercial loans and more than 199,000 commercial asset loans. Even during the COVID-19 pandemic, the outlook remains positive with an overwhelming 91 per cent of respondents expecting commercial loans and commercial asset finance loan volume to remain the same or increase in the next 12 months. SMEs are increasingly turning to commercial brokers for finance solutions according to the Report, with aggregator respondents transacting on average 22,638 of sub $1 million deals in 2019 and an average volume of commercial deals 8,155 in 2018-2019. An East & Partners Broker Channel Analysis commissioned by CAFBA in February 2020 found that 72.9 per cent of new commercial asset finance transactions are settled through commercial brokers. This is up from 67 per cent in 2017. SMEs value the professional advice, market coverage and deal speed that brokers can offer.

Increasingly they have relationships with their brokers rather than with individual lenders.

Each course will also be available in modules to provide training in areas of need. This provides ongoing specific training for staff of lenders and brokers.

Terry Moody

Rob Ryan

CAFBA has warned that as more residential mortgage brokers seek to diversify into commercial finance in the wake of the Royal Commission and the resultant changes to commission trail structures, the industry

21

Annual Review 2019-2020

urgently needs to address issues surrounding professional education and regulation. We see the trend for residential brokers transitioning into the commercial sector as one that will continue to grow, particularly in the current COVID-19 climate. The commercial finance sector is largely self-regulated, and it is critical that the industry acts to maintain its professionalism.

lockdowns withdrawn the Awards went ahead, with the Master of Ceremonies Michael Pope contributing a wonderful performance. Whilst virtual it was a fun evening and very well attended (via Zoom!).

Our Melbourne based Board were able to attend in person to announce the winners and â&#x20AC;&#x153;hand overâ&#x20AC;? the Awards. Thank you to David Gandolfo, Matt Atkin, Sharon Piening and Ian Elkner for contributing to the excitement.

According to CAFBA's survey respondents, commercial and asset finance deals currently account for just over 47 per cent of total aggregator business volume. A gap in aggregator training to assist brokers to diversify has been identified by CAFBA, with only 64 per cent of aggregators having minimum educational requirements to on-board brokers. Instead, aggregators currently rely on brokers years within the business, industry references and peak body membership.

A thank you also to our sponsors, Connective and FlexiCommercial, who made the evening possible.

13.1 Broker and Firm of the Year Award Finalists Firm of the Year (National) more than 5 brokers

First

This also highlights the importance of CAFBA's stringent minimum education, relevant experience and probity standards. As lines blur, education is clearly the path forward for our industry. One of our core objectives is to help the industry progress to a point where commercial finance broking is regarded as a stand-alone profession and provide a career pathway for finance professionals.

Moody Kiddell & Partners

Second Quantum Business Finance Third

Pacific Finance Australia

Broker of the Year (National)

First

Education is critical and must remain a priority for our industry. Aggregators need to help us uphold industry standards and support minimum education requirements and investment in training to assist residential brokers successful transition into the commercial space.

Mark Whitla

Second Paul Drummond Third

Quantum Business Finance Translease

Joel Quartermaine Pacific Finance Aust

Emerging Broker of the Year (National)

The full report can be viewed here.

First

Jacob Dries

13. Awards Second Gino Defeo

In 2018 CAFBA decided to incorporate our traditional Financier of the Year Awards with our own Broker awards, to commemorate the 10th Anniversary of CAFBA, which instantly became a success. The announcing of these Awards coincided with our Annual Conference and Awards evening, which was very well attended.

Third

Moody Kiddell & Partners Quantum Business Finance

Kristina Alexopoulos Moody Kiddell & Partners

13.2 Women in Leadership Award The Women in Leadership Award was offered for the second time this year, and was open to recipients of the CAFBA scholarship program who had undertaken one of the Women in Leadership courses.

Of course, this year with COVID-19 everything changed, and the scheduled Conference and Awards night was cancelled. This however did not dampen our enthusiasm to continue with the Awards, which were held virtually in early December. If nothing else this industry proves its resilience.

First

With a studio available at the Crown in Melbourne and

22

Renee Tocco

Loanezi

Second Brianna Larsson

Loanezi

Third

Stamford Capital Aust

Amanda Ceaser

Annual Review 2019-2020

CAFBA would like to congratulate not only the recipients, but all our Affiliate Members for their contribution.

13.3 Financier of the Year Awards CAFBA surveys members annually to ascertain the CAFBA Financier of the Year. All the major Australian financiers are Affiliate Members of CAFBA, who provide an important service to the broker community.

CAFBA recognises this contribution and works closely with the financiers for the benefit of the commercial and equipment finance industry.

The Financier of the Year award is keenly sought by the commercial finance lenders. The voting categories of these awards have remained the same since their inception. The categories to vote on the Financier of the Year are: • Service • Attitude • Documentation • Pricing

13.4 BDM of the Year CAFBA also awards a Business Development Manager (BDM) of the Year in each State, to acknowledge the work and service that the BDM's of the Lenders provide to the commercial brokers. Over time we believe this award will become just as prestigious and as keenly sought as the Financier of the Year.

The results of the BDM of the Year awards are: 2020 - BDM of the Year Finalists

New South Wales

The results are as follows: 2020 Finalists - Financier Awards Financier of the Year (National) First

Westpac Equipment Finance

Second

CBA

Third

BOQ Finance

Metro Finance

Second

Westpac Equipment Finance

Third

BOQ Finance

BOQ Finance

Second

Westpac Equipment Finance

Third

CBA

Second

Connective

Third

College Capital

Patrick Netrayana

FlexiCommercial

Third

Steve Dilworth

Westpac

First

Peta Clark

ANZ

Second

Zoe Mylrea

Pepper Finance

Third

Rolando Taviani

BOQ Finance

First

Gary Walker

BOQ Finance

Second

Trevor Webb

St George

Third

Hayden Lever

Westpac

First

Chris Vogias

Capital Finance

Second

Craig Fraser

Metro Finance

Second

Frank Ikic

ANZ

Second

Paula Tirpkos

CBA

Western Australia

Aggregator of the Year Consolidated Operations Group

Second

Victoria

This year CAFBA also introduced two new awards, to recognise the best Aggregator and also the Best Fintech Lender.

The winners of these Awards are as follows: First

Metro Finance

South Australia

Credit Team of the Year First

Mark Hoban

Queensland

Settlement Team of the Year First

First

First

Tony Salvia

CBA

Second

Tony Bruns

FlexiCommercial

Third

Damian Hatchley

NAB

FinTech of the Year First

Get Capital

Second

Moula

Third

Prospa

23

Annual Review 2019-2020

Awards

Virtual Awards Evening Michael Pope Host of the Virtual Awards

Ian Elkner at the Virtual Awards

Sharon Piening announcing winner of Settlement Team of the Year

Presenters with Financier of the Year Trophy

Winner of Firm of the Year (National) more than 5 brokers

24

Annual Review 2019-2020

Awards

Virtual Awards Evening Crew behind the scene making it all happen

Matthew Atkin Announcing Financer of the Year

David Ganolfo Anouncing Service to the Industry Award

Sharon Piening, David Gandolfo, Matthew Atkin & Ian Elkner

25

David Gandolfo, Brent Starrenburg and Ian Elkner

Annual Review 2019-2020

NSW Golf Day

26

Annual Review 2019-2020

NSW Golf Day

27

Annual Review 2019-2020

NSW Golf Day

28

Annual Review 2019-2020

Financial Summary Statement of Financial Position as at 30th June 2020 2020 $

2019 $

716,191

484,389

38,525

57,632

825

22,847

Total Current Assets

755,541

564,868

Total Assets

755,541

564,868

NOTE

Current Assets Cash Assets Prepayments Receivables

4

Current Liabilities Creditors & Accrued Expenses Income Received In Advance Income Tax Payable GST Liabilities

9,496

21,490

356,295

214,329

18,203

-

20,695

2,235

Total Current Liabilities

404,689

238,054

Total Liabilities

404,689

238,054

Net Assets

350,852

326,814

Equity Retained Surplus

350,852

326,814

Total Equity

350,852

326,814

29

Annual Review 2019-2020

Statement of Profit or Loss and Other Comprehensive Income for the Financial Year ended 30th June 2020 2020 $

2019 $

959,316

922,130

(256,053)

(288,411)

(32,665)

(51,657)

(3,000)

(2,520)

(97,401)

(90,211)

(19,635)

(59,128)

(266,998)

(306,603)

(38,607)

(11,142)

(27,839)

(30,520)

(97,810)

(69,112)

(77,067)

(53,716)

(917,075)

(963,020)

Profit from Ordinary Activities before Income Tax

42,241

(40,890)

Income Tax attributable to Operating Profit/(Loss)

(18,203)

–

24,038

(40,890)

–

–

24,038

(40,890)

NOTE

Revenue from Ordinary Activities

2

Conference Expenses Consultancy Fees Donations Event Expenses Professional Development Professional Fees Project Expenses Promotion Expenses Scholarships & Education Administration Expenses Total Expenses from Ordinary Activities

Operating Profit/(Loss) after Income Tax Other Comprehensive Income Total Comprehensive Income

30

Annual Review 2019-2020

Statement of Changes in Equity for the Financial Year ended 30th June 2020 2020 $

2019 $

Balance at the beginning of the Financial Period Total Comprehensive Income attributable to the entity Transfer from Members Funds Reserve

326,814

367,704

24,038

(40,890)

â&#x20AC;&#x201C;

â&#x20AC;&#x201C;

Balance at the end of the Financial Period

350,852

326,814

Equity Retained Surplus

31

Annual Review 2019-2020

Statement of Cash Flows for the Financial Year ended 30th June 2020 2020 $

2019 $

1,233,562

992,786

1,551

1,722

–

–

(1,003,311)

(1,039,337)

231,802

(44,779)

Cash Flows from Financing Activities

–

–

Cash Flows from Investing Activities

–

–

Net Cash Inflows/(Outflows)

231,802

(44,779)

Opening Cash on Hand Net Cash Inflows/(Outflows)

484,389

529,168

231,802

(44,779)

716,191

484,389

NOTE

Cash Flows from Operating Activities Receipts from Members and Others Interest Received Income Tax Paid Payments to Suppliers and employees Cash Flows from Operating Activities

5

Cash at end of Financial Year

5

32

Annual Review 2019-2020

CAFBA Honour Board CAFBA Financier of the Year AAFA/CAFBA Award Winners

PAST PRESIDENTS 2008/09

David Gandolfo

2009/10

David Gandolfo

2010/11

Mark Rayson

2011/12

Mark Rayson

2012/13

Terry Moody

2013/14

Terry Moody

2014/15

Terry Moody

2015/16

David Gandolfo

2016/17

David Gandolfo

2017/18

David Gandolfo

2018/19

David Gandolfo

2019/20

David Gandolfo

1999

CBFC

2000

CBFC

2001

Suncorp Metway

2002

Westpac Equipment Finance

2003

Westpac Equipment Finance

2004

Macquarie Leasing

2005

Capital Finance Australia

2006

BOQ Equipment Finance

2007

BOQ Equipment Finance

2008

Westpac Equipment Finance

2009

BOQ Equipment Finance

2010

Macquarie Leasing

2011

Macquarie Leasing

2012

Capital Finance Australia

2013

Macquarie Leasing

2014

Westpac Equipment Finance

SERVICE TO THE INDUSTRY AWARD

2015

Westpac Equipment Finance

2014

Geoff Wallace

2016

Westpac Equipment Finance

2016

Joe Terlato

2017

Westpac Equipment Finance

2017

Ron Hardaker

2018

Capital Finance

2017

John Bills

2019

Westpac Equipment Finance

2019

Barry Clarke

2020

Westpac Equipment Finance

2020

Phil Botsis

LIFE MEMBERS 2013

Terry Moody

2013

David Gandolfo

2013

Kathryn Bordonaro

Contribution to CAFBA Award 2014

Glenda Boschert

2018

Daryl Raggatt

2019

Mark Caddy

2019

Greg Moylan

33

Annual Review 2017-2018

Commercial & Asset Finance Brokers Association of Australia

CONTACT DETAILS Registered Office: Level 3, 33-35 Atchison Street, St Leonards NSW 2065 Mail Address: PO Box 576 Crows Nest NSW 1585 Auditor: Paul Andrew Fox, Registered Company Auditor No 295584 PO Box 552 Dromana VIC 3936 Legal Counsel: Steve Edwards - CreditWise Pty Ltd ABN 55 097 768 799 14 Haigh Place Castle Hill NSW Australia 2154 Telephone: 02 9885 7097 Follow us on Twitter @CAFBA1

Join us on