Refund in administration8251 people have read this article
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| Thursday, 13 October 2011 | |||
Refund Home Loans has gone into voluntary administration effective from 5pm yesterday. According to a communication sent from the administrators SV Partners to Refund Home Loan franchisees, increasing pressure from creditors forced the company to call in administrators to complete a clean and quick sale of the business. Speaking to The Adviser, a spokesperson from Refund Home Loans said the administrators were currently working to protect the Refund Home Loans business, keep the business trading and secure a buyer for the business. “As far as I am aware, there have been a number of companies that have expressed their interest in buying the Refund Home Loans business, but they are just waiting for the administrators to give them the green light,” the spokesperson said. The spokesperson said the administrators were hoping to find a buyer that would keep the franchisee model intact. “Right now it is business as usual for our franchisees. If there are any changes, the administrators will let them know in advance.” According to the communication, up until the end of 2010, all costs for the growth of the company had been met out of cash flow. At that point, it became apparent that further funding was required and the directors of Refund Home Loans expected to receive further support from the bank. However, the Queensland floods prevented that support being provided and the lack of further funding has left the company in the same position as before. Whatever the outcome of this administration, SV Partners believes the directors may become bankrupt as a result. According to the Refund spokesperson, administration of the home loans business will not affect the financial planning and real estate businesses.
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Comments
How much was the franchisor making?
Its clear that there was some sort of problem with the model, otherwise they would not be in VA
1. Client refund gets paid after the franchisor takes their cut.
2. To the brokers that think we give away huge amounts of our commission like $1,000! we don't, if we did, heck it must be a decent sized loan.
3. 99% of us work from home office we don't have site costs like the majority of other brokers.
4. I for one do not claim the client refund as tax deductible, maybe a few do, but we are all not stupid, so keep your clueless tax comment back in your tiny brain.
5. Lets get this very clear ,Refund does not hold an Australian Credit Licence!, we are Credit Reps under our Aggregator.
I honestly have to wonder about the majority of clueless posters here who have no idea of the Refund model or the numbers that we as franchisees settle. Refund is not perfect admittedly and the mismanagement and greed for expansion along with the banks non-desire to restructure the seemingly $2.5M debt has just capped things off.
Surely someone has to look at how all the so called super brokers who became the managers suddenly quit the businesses earlier this year?
How many RHL operators may just claim the deductions anyway, assuming it's an allowable deduction unless they have a ruling on it, or they would all have potential risk with ATO.
On top of that is GST, even a client cooperates and provides a receipt, but s/he may not have an ABN, unless its a commercial loan then you can't claim GST on the refund, that's 9.1% of your revenue gone.....as for RHL operators, you ask yourself a question, ignore what others say it's a good business model or otherwise, you are the insiders and you should know the answer to this: "is the business model a win/win/win situation?", that's win for customer of the business, win for owner/shareholder of the business, and win for the people operating the business....
There is also a collateral issue that I have never seen discussed.
I am assuming that the REFUND people claim the payment to the customer as a tax deductible expense thus netting down their income down to reflect the payment – but did they ever get a tax invoice form the customer – I would say ‘NO”.
That means all their payments were NOT tax deductible and they should be declaring the full commission not the netted off amount as taxable income
Any comments anyone?
Those silly enough to buy into these companies get no sympathy from me
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