This Commissions Guide article relates to NAB Commercial loans. Articles related to other NAB products can be found here:
Connective will maintain this guide to the best of its ability but cannot guarantee that the information within is complete, and/or in line with the latest guidance and policies of the lender. If you believe anything is missing or inaccurate, please contact us.
Contents:
Commission Rates - NAB Trade Finance Products
| ex GST | inc GST |
Trade Refinance Facility |
|
|
Upfront | 0.455% | 0.5% |
Trail | 0.227% | 0.25% |
Invoice Finance Facility & Debtor Finance Facility |
|
|
Upfront | 0.455% | 0.5% |
Trail | 0.136% | 0.15% |
Standby Letter of Credit Facility |
|
|
Upfront | 0.455% | 0.5% |
Trail | nil | nil |
Import and Export Transaction |
|
|
Upfront | nil | nil |
Trail | 0.182% | 0.2% |
Upfront Commission
In the case of NAB Invoice Finance facility or NAB Debtor Finance facility application (but not variation) the upfront commission paid will be an amount calculated at the upfront commission rate multiplied by the approved limit for the facility, inclusive of GST up to a maximum of $10,000. Drawdown date means the date when the first batch of debts are purchased under the facility.
In the case of NAB Trade Refinance Facility application (but not variation) the upfront commission paid will be an amount calculated at the upfront commission rate multiplied by the approved limit of the facility, inclusive of GST. Drawdown date means the date which the funds are first drawdown under a loan.
In the case of NAB Standby Letter of Credit facility application (but not variation) the upfront commission paid will be an amount calculated at the upfront commission rate multiplied by the approved limit for the facility, inclusive of any GST, up to a maximum amount of $10,000. Drawdown date in respect of NAB Standby Letter of Credit means the date which a standby letter of credit is opened or issued under the facility.
Trail Commission
For a NAB Trade Finance Facility, Trail Commission is calculated for each trail commission period as follows: C = TCR x (A-B) where C = Trail Commission, TCR = Trail Commission Rate, A = Average daily debt balance of the loan account over the trail commission period. B = average daily credit balance of any interest offset account to which the loan is linked, and where the interest offset is enabled, over the trail commission period.
For NAB Invoice Finance Facility or NAB Debtor Finance Facility application (but not a variation) NAB pay trail commission at the trail commission rate multiplied by the Purchase Charge, inclusive of GST, collected by NAB under a NAB Invoice Finance Facility Agreement or NAB Debtor Finance Facility Agreement each month.
For NAB Import Transaction Application (but not variation) NAB will pay a trail commission, inclusive of GST at the trail rate above for the transaction collected by NAB each month.
For NAB Export Transaction Application (but not variation) NAB will pay a trail commission, inclusive of GST at the trail rate above for the transaction collected by NAB each month.
Entitlement to trail commission in respect of a loan automatically ceases without notice, if NAB accepts a variation application submitted by another broker.
No Trail will be paid if the principal loan amount falls below $10,000
Brokers entitlement to trail ceases without notice, during the period commencing from 45 days after the occurrence of a payment default until the default is remedied to NAB’s reasonable satisfaction within 90 days after the occurrence of the payment default, brokers entitlement to trail commission will cease permanently
Brokers entitlement to trail ceases without notice, during any period (Hardship Period) which NAB agree, as a result of borrower’s hardship, to postpone the dates on which the borrower’s repayments are due under the loan or extend the loan contract term and reduce the borrower’s repayment accordingly.
Broker’s entitlement to trail commission will resume if and when the hardship period ends or if a broker knowingly or recklessly gives information or a document in or supporting the application for the loan which information or document is false in a material particular or material misleading
If NAB suspect on reasonable grounds that a broker has committed or contributed to any systemic or widespread acts of fraud, illegality or dishonesty in relation to a loan or variation. In this circumstance, a broker’s entitlement to trail will cease in relation to all loans that have been introduced
Commission Rates - NAB Business Lending
| ex GST | inc GST |
Business Lending |
|
|
Upfront | 0.5% | 0.55% |
Trail | 0.182% | 0.2% |
QuickBiz |
|
|
Upfront | 0.2% | 0.22% |
Trail | nil | nil |
Upfront Commission
Eligible Loan Amount (except where an upfront commission is negotiated), upfront is calculated as at drawdown date Eligible loan amount for a term loan is 100% of a NAB Term loan. In the case of a variation to a NAB Term loan or business overdraft the net increase, if any, is the aggregated Approval Limits of all associated NAB loans that are Term Loans and Business Overdrafts. However, in the case of a variation to a NAB Term Loan or Business Overdraft, NAB may at its discretion determine to pay a lower amount of commission.
Except where an upfront commission is negotiated, the maximum upfront commission amount payable in relation to a NAB Business Lending Product is $27,500 (inclusive of GST). However, in the case of an Eligible Loan Amount that equals to or exceeds $5 million you may request (directly, or through your relevant NAB Commercial Broker Accredited Representative) that they pay an amount of upfront commission in excess of $27,500 (inclusive of GST). NAB will consider any such request at their discretion and advise the broker or, as relevant the brokers representative of the outcome of their consideration.
For each NAB QuickBiz Overdraft, upfront commission will be calculated on draw down date based on the amount equivalent to 100% of the Approved Limit.
Trail Commission
Trail commission is calculated for each trail commission period as follows: C = TCR x (A-B) where C = Trail Commission, TCR = Trail Commission Rate, A = Average daily debt balance of the loan account over the trail commission period. B = average daily credit balance of any interest offset account to which the loan is linked, and where the interest offset is enabled, over the trail commission period.
Entitlement to trail commission in respect of a loan automatically ceases without notice, if NAB accepts s variation application submitted by another broker.
No Trail will be paid if the principal loan amount falls below $10,000
Brokers entitlement to trail ceases without notice, during the period commencing from 45 days after the occurrence of a payment default until the default is remedied to NAB’s reasonable satisfaction within 90 days after the occurrence of the payment default, brokers entitlement to trail commission will cease permanently or During any period (Hardship Period) which NAB agree, as a result of borrower’s hardship, to postpone the dates on which the borrower’s repayments are due under the loan or extend the loan contract term and reduce the borrower’s repayment accordingly. Broker’s entitlement to trail commission will resume if and when the hardship period ends or if a broker knowingly or recklessly gives information or a document in or supporting the application for the loan which information or document is false in a material particular or material misleading.
If NAB suspect on reasonable grounds that a representative has committed or contributed to any systemic or widespread acts of fraud, illegality or dishonesty in relation to a loan or variations. In this circumstance, a broker’s entitlement to trail will cease in relation to all loans that have been introduced.
Upfront Commission - General
Upfront commission for a new loan is calculated as at the drawdown date, calculated on the Eligible Loan Amount. The Eligible Loan Amount means:
For each NAB Term Loan 100% of the approved limit
For each NAB Line of Credit, 60% of the facility credit limit.
For each NAB Business Overdraft, 50% of the facility limit
The maximum upfront commission amount payable in relation to an applicant in relation to Business Lending products (other than NAB Invoice Finance), a total of $25,000 provided that no more than $12,500 in total will be paid in relation to Business Overdrafts.
Upfront Commission for a Qualifying Variation means a loan variation that involves an increase of at least $50,000 in the principal balance of a term loan, or in the credit limit of a line of credit facility.
Upfront commission for a loan variation is paid in accordance with the following formula: Upfront commission = UCR x NLI X Product Multiple where UCR is the Upfront Commission Rate, NLI is the Net Lending Increase and the Product Multiple is 100% of the approved limit for a NAB term loan and 60% of the facility limit for a NAB Line of Credit.
Where the Business Loan is a NAB Finance Lease, NAB Hire Purchase, NAB Equipment Loan or NAB Novated Lease, the approved limit for the purpose of calculating commission, equals the amount financed (that is, the amount used by NAB to calculate the instalments payable)
Net Lending Increase (NLI) is defined as:
In the case of a variation to a NAB Term Loan, NAB Line of Credit or Business Overdraft, the net increase if any in the aggregated approved limits of all associated NAB loans (Including Term Loans, Line of Credit Facilities and Business Overdrafts).
However, in the case of a variation to a NAB Term Loan, NAB Line of Credit Facility or Business Overdraft, NAB Broker may at its absolute discretion determine that it will pay a lower amount of commission, and no upfront commission will be payable at all if the NLI is less than $50,000
NAB Business Lending product includes a NAB Finance Lease, NAB Hire Purchase, NAB Equipment Loan or NAB Novated Lease, the approved limit, for the purpose of calculating commission, equals the amount financed (that is, the amount used by NAB to calculate instalments payable)
Clawbacks
Period | % Clawback |
0-12 Months | 100% |
13-24 Months | 50% |
If on the date that is 6 months after the draw down date the outstanding principal balance of a term loan is less than or equal to 80% of the principal balance of the loan at the draw down date, the broker must repay a pro rata amount of Upfront commission calculated as follows: R = U-(A x Upfront Commission rate) where R is the Upfront Commission to be repaid, U is the Upfront Commission previously received and A is the outstanding loan balance on the date 6 months after the drawdown date.
Where a loan is fully repaid or discharged within 18 months of the drawdown date, and is replaced by a variation within 1 month, NAB at their discretion may:
Treat the variation as a new loan, clawing back Upfront commission and paying the full Upfront commission on the new loan; or
Disregard the discharge of the loan and pay Upfront commission on the loan increase dependent on the loan product.
A clawback will apply If any loan is subject to any payment default or other material default by the borrower within 18 months of the drawdown date and the default is not rectified within time period specified by NAB or they are satisfied on reasonable grounds at any time during the term of a loan that a broker has knowingly been a party to the following conduct:
Any elements of fraud, dishonesty or illegality associated with an application, or
Any elements of an application or the Borrower’s security have been misrepresented, are untrue or are substantially incorrect.