Partner Guide. How to become a Reckon Loans Partner and offer business loans to your clients. January 2017 Edition 01

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1 Partner Guide How to become a Reckon Loans Partner and offer business loans to your clients. January 2017 Edition 01

2 A word from our CEO Reckon Loans is an emerging fintech product within Reckon's suite of small business solutions, servicing hundreds of thousands of businesses across Australia. We launched Reckon Loans (powered by Prospa) in July 2016 to help business owners access the funds needed to better manage cash flow and grow their business. We are faster and more flexible than traditional bank lending and offer world class support to match. With Reckon Loans, you get a trusted and experienced partner to take your business to the next level. Clive Rabie Reckon CEO Reckon Loans is a service offered by Prospa Advance Pty Ltd ACN Reckon Limited is the introducer only and does not guarantee or support Prospa Advance Pty Ltd in any way. Prospa is not part of Reckon Limited. Reckon receives a fee for referral or may elect to participate in the loan.

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4 Why Reckon Loans Our unsecured small business loans are customised for each business specific needs, making sure they get the right amount of funding. We are determined to help every business grow and offer timely access to funds along with flexible loan terms. We are a great alternative lending option for SME s that have not been able to access finance from traditional means. Our friendly service team assists applicants at every step, and ensures they are well supported right through the borrowing process.

5 A new $9 billion SME finance market is emerging Currently 400,000 Australian SME s need cash flow finance each year.* Market size based on a $35,000 average deal size. *Source: ABS (Australian Bureau of Statistics census 2011) The lender to service this SME market is Reckon Loans * At Reckon Loans we provide the funds when businesses need it and quickly. * We do not require an asset, invoice or security such as property. * We say 'Yes' more!

6 How Reckon Loans compares to existing small to medium business funding options Benefits Reckon Loans Overdraft / bank loan Business credit card Leasing / rental 24 hour approval and funds in 3 days No financials or BAS required <$50K High approval rates No hidden fees in total repayment No collateral required No deposit Funds can be for any business need

7 Our product also works with traditional lenders where a customer does not fit the standard criteria For example: Traditional finance type Customer issue Equipment asset finance Requires a deposit Factoring Customer does not have an invoice or cannot get debtors approved Bank loans Does not have property or does not want to use the family home as security Second mortgages Customer has too high a Loan to Valuation Ratio (LVR) Overdrafts Cannot provide security or has reached their maximum overdraft limit How Reckon Loans can help Reckon Loans does not require any security such as property, cars, invoices or debtors. We can finance up to $250,000 based on their cashflow and business performance.

8 How does the product work? Fast and simple process with approvals and funding within one business day. Deal size $5K - $250K Term 3-12 months Minimum criteria Minimum $5K per month turnover >6 months trading Australian citizen / permanent resident >18 years old Repayment options Daily or weekly direct debit Required supporting documents 3 months bank statements or electronic visibility to trading account If loan >$50K: current receivables, payables and financials Features * Unsecured loan * Fast approvals and settlement * Flexible terms and repayment options * Easy renewal and ongoing access to funds * We say 'Yes' more often Typical loan uses include * Soft costs * ATO tax portal debt (some lending parameters apply) * Purchasing inventory * Remodelling/renovating * Opening new locations * Managing cash flow * Bridging receivables gaps * New and second-hand equipment * Start new jobs/contracts

9 Two examples of how Reckon Loans supports businesses by making a return on funds When opportunity knocks When you need to expand You have an opportunity to buy $30,000 worth of inventory for $20,000 if you buy in the next 3 days. Using a $20,000 Reckon loan with a 6 month term you can take advantage of the $10,000 inventory discount. After paying off the cost of the loan ($5,000), you generate $5,000 in business savings. Using a $50,000 loan with a 12 month term you can expand your business and earn an additional $48,000 in margin this year. After paying off the cost of the Reckon loan ($18,000), you gain a profit of $30, K 48K Opportunity $10,000 inventory discount Opportunity $48,000 additional margin 5K 18K Cost Loan cost $5,000 1 Cost Loan cost $18,000 2 $5,000 Business savings $30,000 Year 1 net profit *Terms and Conditions: 1 A $20,000 Reckon loan factored on an average of 1.25 / 6 months = $25,000 in total repayments. The loan cost of $5,000 = Business savings of $5, A $50,000 Reckon loan factored on an average of 1.36 / 12 months = $68,000 in total repayments. The loan cost of $18,000 = Year 1 net profit of $30,000.

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11 Fast and simple application process Complete application Send documents Prospa assessment Agreement signed Funding available Supporting documents General * Completed application form * Last 3 months bank statements Additional documents for deals >$50k * Financials P&L and balance sheet * Aged receivables & future receivables / working contracts * Aged payables * ATO portal statement / copy of payment plan if applicable How long does it take? 24 Hours 1-2 Business days 3-5 Business days < $50K $50K - $100K $100K+

12 Strong commission program Reckon Loans pays you for every introduced customer. Our market leading commission program can yield up to 14% commission over a 3 year period. Factor rate 1.3 or greater 1.3 to 1.25 <1.25 New 4% 3% 2% Repeat 2% 1.5% 1% Note: commissions are based on the factor rate and include GST. Factor rates range from 1.08 to The factor rates vary depending on the term of the loan and customer credit quality. Please refer to the FAQs on pages for an explanation on the factor rate and interest charged on each loan. New and repeat commissions are paid within 5 business days of the customer being funded. In the event that a customer applies direct to Reckon for a repeat loan, then a repeat commission will still be paid to the Introducer. Please refer to the Reckon Loans Introducer Schedule for more information.

13 Your questions answered > Why is Reckon introducing Prospa? At Reckon we re transforming the way small businesses access funding. We re making business lending smarter, faster and easier. That s why we ve engaged Prospa, Australia s leading online lender to small business, to change the loan approval process from stumbling blocks to stepping-stones. > Tell me about Reckon Loans. Reckon Loans, powered by Prospa, helps businesses access unsecured loans from $5,000 to $250,000. The term of the loan is between 3 and 12 months, with cash flow friendly repayments that are either daily or weekly. > How does Reckon work with Prospa? Reckon Loans is powered by Prospa. Reckon Limited is not a provider of financial services. Reckon Limited acts as an introducer only. > How fast will I get a response? You can receive a response in as little as one hour, if you apply during standard business hours and allow Prospa to use an advanced bank verification system link to instantly verify your bank information online. If you choose to upload copies of your bank statement, Prospa can usually provide a decision in one business day. > How fast will I get the money? If you apply before 4pm on a business day, you can usually have money in your account that same business day. Otherwise, you will receive funding the next business day.

14 > How much can I borrow? Prospa may be able to provide you with a loan of up to $250,000. The total amount of your loan will depend on the specific circumstances of your business. The ProspaScore platform looks at a variety of factors to determine the health of your business. > What are the fees? The amount due from day one includes the establishment fee. There are no additional fees (excluding any late payment or default fees) and no penalties for early repayment. > What is the interest rate? Prospa offers a factor rate because terms are usually less than 12 months. A factor rate is expressed as a decimal figure not a percent. It varies based on your industry, how long you have been in business, the health of your cash flow and other factors. When a factor rate is used, interest is charged to the principal when the loan is originated. > Do I need to hold or operate under an Australian Financial Services License (AFSL) to be a Reckon Loans partner (Introducer)? You do not need to hold or operate under an AFSL to be a Reckon Loans partner. Prospa's legal advice is that our business loans (powered by Prospa) are a 'credit facility' within the meaning of the regulation of the Corporations Regulations 2001 (Cth) and are therefore not a 'financial product'. As such, they are exempt under section 765A(1)(h)(i) of the Act. Prospa is the provider of the loan and holds an Australian credit licence

15 Reckon Loans customer story Finding the right financing solution for small business Thriving day spa Simply Beautiful Hair and Beauty in WA has kept customers looking their best since the business conception in But when owner Suzanne Flanders needed finance for expansion, an online solution delivered by Reckon Loans proved truly elegant. > The need to expand Since its opening, Simply Beautiful Hair and Beauty has specialised in offering complete day spa experiences including both hair and beauty treatments, which has provided the business with a competitive advantage against its local rivals. However, in August 2016, with Perth experiencing an economic downturn following the end of the mining boom, Suzanne decided that her spa needed fresh investment in multiple areas. Her strategies included expanding the spa s premises, investing in more stations, and improving her marketing reach. These changes would enable the business to grow and remain profitable in such a harsh economic climate. Without having the cash flow available to reinvest, Suzanne evaluated her external finance options. After discovering an offer from Prospa-powered Reckon Loans, she shunned the big banks and applied for a small business loan. I saw Reckon s offer on Facebook, and learned that they can provide access to finance without needing you to submit a lot of paperwork such as business plans and projections, Suzanne said. I m not a clairvoyant and don t have the time to spend away from the business creating forecasts, and usually the banks ask you to reassess and re-submit all the paperwork anyway. That s why Reckon was an easier process to access finance, it was fantastic.

16 > Improved ROI Suzanne had the funds needed in no time, and has used them to grow her business successfully. We used the funds to make changes in the salon like expanding the rooms, investing in marketing and bringing in a new product, Suzanne said. I had been researching into our new brand, Skinstitute, for quite some time, and already it has been very successful. It is very affordable for clients, and in fact we had one of our best sales weeks in a long time following its launch. With Simply Beautiful Hair and Beauty already seeing the benefits and return on investment on its small business loan, Suzanne is hopeful the spa will continue growing as the local economy gradually improves. If we can survive these tough times, then we should be great once things improve, She said. It had been a tough few months, but at the end of the day it comes down to the quality of your staff, and how they upsell and promote products. > A hassle-free solution Suzanne s success story is an example of just one of the thousands of small businesses that have been helped by business loans from non-bank lenders. When asked whether she would recommend Reckon Loans (powered by Prospa) to other small businesses, there was no doubt as to the answer. I would recommend them, particularly to people struggling to obtain finance from the big banks and other traditional lenders, Suzanne said. It was hassle free, they only considered my main business account, not my personal financial situation, and I did not have to provide any other paperwork. To conclude, for small businesses like Simply Beautiful Hair and Beauty, obtaining hassle-free finance from online lenders like Reckon is fast and the process is easy, allowing owners to keep the focus on pleasing their customers.

17 Partner with us today! Our partners can offer loans to clients and create a new revenue stream for their business. 5 steps to partner success 1 2 Register to become a Reckon Loans partner Attend Reckon Loans introduction webinar 3 Receive individual partner consultation and introduction to marketing platform Setup online referral landing page 4 Customise existing marketing collateral 5 Call our friendly team on and get setup today. professionalpartner@reckon.com reckon.com/au/loans Level 12, 65 Berry Street, North Sydney, NSW 2060