2. Establishment fee
Establishment fee 0.25% of loan plus GST payable on acceptance of letter of offer. A minimum fee of $625 plus GST is payable.

The 0.25% is applicable to well secured mortgage loans. An establishment fee of up to 2% is applicable where lesser tangible security is available.

3. Other costs and fees
The borrower must pay all their own and the Trust’s legal, stamp duty and valuation costs. The Responsible Entity, Australian Ethical Investment Ltd, will try to keep all such costs to a minimum consistent with being commercial but protecting its own interests.

Unused limit fees – loans committed and approved for drawdown but not drawn down within 7 days attract a 2% per annum commitment fee, payable quarterly in arrears.

4. Early repayment
There are no early repayment fees unless the 3 or 5 year fixed interest rate option is chosen (see interest payments below).

5. Principal repayments
A maximum of one-year interest only may be allowed after which principal and interest instalments are then expected. Normally equal monthly repayments are required though a structured approach may be negotiated. Additional principal repayments can only be made in multiples of $5000.

6. Loan term
Generally 3 to 10 years although a maximum of 15 years may be considered.

7. Interest payments
The initial interest rate is set at the time of first drawdown. Interest is payable monthly in arrears. The interest rate is determined as a margin plus a base rate. The base rate depends on whether the loan interest rate is fixed for a 1, 3 or 5 year term, at the choice of the borrower. The base rate for 1, 3 or 5 year fixed rate loans will be the bank bill swap rate as published daily in the Australian Financial Review.

The margins, ranging up to 5%, that are added to the base rate vary according to perceived risks involved and available security. Monthly loan repayments are set on loan drawdown and recalculated at each 1, 3 or 5 year interest reset anniversary.

The 3 and 5 year fixed rate can only be chosen when there is at least 3 or 5 years of loan term remaining. It can only be chosen at drawdown or reset anniversaries.

If the 3 or 5 year rate is chosen an early repayment fee of 1.5% per annum flat applies to any amount of the loan principal so repaid. The fee is calculated on the number of days remaining to the end of the 3 or 5 year period.

8. Loan size
As guidance loan proposals should generally range between $250 000 and $2 000 000 but each proposal is considered on its merits with some proposals being approved outside of these limits.

9. Security
Security over real estate and other business assets will normally be taken. Preference is usually given to those applications where the loan is no more than two-thirds the value of real estate security offered however, a loan of up to 75% of real estate and other tangible security may be considered where excellent credit risks exist.

10. Insurance
Insurance on assets secured will be required. Death and disability insurance may also be required over key people in the business.

11. Acceptance
Loan offers expire three weeks after receipt of written offer.

12. Other conditions
Each borrower proposal is individually assessed and other conditions may apply.

14. Information required from borrower
This will vary in complexity and detail with each borrower, however the following minimum should be provided in a concise, thorough and well laid out written form (business plan):

• Purpose for which the loan is required
• Trading, profit & loss and balance sheet figures for the last 3 years
• History of the business
• Details of principal people managing the business
• Details of shareholding structure and list of shareholders
• Cash-flow projection for next 12 months showing all incoming and outgoing funds on a monthly basis with commentary on significant variances with past performance
• A summary of where the business products or services fit in their market
• Position of competing products or services
• Details of how the products or services satisfy the Australian Ethical Charter
• Details of any activities which may transgress the Australian Ethical Charter
• Explanation of how and when the loan is to be repaid.

Loans manager contact
Robert Sharf
e-mail rsharf@austethical.com.au
phone (02) 6201 1910
fax (02) 6201 1922

The above conditions and information are subject to change without notice.