PMA Exclusively Deals with Non-Coded Loans

The NCCP Act is a law aimed at safeguarding consumers and promoting ethical and professional conduct within the finance sector. The legislation covers loans that are meant for personal use such as home loans, auto loans, or loans taken out to pay for personal  expenses such as medical bills, education, holidays or emergency payday loans. 

These loans are classified as ‘coded loans’ and institutions that provide these types of loans are required to meet rigid standards. The purpose for this extra layer of protection is that the average consumer might not be as financially aware as those who operate their own businesses. 

Therefore, ASIC requires lenders providing coded loans to hold an appropriate licence and adhere to the following:

• Responsible lending obligations: Lenders must assess a borrower's financial situation to ensure the loan is feasible. 
• Disclosure requirements: Lenders must provide clear and upfront information about loan terms, fees, and charges. 
• Cooling-off periods: Borrowers have time to reconsider after signing certain agreements. 
• Hardship provisions: Borrowers can request changes if they face financial difficulties.

These regulations are aimed at preventing predatory lending practices that may take advantage of borrowers who may not be familiar with complex loan terms, additional fees, and conditional penalties among others.

Understanding non-coded loans

Although strict regulations are designed to improve consumer protection, having too much regulation usually means having long applications and approval times or often so many hurdles to jump over the loan just wont be approved at all. The extended period to get loan approval may be detrimental to running a business, especially when some business obligations are subject to time constraints (e.g. employee wages or stock purchases).

As such, non-coded loans specifically meant for business or commercial purposes aren’t covered by the NCCP Act. These allow for greater flexibility in structuring loan terms and negotiation of terms by both parties. 

The benefit of non-coded loans is that the application and approval process are usually much faster than coded-loans. Loan terms can also be tailored specifically to the business. Payment terms can be based on the exit strategy instead of having a long term monthly payment plan.

Moreover, non-coded loans are usually shorter-term loans. This is beneficial for a business that might not want to be tied down to a loan for an extended period.

Non-coded loans are covered by contract law, which has fewer statutory protections to the borrower compared to the NCCP Act. This means that borrowers have a greater responsibility when it comes to reviewing the terms and conditions and assessing risk of the loan.

The PMA Way

PMA specialises in providing fast, flexible finance for business purposes. We have never bent the NCCP rules in order to lend to a borrower, and nor will we ever do that. Therefore, we only provide non-coded loans to borrowers looking for genuine business/commercial funding. When applying for a loan using our Quick App form, the applicant is greeted with a disclaimer that specifically mentions this.

We have a guaranteed response time of four business hours when an application is submitted. Our team will quickly assess if the request qualifies under coded loans or non-coded loans. If a loan application is not for a genuine business purpose then the loan will be declined  immediately. If the application is for a genuine business purpose and meets our other lending criteria then we’ll issue an Indicative Letter of Offer within four hours. 

We take great pride in being transparent with all of our clients. We make it a priority to be upfront with all the terms and conditions and our team is easily reachable in any part of the approval process.

Upon receipt of all outstanding information, settlement can be made within five business days.

For more information about private business loans or if you have a scenario you want to discuss, please call us at 1300 856 683 or contact us via our Contact Us page.