Partner GuideHow to become a Reckon Loans Partnerand offer business loans to your clients.

February 2018 | Edition 02

A word from our CEO

Reckon Loans is an emerging fintech product within Reckon's suite ofsmall business solutions, servicing hundreds of thousands of businesses

across Australia.

We launched Reckon Loans (powered by Prospa) in July 2016 to helpbusiness owners access the funds needed to better manage cash flow

and grow their business. We are faster and more flexible than traditionalbank lending and offer world class support to match.

With Reckon Loans, you get a trusted and experienced partner to takeyour business to the next level.

Clive RabieReckon CEO

Reckon Loans is a service offered by Prospa Advance Pty Ltd ACN 006 593 219.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.

Our 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 SMEs 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.

Why Reckon Loans

Market size based on a $35,000 average deal size.

*Source: ABS (Australian Bureau of Statistics census 2011)

A new $9 billion SME finance market is emerging

* At Reckon Loans we provide the funds when businesses need it and quickly.

* We do not require assets, invoices or security to access up to $100,000.

* We say 'Yes' more!

The lender to service this SME market is Reckon Loans

Currently

400,000 Australian SMEsneed cash flow finance each year.*

24 hour approvaland funds in 3 days

Benefits Reckon Loans Overdraft/ bank loan

Business credit card

Leasing/ rental

No financials orBAS required <$50K

High approval rates

No hidden fees, everything is included in the total repayment

No security required to access up to $100K

No deposit

Funds can be for any business need

How Reckon Loans compares to existing small to medium business funding options

Our product also works with traditional lenders wherea customer does not fit the standard criteria

Equipment asset finance Requires a deposit

FactoringCustomer does not have an invoice or

cannot get debtors approved

Bank loansDoes not have property or does not want

to use the family home as security

Second mortgagesCustomer has too high a Loan to

Valuation Ratio (LVR)

OverdraftsCannot provide security or has reached

their maximum overdraft limit

You can borrow between $5,000 and $250,000. Reckon Loans does not require security (such as property, cars, invoices or debtors) to access up to $100,000.

For example:

Traditional finance type Customer issue

How Reckon Loans can help

Fast and simple process with approvals and funding possible in 24 hours.

Typical loan uses include

How does the product work?

Deal size $5K - $250K

Term 3 - 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 * No security required to access up to 100K

* Fast approvals and settlement

* Flexible terms and repayment options

* Easy renewal and ongoing access to funds

* We say 'Yes' more often

* 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

Two examples of how Reckon Loans supports businesses by making a return on funds

$5,000Business savings

$30,000Year 1 net profit

When opportunity knocks

Opportunity$10,000 inventory discount

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.

*Terms and Conditions:1A $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 $5,000.2A $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.

When you need to expand

Using a $50,000 loan with a 12 month term youcan expand your business and earn an additional$48,000 in margin this year. After paying off thecost of the Reckon loan ($18,000), you gain a profitof $30,000.

Opportunity$48,000 additional margin

5K

CostLoan cost $5,0001

18K

CostLoan cost $18,0002

10K 48K

General

* Completed application form* Last 3 months bank statements

Completeapplication

Senddocuments

Prospaassessment

Agreementsigned

Fundingavailable

Supporting documents

How long does it take?

Fast and simple application process

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

< $50K

24Hours

$50K - $100K

1 - 2Business

days

$100K+

3 - 5Business

days

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.

Note: commissions are based on the factor rate and include GST. Factor rates range from1.08 to 1.36. The factor rates vary depending on the term of the loan and customer creditquality. Please refer to the FAQs on pages 13-14 for an explanation on the factor rate andinterest charged on each loan.

New and repeat commissions are paid within 5 business days of the customer beingfunded. In the event that a customer applies direct to Reckon for a repeat loan, then arepeat commission will still be paid to the Introducer. Please refer to the Reckon Loans Introducer Schedule for more information.

Factor rate 1.3 or greater

4% 2%3%

2% 1%1.5%

1.3 to 1.25 <1.25

Repeat

New

Your questions answered

> Why is Reckon introducing Prospa?

At Reckon we’re transforming the way small businesses access funding. We’re making businesslending smarter, faster and easier. That’s why we’ve engaged Prospa, Australia’s leading onlinelender 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 loans from $5,000 to$250,000. The term of the loan is between 3 and 24 months, with cash flow friendly repaymentsthat 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 hoursand allow Prospa to use an advanced bank verification system link to instantly verify your bankinformation 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.

> 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.

> 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 isexpressed as a decimal figure not a percent. It varies based on your industry, how long youhave 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 7.1.06 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 454782.

Reckon Loans customer story

> The need to expandSince its opening, Simply Beautiful Hair and Beauty has specialised in offering complete day spaexperiences including both hair and beauty treatments, which has provided the business with acompetitive advantage against its local rivals.

However, in August 2016, with Perth experiencing an economic downturn following the end ofthe mining boom, Suzanne decided that her spa needed fresh investment in multiple areas. Herstrategies included expanding the spa’s premises, investing in more stations, and improving hermarketing 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 withoutneeding 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.”

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 2012. But when owner Suzanne Flanders needed finance for expansion, an online solution delivered by Reckon Loans proved truly elegant.

> A hassle-free solutionSuzanne’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 bigbanks and other traditional lenders,” Suzanne said.

“It was hassle free, they only considered my main business account, not my personal financialsituation, and I did not have to provide any other paperwork.”

> Improved ROISuzanne 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 hasbeen 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 onits small business loan, Suzanne is hopeful the spa will continue growing as the local economygradually 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 yourstaff, and how they upsell and promote products.”

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.

Our partners can offer loans to clients and createa new revenue stream for their business.

1Attend Reckon Loans introduction webinar

Register to become a Reckon Loans partner 2Setup online referral landing page 4Customise existing marketing collateral 5

Receive individual partner consultation andintroduction to marketing platform 3

Call our friendly team on 1300 653 449 and get setup today.

professionalpartner@reckon.com | reckon.com/au/loans

Level 12, 65 Berry Street, North Sydney, NSW 2060

5 steps to partner success

Partner with us today!