Self employed loans are not as difficult as most people would have you believe
Running a small business is hard enough without having people around you telling you that finding finance is even harder.
The art of delving into a business and understanding your needs as a business owner seems to be lost on a lot of lending staff and mortgage brokers. You’ll be told all sorts of weird things like you should take out a low doc loan (at a higher interest rate) or you can’t afford to borrow the amount you need to buy your home.
Self employed loans are as stress free to put together as any other type of loan. At Curtis Financial, we specialise in lending to the small business community of Australia and we will work with you and your accountant to understand every single need.
Self employed loans need to be as flexible as possible to help you in those peaks and troughs that come as part and parcel of running a business. We won’t settle for anything less.
Criteria for self employed home loans
Loans for self employed customers are approached differently to a standard loan. A normal customer is employed by a business or company and their wages are consistent. For that reason they will want to see a few payslips to verify their income.
or the small business community, things are a little different. Most lenders we deal with will want to see between 1 to 2 years of trading and the tax returns for those years. The Banks are looking for two main things: Profitability of the business and stability of income.
Banks have an inbuilt tolerance for fluctuation in your income and the range is between 10 and 20%. For a well-established business this normally wouldn’t be an issue; however, if you are a new business and your income is growing at a rate well beyond these rates, your choices of lenders could be significantly reduced.
That’s why having the right broker behind you is important. We have lenders on our panel who will work with us to get you not only the best deal, but want to understand your business so they can get you exactly what you want.
Self employed loans give you all the same benefits as a standard loan
There is a lot of bad advice floating around the lending community around self employed home loans. All of the banks cater for their self employed customers and their rates are the same as any other customer, providing the application for finance is structured correctly.
Loans for self employed customers can be categorised into two areas: low documentation and full documentation.
Low documentation or “low doc loan” bears a high amount of risk to the bank as they don’t require the normal amount of verification as a full documentation loan. This means that instead of providing tax returns to the bank to verify, you may provide some business activity statements (BAS) or a letter from your accountant. It’s because of this reduced verification that a lot of banks will limit how much you can borrow against a property’s value – some will charge higher rates and there will almost certainly be higher fees associated with these types of loans.
Where possible, it’s always in your best interest to go with fully documented self employed home loans. You won’t be charged excessive fees, you can potentially borrow more against the value of your property and rates are significantly better.
Our staff know this and at all times will work with you to review your financial statements to get the most out of what you have so you’re not paying these higher rates and fees.