Business loan and then home loan q's

Hi all, I've an opportunity to invest in a business and would like to discuss (in general obviously) how obtaining a loan to do so would impact on my ability to obtain a home loan in the future. I've obviously looked at various online calculators however figured I'd ask peoples thoughts also.

With the business I would invest approximately 100K and also take out a loan for approximately 100K (total investment of 200K). Based on a 5 year loan (and assuming conservatively a 10% interest rate; the actual rate would be lower though) I make that I'd have to pay approximately 25.5K a year for five years. There would be little to no direct income over those five years although capital value growth would be expected.

I currently rent although intend to purchase a house (up to the 450K or so mark) at some point in the future; no partner currently or children. I also have a NAB Equity Builder loan which I am paying 5K a year on; the total loan limit is 50K though and I realise that works against me - I could close this if needed. No other credit cards, debts or assets.

My income is approximately 120K before tax. After tax, I make my net income to be approximately 88K and of that I would have 30.5K in investment loans to repay (business, equity builder) taking cashflow down to 57.5K.

My expenses per year based on the last two years are roughly 41K (includes 14K rent) although could perhaps be reduced slightly.

So after expenses I would have a surplus cashflow of approximately 16.5K a year; or 30.5K a year without rent. If I wanted to purchase a house for approximately 450K (roughly 100K deposit, 350K loan) would it be realistic to think that a bank would lend me 350K? Or would I have pushed my serviceability likely too far with the 100K business loan and 50K equity builder loan limit?

I know I have rambled on although any thoughts would be much appreciated! Cheers

 

what would be the security for the loan?

 

Hi Terry & thanks for the reply!
The business loan would be unsecured (although would be secured as a guarantor by the business itself). I work within the business.

 

A business is not an entity, but something a entity does - you might mean company? There are some legal issues for the company to consider if it is going to guarantee a loan by someone to acquire its shares.

Anyway, I think you will find it very hard to get a loan for that, but it is not an area that I work in so may be wrong.

 

$100k unsecured loan would be hard to obtain, but im sure a shark lender will provide it if it makes sense.

But to answer your question, yes it will reduce your borrowing capacity, best talkctpva broker to punch in some numbers for you tovsee if its still doable based on the price range you want to buy in.

 

I am still waiting to see details of the loan terms although have been advised that finance is being arranged through one of the Big 4 banks.

 

Yes, I did mean a company.

Thanks Terry & Tony, I had been under the impression that the business loan would have been the easy one!