Could I get a loan?

I have an IP worth about 300k, owing 56k.

Just started a new business, so variable income but say once it stablises the income range would be between 100k to 200k.

I'm looking at property's between 1 to 2 million.

I don't know if I'm dreaming or not but my questions are

- how long will I need stable business income for the lender to accept it?
- can I use the equity in my IP as a deposit?
- what would my borrowing capacity be in the above circumstances at 100k, 150k, and 200k annual income?

 

As a guide 6 times your annual income is what you could potentially borrow. But for self employed generally 2 years yea returns are needed

 

How much deposit do you have?

 

$0, I was hoping to use the equity in my IP as a deposit. Not sure if that's possible.

 

Generally ABN has to be registered for 2 years and most lenders will require 2 years full financials. Some lenders like ANZ will work off one years financials.

Since you have just started the business this is going to be tough - your only option is an ANZ product available through the business banking channel. They will work projection prepared by an Accountant but we would need to see the work history and how that relates to what your business does.

There are other lenders like Liberty that have a policy niche that caters for this type of scenario whereby they will work off 1 day ABN's however the rates and fees are going to be higher and the LVR lower.

 

Is it 6 times your gross annual income or net?

 

gross

very rough guide though

 

That would mean you would be in LMI territory and have to pass more stringent criteria

 

I’m told CBA are an exception.

 

That is absolute ******....you need a better broker...there are lenders who will do a 1 year ABN....with accountants letter.

 

That's why I said generally. There are a few

 

Generally speaking you are going to need to be trading for 2 years or more.

CBA use latest years figures but require 2 years financials. If the difference between the years is too large then they can sometimes use an average of the 2 years. ANZ require the ABN to registered for at least 2 years but only need to see the last years tax returns/ financials. Some other lenders will use 1 years figures supported by the current years BAS statements confirming turnover is in line.