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Loan options

Discussion in 'Property Finance' started by Matt Hartney, 30th Aug, 2016.

  1. Matt Hartney

    Matt Hartney Member

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    Hello I'm.settling on my second investment property, I recently started my own business I am having trouble with the banks even looking at my business numbers to get me approved. Is there any similar situations out there that will help me get over this hurdle?.
     
  2. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Need more info???

    What is the feedback form the banks in regards to your financials?

    What financials are you providing?

    Why wont they look at your financials?

    How long have you been self employed?
     
  3. Brady

    Brady Well-Known Member

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    You need to provide further infomation to get an accurate response
    - who is the current bank you're dealing with?
    - what industry is your business in?
    - how long have you been operating your business?
    - have you completed finanicals, tax return, BAS, P&L?
    - what history do you have in this business, did you work payg in same industry prior?
    - do you still work payg along with your business?
    - what is the purchase price?
    - how much are you looking to borrow?
    - do you have exisitng security/equity?
    - is the loan just in your name or with a partner? if you have partner what do they do?
     
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  4. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    @Brady shouldn't you be at work? :p
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    How long has your ABN been registered? Do you have any tax returns done?

    Go see a broker and they'll let you know what's possible.
     
  6. Brady

    Brady Well-Known Member

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    Haha I am :) computer upgrades mean I now have access to PC at work again - finally no more Window XP!
     
  7. Matt Hartney

    Matt Hartney Member

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    Thanks for the responses, I've been self employed for 3 months. I have no big overheads besides maintance on vehicles and insurance, I do have a broker I used for my last property he is telling me the banks won't count my wage for 2 years. My partners wage is not enough to get the loan approved, I have more than enough savings for the property to be approved. Is this a case of getting a more experienced broker?
     
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  8. Matt Hartney

    Matt Hartney Member

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    I'm in the process now of doing my tax return for my business and investment property.
     
  9. Brady

    Brady Well-Known Member

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    If you're able to answer the questions I posted above will be able to give you a pretty good idea if you have a chance.
    Many brokers/bankers will tell you 2 years - because well thats what policy states for most.
    But experienced bankers/brokers with good relationships will know how to structure it to get it done.
    Savings doesn't = loan. Bank has to ensure you have the ability to repay the borrowed about.
    Without further info it's impossible to say
     
  10. Matt Hartney

    Matt Hartney Member

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    I'm dealing with CBS
    My my industry is insulation
    I have been operating for 3 months
    I have not worked in insualtion in the pass. My in laws own a insualtion company I am mainly sub contracting off them.
    So I get guaranteed work
    There was no purchase price i started from scratch with savings.
    The property price is $350k
    I have roughly 30k in equity in first property.
    the loan will be in my partners name and mine.
     
  11. Matt Hartney

    Matt Hartney Member

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  12. Brady

    Brady Well-Known Member

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    CBA are typically very good for these types of deals - but you're not bring a lot of confidence to the bank as you don't have history in that field.
    Bit hard for the bank to hang their hat on the deal if you have only been there for 3 months, even if it's the in-laws business (unless they have a very strong relationship with the bank it doesn't add much value)
    I've got deals over the line within 3months of s/e but they have come from same industry.
    In some cases you can get 6-12months with BAS/P&L/Statements - but going to be tough for you.

    Could your in-laws look to take you on full-time as an employee for now and you could look to go back to subby later on?
     
  13. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If this gets across the line, you'll be paying for it.

    I'm assuming ABN and GST have also only been registered for 3 months?
    If this is something you're unconditional on, I'd be doing what Brady suggests and getting a full time stint with the inlaws. Any lending you get with the brand new biz in play is going to be expensive rate wise, and over 80% LVR you'll be struggling.
     
  14. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Written policy of almost every lender I can think of is they want your ABN to be in place for at least 2 years before they'll lend you money.

    There are instances where an ABN registered for over 12 months would be okay, but it is the exception, not the rule. They'd still want a full year of tax returns.

    I acknowledge what Brady is saying, but even 3 months with longer employment in the same industry is really stretching things. Without that longer term history you probably need to wait until you've done the first full tax return.
     
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  15. Watson1

    Watson1 Well-Known Member

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    Just be aware many banks will want to see either a tax return or a history of 3-6 salary crediting when you are employed by a relative.

    Some may even raise questions about your ABN and require a letter from your accountant or tax returns.
     
  16. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    What LVR?
     
  17. Brady

    Brady Well-Known Member

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    Most recent was 80% as they had a guarantor
     
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  18. Stoffo

    Stoffo Well-Known Member

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    Good luck :rolleyes:
    What is it with banks and "servicability" anyway :mad:

    I was 4 months into a 3yr contract and 2 yr option (with a top asx company) recieving over 20k a month with little outgoings, 1.2 in PPOR equity and only working 4 days a week, bought a neutrally geared office, they weren't interested !!!

    Maybe a contract to supply services with the outlaws might help with the lenders ;)
     
  19. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Try another bank via a broker as different policies apply to the same scenario.

    Banks are average at explaining exactly why a loan was declined and what you need to get it approved!
     
  20. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    agreed - based on the basics of that scenario there would potentially be quite a few options available. Every lender is different - and their business divisions vary widely as well. This variation is a good thing, as it means that there's generally one lender out there who will service a niche scenario. The key is having the deal placed with the RIGHT lender which will get you where you need to be.