Pty Ltd Director: A Few Questions

Discussion in 'Loans & Mortgage Brokers' started by izzy16, 7th Oct, 2020.

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  1. izzy16

    izzy16 Well-Known Member

    Joined:
    12th Oct, 2016
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    Sydney
    Hi all,

    I'm looking at going for a loan with CBA soon and have a few questions around self-employment.

    For context, I'm the sole director of a Pty Ltd. Held ABN over 3+ years.
    1. Would they consider a 10% deposit for self-employed?
    2. Does a Div 7A Director's Loan Agreement look bad to a lender? I 'owe' my company $20K.
    3. Is annual company net profit before tax added to my regular income for increased borrowing power?
    4. Does CBA look at 1 year of financials or multiple years and average it out?
    Thanks in advance.
     
    izzy16, 7th Oct, 2020
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Australia wide
    1. yes
    2. potentially
    3. basically yes
    4. can look at one year I think.

    Best to use a broker rather than go direct
     
    Terry_w, 7th Oct, 2020
    #2
  3. sumterrence

    sumterrence Well-Known Member

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    Sydney
    CBA has two calculating methods for self employed. Either just rely on your personal tax return figure as a simple one or look at your P&L figures and use the entire business income for servicing.

    For the loan between yourself and the company that's not an issue.

    And yes CBA only need most recent FY tax return.
     
    sumterrence, 7th Oct, 2020
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    CBA LMI under DUA treats SE the same as PAYG

    95 % inc LMI for PPOR subject to usual verifications. NAB tend to have more tolerance for lends > 2 mill with LMI.

    CBA will assess off most recent rtn and NOA, but will want the previous year, and some times 2 years previous if there was much variation

    ta

    rolf
     
    Rolf Latham, 8th Oct, 2020
    #4