Serviceability for business

Discussion in 'Loans & Mortgage Brokers' started by Manic, 4th Mar, 2020.

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  1. Manic

    Manic Well-Known Member

    Joined:
    24th Jul, 2013
    Posts:
    59
    Location:
    Melbourne
    Hi, I'm looking to contract under an ABN and establish a trust that will pay to it's beneficiaries. Can brokers tell me how this will be viewed from a lender serviceability perspective? Will it be challenging to borrow as much and will it be limiting from a lender selection perspective?
    Thanks
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    15th Aug, 2005
    Posts:
    7,534
    Location:
    Gold Coast
    I assume you are currently a PAYG IT contractor ?

    many lenders will want 2 years of rtns and/or ABN, however these can be got away with 6 mths or rarely even less, depending ionthe continuity of work providers in your history.

    As an aside, be mindful, that few lenders will allow bene distributions to be used unless those benes are on the loan and sometimes the title. Dist to spouse is usually fine. Dist to brother is NOT unless the brother is also on title.

    Wont hurt you to get specific credit advice, its good u are thinking of this BEFORE.

    ta
    rolf
     
  3. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,224
    Location:
    Perth WA
    As Rolf says, it's usually viewed as being self employed and 2 yrs financials required. Sometimes it can be shorter depending on the circumstances - for eg, if you're contracting to just one company, and you were previously employed there, we can sometimes get exceptions.

    Bear in mind in LMI you have no hope for exceptions, so you'll need a good deposit if you're hoping to borrow before 2 years.