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:
    23rd Nov, 2015
    Posts:
    61
    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
     
    Manic, 4th Mar, 2020
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,653
    Location:
    Gold Coast (Australia Wide)
    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
     
    Rolf Latham, 4th Mar, 2020
    #2
  3. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
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    6,685
    Location:
    Perth WA + Buderim Qld
    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.
     
    Jess Peletier, 4th Mar, 2020
    #3