Trust losses and loan serviceability.

Discussion in 'Loans & Mortgage Brokers' started by SurferGuy, 28th Nov, 2017.

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  1. SurferGuy

    SurferGuy New Member

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    Wondering if anyone on the forum can help with advice.

    Looking for a loan for a PPOR, I have 10% deposit. My business made a NET income last year however the Family Trust has losses bought forward that relate to previous years and mean there was no taxable income. All these losses relate to previous years but it seems from talking to brokers banks don't make any distinction? Does anyone know if there is a bank that will lend full doc in this situation?

    Thanks.
     
  2. Terry_w

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

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    You would just need to get some credit advice and explain to the bank they are carried forward losses and should be added back to income.

    Most banks would consider this, depending on the reasons it may get through
     
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The 10% issue seems way too tight. Most lenders want 20 % plus all cost s and then servicing can fail. You want to bring in total entity income as yours?
     
  4. IMHO_1

    IMHO_1 New Member

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    If your business has been making losses for many years ( startup) till you made a profit then you need to let credit know how you have funded those losses. either you put your own money in or the business borrowed money ( overdraft). Show projected or management accounts that the business has and will now continue to make profits. If the losses are a one-off say from 3 years earlier then again show that the business has been making positive income and reducing those losses over the last few years. As long as you have a positive balance sheet with equity you have a good case.
     

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