Loans for Small Business Owners

People who are self-employed don’t always fit into the bank’s computer models well, making it harder to secure finance. Often, bank staff can’t make small business information fit into their system in place of payslips, or they simply don’t understand the information that has been provided.

To help maximise your borrowing potential, Finance Consulting Group conducts a more thorough analysis of your financial information and presents it to a bank or non-bank lender.

We understand not everything is shown clearly on tax or BAS returns and often a detailed explanation is required. That is why we take the time to fully understand your business, income, expenses and commitments. A summary is prepared on your behalf, designed to help the lender in their approval process. This improves your chances of being approved for finance.

We deal directly with flexible and understanding lenders who will take the time to understand what you can afford.

Self-certified income or alternative income documentation lending (sometimes referred to as ‘low doc’, ‘lo-doc’, ‘lite doc’, or ‘alt-doc lending) is an option for self-employed contractors, sub-contractors, and business owners with an ABN.

This type of mortgage lending is available for those who don’t meet the stricter bank requirements for income criteria. Often a business owner or contractor is simply unable or unwilling (for many and varied reasons) to provide banks with the last two years lodged personal and business tax returns.

We have lenders with a proven track record of helping business owners in this situation. You will expect to pay a slightly higher interest rate and fee cost structure, due to the higher perceived risk nature of these loans.

Different lenders have different policies and restrictions as well as varied criteria to establish “acceptable income proof” for business owners. Just because one bank, lender (or even broker) says “no”, does not mean we can’t assist you. We have an excellent track record in helping clients with mortgage finance, who have previously been declined by their own bank.

Examples of income proof for lo-doc finance

Common income proof can be provided by 1-2 of the following (this varies between lenders and loan products):

• Last 6 months lodged BAS returns
• Last 6 months business banking statements (confirming business turnover/cashflow)
• A lender issued letter/form signed by the business’ qualified accountant, confirming the expected ability to pay a loan. We will liaise with your accountant directly when this is required.

Some formats only confirm an ability to pay, some nominate the declared income from the client and some lender’s forms quote previous year’s taxable income (and are therefore rarely used by clients).

How we can help

Finance Consulting Group undertakes a full analysis of each business and owners’ circumstances to recommend an appropriate lender for your individual circumstance. Part of the process is understanding your business cashflow and presenting your case to a lender for approval.

We pride ourselves on having a very high success rate of achieving loan approvals and settlements for business owners and contractors. We have also helped numerous other brokers obtain an approval for their clients from lenders they do not have access to on their (restrictive) panel. Most lenders provide loan redraw facilities that add some flexibility to the loans.

Putting your interests first

It is our practise for all business owners to assess if they will qualify for a bank loan first, before considering lo-doc type finance options. We want all of our clients to be approved for the best finance option for their situation.

In a many cases, when financial information and tax returns are available, we have obtained loan approval from a different bank on a “fully documented loan basis”,  without the need for a lo-doc loan at all.

A note on ‘No-Doc’ loans

Applying for low-doc, limited income proof lending is not the ‘No Doc’ style of loan that was available prior to the GFC. Due to the restrictions placed on consumers to protect them from themselves, this is no longer an option from any lender for personal residential property lending (including personal investment property loans).

For company and business purpose borrowers, there still remains the Private Mortgage Loan option.

Ready to get started? Get in touch with Philip Pay on 0439 400 497 or email to find out how Finance Consulting Group can support your loan application.