Self Employed Loans

The current lending environment for self employed loans

Freedom loans offer a very wide spectrum of self employed loans, therefore giving opportunities to self employed customers that do not have up to date financials to fit the narrow lending criteria of today’s major banks.

The current lending environment for self employed loans is a seemingly bleak one with all major lenders restricting their lending to this market demographic dramatically over the last 12 months due to the global financial crisis...

Currently most major banks will only provide 60% of property value to clients who are self employed and don’t have fully up to date financials...this is quite unhelpful for most self employed applicants...most of whom are seeking a self employed loan solution in the form of Low doc loans.

Another issue with lending to self employed borrowers is that if they want an 80% loan against the value of their property this is only possible with the help of mortgage insurance. Mortgage insurers have now tightened the parameters for Low doc loans so much that the minimum requirement is for 12 months of BAS statements and 6 months business bank statements...this is not always possible for self employed borrowers...

What if you are not GST registered? Unfortunately if your annual sales is less than $75k you will need to complete your tax returns to qualify for self employed loans...

Another major problem for business people that want access to the equity in their properties are unable to do this via a Low doc loan (unless they are borrowing less than 60% of property value) as mortgage insurers will now not allow the refinance of a Low doc loan...the other problem is that the maximum cashout allowed is only $10k...hardly a viable option for the majority of most self employed people...

What are the options available to Low doc borrowers in terms of substantiating their income?

• Self certification only...this is the declaration of income to the lender...this is your income after all business expenses and before tax...an ABN is required.
• Full doc loan...last 2 yrs personal and business tax return...borrower will need to demonstrate enough taxable income to demonstrate to the lender that they can afford the loan repayments.
• BAS statements...this is a requirement for all businesses whose turnover exceeds $75k P/A...Lenders are focusing mainly on the quarterly sales figures to determine whether the borrower can afford the loan.
• Trading statements...the demonstration of sufficient turnover to service the nominated loan amount.
• Accountants declaration...this can be used to demonstrate to the lender that the income declared on a self certification form is according to your recent trading history.
• Interim accountant prepared Profit and loss statements demonstrating enough taxable income to service the required loan…….backed up by business bank statements.

At Freedom Loans our expertise will determine the best strategy for self employed applicants as per their unique set of personal and financial circumstances.

So how can Freedom loans help with your Low doc loan?

• We have access to funders that will go to 80% of the property on a Low doc basis.
• Cashout available above $10k.
• Funders that will refinance Low doc loans
• Low doc loan options also available for credit impaired applicants
• Our Low doc loan options start from interest rates of 6.09%

Apply online to find out how Freedom loans can assist you to do what you with low doc loans or self employed loans today...

If we can't help you, no one can.

Contact us today to find out how we can help.