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Non-verification of income finance solutions
One of the biggest innovations for business owners in the last few years has been “Low doc, No Doc” finance and leasing products.
Applying for finance usually meant providing lenders with up-to-date trading figures, full financial statements, cashflow forecasts and anything else that lenders wanted to know about your business. In most instances, self-employed people don't have the time to down tools and get the paperwork ready for their accountant or lender. It is simply too difficult, costly or time consuming. In the mean-time, a once in a lifetime opportunity may have passed you buy.
Now there's a quick, easy, discrete and convenient alternative for self-employed people wanting finance to fund a property purchase, business equipment or working capital without a lot of fuss or explanation. Non-verification of income loans and leasing products could suit you. No financials, pay slips or tax returns are required whatsoever. It doesn't get much easier than that!
Self-certified income loans are one of the fastest growing new lending markets in Australia. This new breed of loan is attracting more business people who prefer the simplicity, freedom and flexibility of not having to supply regular financials and evidence of their income. Lenders have discovered that finance for this market has attracted above average income earners looking for more flexible finance solutions.
Who can apply?
- Self-employed people who do not have or do not wish to produce current financial records or tax statements.
- Businesses with strong income or cash flow which may not be reflected in personal income tax returns.
- Businesses which have been trading at least 2 years.
- Startup businesses (less than 2 yrs trading or newly registered businesses).
- Self employed people who have irregular cashflows such as contractors and commission sales.
- Business owners who have lost a significant proportion of their personal assets through divorce and want to quickly re-establish themselves. See eQuity Builder
- Small businesses that have paper losses but are trading profitably.
- Borrowers with personal or business credit defaults.
- Recently arrived business immigrants
Personal financial profiles
Similar to standard lending practices, credit policy for non-verification of income applicants is graded according to your credit/risk profile. Essential this means your interest rate will reflect the credit risk.
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Your Assets
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Your Credit history
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Probable Interest rate
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Likely Lending outcome
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Property
Property
No property
No property
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Clear
Defaults
Clear
Defaults
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Competitive rates
Higher rates
Competitive rates
Higher rates (purchasers only)
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Acceptable
Acceptable
Acceptable
Not acceptable
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Loan Features (for residential & commercial asset loans)
- Loans can have all or most of the features available on a fully featured loan such as cheque book, Visa card, internet and phone banking.
- Realistic interest rates and set up costs, similar to normal housing loans.
- Interest rates can convert to lower standard variable rates after providing supporting evidence of income at a later date or after a qualifying period.
- You have a choice of principal and interest, interest only, redraw and split loans with terms of up to 30 years.
- Also available for purchase of land only, and construction.
Different types of non-verification of income loans
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Generic name
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Lending overview
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Lo doc
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The lender will assess serviceability based on the applicants providing a statutory declaration of their income and may also rely on third party references and sources such as BAS statements, bank statements, accountant’s letter, etc. Completed statement of assets and liabilities and evidence of conduct on all loans is required.
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No doc
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The lender will assess serviceability based on the applicants providing a statutory declaration that they can service the debt. Completed statement of assets and liabilities. No evidence of conduct on loans not being refinanced.
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Asset lend
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No assets and liabilities or income statement is required.
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Equity Builder
A significant proportion of business owners do not own property either as owner-occupiers or investors. Property offers three key benefits.
- Firstly, property as an asset class has a proven track record of improving in value over time. This means as equity (the difference between what you owe on the property and what it is worth) increases over time it can be accessed for both personal, business or investment purposes.
- Secondly, property is an attractive asset class to lenders. Lenders are much more inclined to create credit facilities such as business or investment loans if you have property. Too often business people build a business and neglect to build an asset base. One of Finance Cafe's key propositions to business owners is to build a property portfolio in either residential or commercial property.
- Lastly, property is an asset that can generate a passive income stream independent of the ups and downs of economic cycles and provide attractive and legitimate tax benefits.
Lenders are much more inclined to create a credit facilities if you have property. Too often business people build a business and neglect to build an asset base. If you are self-employed, take advantage of opportunities in the property market and start building on your business success so that a part of what you earn is invested in property.
Equity Builder is a finance and property solution that accelerates your ability to build equity in property while enjoying the tax benefits that flow from a quality property portfolio. If you are self-employed and earning a strong income with little or no assets to show for your efforts then equityBuilder can help. Others have succeeded and so can you. Let Finance Café show you how.
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