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There’s no secret that being self-employed can often pose challenges when trying to secure finance from a bank to buy a home, or consolidate some debt through refinancing.
As a small-business owner, you are trying to run your business, manage your staff, ensure profitability and no doubt spend time with your family and live your life.
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Those jobs will fill your schedule pretty quickly, and you may not have too much time to get your books through to your accountant, or you may be waiting for particular paperwork to be completed and you need funding a little more urgently. There are a whole bunch of reasons why business owners cannot provide their financials.
This is the story I hear all too often, and my clients often think it’s the end of the line. Their trusted bank of 20 years has turned them away and they are left with no solution to their problem, or no means of reaching a goal. But the fact of the matter is we have never had this many solutions available to our self-employed clients.
There are many different ways to support income when assessing the viability of a specialist solution. The three primary methods are:
• business activity statements
• business bank statements showing sales and expenditure
• an accountant’s certification supporting declared income.
I don’t have the exact statistics on the performance of these loan books. However, I am led to believe through discussions with lenders that these books perform exceptionally well. It is great to see smaller lenders investing in this space with options opening right up. Small-business owners across Australia can now access funds without jumping through the technical hoops the larger institutions set for them.
On top of this, the rates on these products are now starting at as low as 4.74 per cent. Gone are the days when low-doc loans attracted much higher interest rates than normal full-doc home loans.
Lending guidelines change often, and so do our clients' circumstances. We encourage our clients not to pigeonhole themselves into one lender’s product suite, as one day – generally speaking – they’ll run out of options.
Sean Murphy, senior credit adviser, My Mortgage Freedom
Starting his finance career at Liberty Financial in 2007, Sean developed a passion for specialist lending and the challenge of finding a solution for every client.
Having been a BDM at Liberty for almost three years, Sean decided it was time to move on and joined My Mortgage Freedom in the beginning of 2014. Sean's background in SMSF lending and non-conforming residential and commercial mortgages gives the team great scope when dealing with their clients.
Sean's objective is to work with a range of clients in different situations to assist them no matter how challenging the transaction might be.
