Home Loans for Small Business Owners
Owning a small business makes a home loan application a little more complex, but generally won't lower your chance of getting approved. Mortgages for small business owners that have been operating for less than 2 years are still doable; see our self employed home loan requirements page for more information. The main difference when owning a small business is that we'll need to understand your business: how it operates, how it generates income & how it's been setup.
Small business home loans don't need to be hard.
We are very good at understanding different business structures & income options to assist you in applying for a home loan as a small business owner. If you want to understand more about what makes us different & how our process works, head to Mortgage Broker Brisbane page.
What are the options for declaring income as a small business
For a full breakdown of how we calculate income for a small business owner, please check out our self-employed home loan page..
|Income options for full-doc loans:|
|Average of the last two years profit + addbacks. Or,|
|Latest year's figures in isolation.|
|We have lenders that will exclude company debt from servicing.|
|We can also use the Director's Salary in isolation.|
|Income options for low-doc loans, or applicants who's small business has been running under 2 years:|
|6 months' BAS.|
|6 months' business bank statements.|
|Note: we only need one of the above in most cases.|
How your business structure will affect your home loan?
It doesn't matter how simple or complex your small business' structure is, as long as you or your Accountant can help us understand. We are experienced in dealing with a number of entities under one application. Once we understand everything, we'll draw it up in a flow-chart to help us & the bank to understand your business structure.
|We can deal with any number of entities within your small business structure:|
|Trusts. We can also look at purchases within discretionary or unit trusts.|
|Companies. Options to use full financials, just BAS or just a Director's salary.|
|Partnerships & sole traders.|
Company or Trust Structure (or pty ltd ATF xyz)
To consider you self-employed, we'll be looking for a 25% stake in the company in most cases. We can then look at profit + addbacks and apportion the income to you per your shareholding percentage
Under a company/trust structure, there are options to exclude business debts from affordability calculations with certain banks. There are also options to use your salary in isolation - i.e. treat you as if you're a PAYG employee (must be trading profitably).
In most cases, you want to be trading for 12 - 24 months. A fairly common scenario we see is when a sole trader has swapped to a company - which is accepted in most cases.
For a partnership, we'll be looking at the full trading profit and splitting it 50/50 to the Partners (or relative to the number of partners).
In the case of a sole trader, we will always need to income all income / debts in affordability, as the business and the individual are the same thing. Sole traders are exempt from needing to do full financials for a home loan application (although we'll want individual Tax Returns).
Please contact us for any questions or email me at email@example.com
|Requirements for a small business owner home loan:|
|6+ months ABN necessary, however 2 years recommended.|
|Lower interest rates available at 80% LVR.|
|Vacant land and construction excluded when trading for less than 2 years.|
|Features of a small business owner home loan:|
|Fixed and variable interest rates.|
|Credit impairments acceptable at lower LVRs.|
|Secured by residential security. Commercial security available under alternate product.|
|Minimum loan amount of $50,000.|
FAQ about our small business owner home loans:
What are your full-doc income verification options?
2 years' financials OR 1 year's financials OR Director's Salary.
What are your low-doc income verification options?
6 months BAS OR Accountant's Letter OR 6 months business bank statements.
Do you charge for your service?
No. The lender pays us a commission for a successful application so you needn't pay us anything.
Do you only service Brisbane?
We can do home loans for small business owners anywhere in Australia, often over the phone. Our Mortgage Broker is however based in North Brisbane, and as such can service all surrounding areas in person: Albion – Alderley – Ascot – Aspley – Bald Hills – Banyo – Boondall – Bracken Ridge – Bridgeman Downs – Brighton – Brisbane Airport – Carseldine – Chermside – Chermside West – Clayfield – Deagon – Eagle Farm – Everton Park – Fitzgibbon – Gaythorne – Geebung – Gordon Park – Grange – Hamilton – Hendra – Kalinga– Kedron – Keperra – Lutwyche – McDowall – Mitchelton – Myrtletown – Newmarket – Northgate – Nudgee – Nudgee Beach – Nundah – Pinkenba – Sandgate – Shorncliffe – Stafford – Stafford Heights – Taigum – Virginia – Wavell Heights – Wilston – Windsor – Wooloowin – Zillmere.
Will a credit check be required?
We can pre-asses your application without a credit check, however the lender will be required to do one upon application.