Are you self employed and/or a Contractor? Finding it hard to secure finance?
Getting finance for self employed application cans sometimes be tricky. Not all lenders have the same appetite for self employed customers and structure their policy accordingly. This usually results in the applicant facing issues they didn’t know existed.
Common issues self employed applicants face are:
1. Length of Registration of ABN – one of the main issues self employed applicants face is that many lenders require applicants to have held their active ABN for 2+ years.
2. Variations in Taxable Income – sometimes there are circumstances in business that result in fluctuation of taxable income such as capital expenditure, peaks and troughs in business. Some lenders will average your last 2 years, others will tolerate 20% variance and others will use just the latest years tax returns.
3. Tax Debt – most lenders will not accept your application if you have any outstanding ATO debts.
4. Poor Credit History – the #1 enemy of most self employed businesses is cash flow. Unfortunately, this can occasionally impact business owners’ credit history if they are forced to seek multiple sources of credit to close cash flow gaps.
The good news is that Empowered Finance have solutions for all of these problems.
With access to a large range of lenders we are able to investigate many different options for you, based on your unique circumstances.
Some of our lenders offer the following niches:
ABN and GST registered for a little as 3 months – assisting people who are in the very infant stages of their business.
Access to lenders who use latest year’s income only – this helps where you have started your business approximately 2 years ago. The first year is generally not very profitable so using year 2 financials only can be handy as the business builds momentum.
Tax debts acceptable – most lenders will not accept your application if you have an outstanding tax debt to the ATO. We have access to a small number of lenders that allow ongoing tax debts.
Lenders who do not automatically credit score decline – most major lenders will credit score applicants and automatically decline the application if you have a poor credit history. We have access to numerous lenders who do not ‘credit score decline’ – meaning that it is assessed by actual people enabling us to mitigate any potential issues that you may have.
Refinance business debts using your residential property – a small number of lenders will allow you to refinance any business debts you have using your residential property as security. This enables you to access home loan rates and fees which are generally lower than commercial loans, personal loans and equipment finance.
Empowered Finance is a solution based business. If there is a lender that will give you finance, we will find it. We will also provide you professional advice to equip you and your business going forward.
You can use the equity in your residential property to access finance for business purposes?
A range of lenders will allow you to refinance your home loan and get cash out for business and/or investment purposes. This can be a great option instead of a Business Loan as the rates and fees of a residential home loan are generally a lot cheaper!
Self employed and finding it hard to
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