Does this sound like you? Well it sure was our family about 12 months ago. My beautiful wife works for another company and draws a wage every 2 weeks. In bank lending terms, that’s standard.
But what about me and income from my small business? For many banks, they just can’t get their head around it. As I have been presenting my story, I am finding more and more how common this is.
We applied for a loan with a second tier bank and my business was trading well, without setting the world on fire (like most small businesses). My accountant is a great mate of mine and extremely good at what he does. As such my business has a modest net profit. All of the deductions are perfectly legal and if your business has a good accountant, you will understand what I mean.
On the down side of this, many banks find this “too hard”. Their credit departments don’t understand deductions and depreciation. Or it is just too much risk for them to be comfortable with.
In our situation we had to provide document after document, got asked the same questions over and over again. Then the original documents that we provided went ‘out of date’ and we had to start the whole process over again.
In the end, this particular bank said it was all to hard and disregarded my income, only using my wife’s wage. Thus we couldn’t borrow what we wanted as we couldn’t “service” that amount. Mind you, the amount we were asking for was not extravagant as we are getting on in years and didn’t want to commit out grandchildren to our debt!
So we were left with a situation where we had to keep renting as house prices continued to rise. By the way we were paying 300 more in rent per week than what our repayments would have been.
I was quite agitated and even contemplated going back to work for someone else full time. Which at my age and time out of the corporate life would have been nigh impossible.
So we were stuck. Or so I thought.
I met a guy at the football club, who over a cold beer told me he was a finance broker with decades of experience. I explained my situation and he said he could help.
And he could. Within a couple of weeks we had the money we needed and bought our dream home. All because he new the ins and outs of the industry and introduced to us the concept that there are a whole bunch of lenders out their who do understand small business. By the way, our rates are some of the most competitive in the industry.
So I got to thinking, how many people are in the same situation as us? As it turned out, plenty.
I then made a decision, I need to spread the word. Just because one bank, lender or broker doesn’t understand your situation, doesn’t mean another doesn’t. So I got my finance credentials and my mission is now to get people with a small business the finance that they need and deserve.
Think outside the branch.
If you need assistance in getting finance and you have a small business, then contact us.