Self-Employed PAYG Income Verification.
Are you self-employed and paying yourself a regular wage? Why not consider a simplified lending option using just your payslips?
What’s the Deal?
Obtaining a loan can be a little painful at the best of times. If you’re running your own business, potentially even more painful. The required paperwork for those who are self-employed only increases with business tax returns, business financials, personal financials, Notice of Assessment’s, and statements for not only your personal but also your business liabilities. The list can become quite exhausting we know.
However...things don’t have to be so difficult! There are now multiple lenders who will let us process your lending serviceability using just the wages you pay yourself on a regular basis and no longer even need to see your business financials whatsoever.
Who can this help exactly?
1. Business owners paying themselves a regular and consistent wage.
2. Business owners with complex structures who don’t want to supply financials for multiple entities.
3. Business owners whose past income doesn’t reflect their current income.
4. Business owners with large and multiple debts held within their business.
In all these scenarios, this new approach can not only save you time and effort thanks to the significant reductions in documentation requirements, but it can also potentially increase you lending capacity!
Let’s see how this might work in a real life. I will use the following example from a recent client we helped obtain lending to help demonstrate how much this new approach can make a positive difference.
Applicant is self-employed, with an incorporated company structure, has three car loans held by the business, turning a healthy net profit, and drawing a regular wage for both co-owners.
At the same lender, we crunched the numbers for this application using both:
· Option 1: The regular full financials approach, and compared this against
· Option 2: The simplified income assessment method based just on PAYG payslips.
Maximum Borrowing Capacity:
· Option 1: ~$1,700,000
· Option 2: ~$2,000,000
In addition to the savings in time and energy spent collecting documentation, that’s a $300,000 difference!
Things To Keep In Mind
As always there are certain terms, conditions and criteria that must still be met to use this new method of income verification. In our experience, more of our clients have qualified than those who have not.
Even if turns out you can’t take advantage of this approach in your situation, there are many other avenues we can explore. Self-employed lending is a specialty area for us at I Know The Broker and we have a broad understanding and extensive experience in this area – take advantage of our knowledge and let us help you with your lending needs.
Call us today, we are sure we can make the entire process simpler than if you didn’t!