How a Growing Business Got Its Home Loan Without Waiting Another Year

When you're self-employed, your financials are always looking backwards. They tell a lender what your business did last year, not what it's doing now. Most of the time that's fine. But for a business that's growing quickly, it can be the difference between moving forward and being told to come back in 12 months.

This is the story of one of those clients.

The situation

Our clients run a successful business that was in a strong growth phase. To keep up with demand, they invested in two very large machines. It was a big decision and a smart one. Between them, the machines were adding around $400,000 a year in profit to the business.

Like most major equipment purchases, the machines were funded through asset finance, and that came with sizeable monthly repayments.

With the business going well, our clients were ready for their next big step. They wanted to build their new home.

The problem

Their most recent financials covered the year before the machines went to work.

That created a real mismatch. When a lender assesses a loan, it has to account for all of your existing commitments, so the new asset finance repayments had to be included. But the extra profit those same machines were generating didn't appear anywhere in the financials yet.

A lender working strictly from those numbers would see all of the cost and none of the income. On paper, the business looked like it had taken on a large new debt without any return. In reality, the machines were paying for themselves and then some.

That doesn't seem fair on a growing business, and it wasn't the true picture either.

The easy answer would have been to wait. Finish the financial year, get the next set of financials prepared, and apply then. But that meant putting the new home on hold for another 12 months, with no guarantee of what building costs or lender policy would look like by then.

What we did

This is where knowing the lenders and their rules really matters.

Every lender assesses self-employed income differently. Some will only work from the last full set of financials. Others have policy that allows more recent trading figures to be considered, particularly where a business can show its income has genuinely changed.

We sat down with our clients and went through everything: the financials, the asset finance contracts, how the machines were being used and what they were bringing in. Once we had the full picture, we went to a lender whose policy allowed us to show the new revenue alongside the new repayments, so both sides of the investment were accounted for together.

With the real numbers in front of them, the application stacked up.

The outcome

It changed the whole trajectory for our clients. Instead of waiting another year, they were able to go ahead with their construction loan and start building their new home now.

Same business. Same machines. Same hard work. Just a lender who assessed it properly.

What this means for you

If you've invested in your business and your financials haven't caught up yet, don't assume you have to wait. Equipment, vehicles, new staff, a new contract or a big jump in trade can all mean your business looks very different today than it did at tax time.

The key is getting all the information together early, so we can find the lender whose policy fits how your business actually works. After more than 20 years working with self-employed clients, it's what we do every day.

You can read more on our Self Employed Home Loans and Low Doc Home Loans pages. If there's business debt in the mix, including tax debt, our ATO Debt Consolidation page is worth a look too. And if you're thinking about buying premises for your business, we also help with Commercial Lending.

When you're ready, meet the team or make an appointment and we'll walk through your situation together.

This case study is general information only and doesn't take into account your personal objectives, financial situation or needs. Client details have been kept general to protect their privacy. Lender criteria change regularly and all applications are subject to lender assessment and approval.