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by uma
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By David, Director, Twelve Grains Capital 

New insights from CoreLogic shows house prices are set to continue falling into early 2023. Despite this, the last month saw new home loan commitments fall by 8.2% as banks tighten lending criteria amidst the soaring cost of living and consecutive interest rate rises. 

As a result, things could get even harder for small business owners looking to secure a home loan in the year ahead. 

Typically business owners are subject to more stringent lending criteria than a PAYG employee as a result of their ‘higher risk’ classification by most lenders. 

However, leading Sydney broker and Director of Twelve Grains Capital, David Sutantyo, says that with basic preparation, there is little reason why business owners can’t secure a home loan in 2023 with the same ease as a full-time employee.

“Self employed individuals can often feel like they’ve got to backflip through hoops to be approved for a home loan, particularly when compared to their PAYG counterparts,” said Sutantyo. 

“We see a significant opportunity for business owners to secure a loan in the year ahead if they know where to find the right lenders, and how to set their best foot forward.”

  1. Keep personal and business finances separate 

Regardless of whether you’re applying for a home loan or not, it is always important to keep business and personal finances separate. The distinction keeps finances neat and orderly while preventing personal assets from becoming tied up in the business. 

“To streamline your route to loan approval, you want to make it as simple as possible for the bank to assess your financial position,” said Sutantyo. 

“Unfortunately business owners don’t have the luxury of ticking this box with a few paychecks and bank statements.

“With most lenders, providing as little as one payslip (even from a new employer) as an income verification is sufficient for a lender to determine loan affordability. However, with business owners, the majority of lenders are demanding to see at least two years’ worth of financials.”

This typically includes company and individual tax returns, BASes, Notices of Assessment and more. 

  1. Prepare a budget and plan ahead

Having a strong awareness of where your money is going can help identify areas for additional savings while planning for any upcoming expenses. The end of the year provides the perfect opportunity to hit reset on your financial habits and lay down a play for the year ahead. 

“Preparation is everything and being aware of any potential upcoming costs can save you from having to dip into savings or potentially leaning on other credit lines,” said Sutantyo. 

  1. Stay on top of repayments 

It’s never been more important to stay on top of repayments and bills to keep your credit score squeaky clean. 

“Try and minimise any new loans or finance in the coming months, and stay up to date with bills and invoices,” says Sutantyo. 

“A credit check is one of the first things the bank will do when assessing your suitability for a loan, so it’s your best interest to do everything you can to get this in good shape.”


  1. Get a good team behind you

“There is nothing small about running a small business,” said Sutantyo. 

“Often tidying up finances and combing through the nitty gritty falls to the bottom of a long to-do list. Arming yourself with a good accountant, broker and lawyer can take care of intricacies while you focus on running your business.”

Establishing a team of trusted experts can help alleviate the burden of applying for a loan while simultaneously ensuring your best interests are protected. 

  1. Find a deal that suits your unique goals

There is no one size fits all approach to home loans, particularly for self-employed individuals who may benefit from advantages outside of low interest rates. 

“Time is the most valuable asset for most business owners, and often this means quick, hassle free options are more desirable than lowest-interest loans that have complex approval processes,” said Sutantyo. 

“Flexibility and efficiency is the most sought after feature as it cuts out the hassle of having to tick all the banks’ boxes and jump through many different hoops.”

Looking beyond bank lending can open the door to a suite of flexible lending options that offer quick turnarounds, flexibility with documents and policies, accessibility and more. 

“Non-bank lenders cater to a gap in the market where most lenders fail to cater to. They have a broader range of loan types that allow self employed individuals a fairer shot at securing a home loan.”


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