is there any way to avoid "self employed" being lumped with "on the dole"...?

seriously?

i tell all these local branch managers of my investing plans, my 10 year timeframe, my wanting to mix resi and comm, my CF~ scenarios, my JVs and my australia-wide buying plans, and they jump up and down and get all excited about it. i have graphs, research and summaries of my investment strategy, all in a neat 10 page PDF doc, for them to read before our appts. they can't get me in quick enough.

then i say i'm self employed on a 70% LVR MAV package and all of a sudden i'm being shown the door before i show financials.

i've had 6 banks knock me back and 2 brokers take me on with gusto only to give up.

i'm seriously considering Bank of China now.
 
Can you make your business a company? then you are a "just an employee" (albeit a director) like the rest of the sheeple with payslips and a "regular" job. :)

You don't even have to say you own the company. You are just "purchasing officer for XYZ pty/ltd" or whatever. Don't make up too fancy a name :D

Good luck.
 
You don't even have to say you own the company. You are just "purchasing officer for XYZ pty/ltd" or whatever.

Unfortunately, banks have a habit of running searches to see which companies you may be a director of... And as a general rule, they don't like being lied to.
 
This is one reason why im reluctant to branch off and start my own business.

Borrowing money and being self employed seem to not go hand in hand.

Working for someone else and getting a regular pay packet seems to be what a lot of banks prefer.

I believe this is what holds a lot of people back from investing.

Cheers

Mick
 
Working for someone else and getting a regular pay packet seems to be what a lot of banks prefer.

It's funny though, how I can give my staff a payslip and they can go and borrow money; and yet for awhile, the banks were reluctant to lend *me* anything... even though I'm the one providing the payslips for my staff. :confused:
 
BC

If you have the financials and its set up right you should have nil issues. Now if you have fried your CRAA because of enquiries, you need to take a different approach.

Perhaps you need to have someone look at this with a decent eye, most branchies and
many brokers have no desire to do the work to make a deal work, coz there is a PAYG deal just behind you.

One thing you need to keep in mind is that lenders dont give a hoot about what will be. They care about your recent history, and to some extent the now. Thats what credit scoring is. Its a much better predictor of loan quality than human interference usually.

I have said it before and will repeat it. Being self empoyed isnt a problem.

If you have 100 k taxable as a mid term self employed, or 100 k as a mid term PAYG, a lender will not treat you any differently IF its set up right in the first place.

ta
rolf
 
If you have 100 k taxable as a mid term self employed, or 100 k as a mid term PAYG, a lender will not treat you any differently IF its set up right in the first place.

The other issue with this is the accountant, they consider it their job to minimise your tax. So even if you earn $100k you may only show a $30k taxable income. Just because most of your expenses are pre tax, which would give you more disposable income than the PAYG but less borrowing power.

Tricky choice?

Cheers
Graeme
 
BC

If you have the financials and its set up right you should have nil issues. Now if you have fried your CRAA because of enquiries, you need to take a different approach.

no - there are all informal chats over the desk - no applications. i'm one for staying off the system as long as possible.

Perhaps you need to have someone look at this with a decent eye, most branchies and
many brokers have no desire to do the work to make a deal work, coz there is a PAYG deal just behind you.

shame really - my deals are pretty solid.

One thing you need to keep in mind is that lenders dont give a hoot about what will be. They care about your recent history, and to some extent the now. Thats what credit scoring is. Its a much better predictor of loan quality than human interference usually.

I have said it before and will repeat it. Being self empoyed isnt a problem.

If you have 100 k taxable as a mid term self employed, or 100 k as a mid term PAYG, a lender will not treat you any differently IF its set up right in the first place.

ta
rolf

chuck in a trust (not buying in it, just receive income from it), a pty ltd and a good accountant and i've been accused "of "hiding money" so why would we help you?"
 
The other issue with this is the accountant, they consider it their job to minimise your tax. So even if you earn $100k you may only show a $30k taxable income. Just because most of your expenses are pre tax, which would give you more disposable income than the PAYG but less borrowing power.

Tricky choice?

Cheers
Graeme

yes absolutley.

this year i'm bringing forward a lot of invoices and wearing a huge tax bill so i can secure something.
 
Hi Quoll

To some extent yes.

The accountant doesnt sign off on the returns, the borrower does.

In reality, if the business has 70 k of expenses, that are related to the business, then the disposable income to the owners of the business is 30 k.

While a small proportion of these costs may be related to Personal use expenses such as a car phone, life insurance etc, the reality is that many businesses simply dont cut the mustard, and their owners make decisions on expenses that improve their lifestyle, and thus reduce disposable income,thus reducing tax.

Sure, some of these expenses can be added back in, and if there are retained earnings or other "controlled" distributions, often these can be used too.

Unless there are dodgy deductions, or there is an undeclared cash component, it would be a very creative accountant that can reduce in hand taxable from 100 to 30 permanently, and stillleave the balance "in the discretion of the borrower" . Sure we can shuffle the money around a bit here and there, but the liability will follow u around.

ta
rolf
 
if you have retained profits in an old company somewhere just declare a dividend. it will boost your personal income and you may even get some franking credit refunds.
 
I don't seem to have had any problems getting finance even though I'm self employed. I do have two years of solid tax returns and profits though but I earn less than 100k. I was even pre-approved with Comm bank 6 months ago for 300k+ when I ony had 1 year of returns but I took on a loan with Westpac for a smaller amount. The only issue I have had with finance is when i'm too higly geared and I don't get the full amount I expected or my current PPOR was seen as a 2nd rate suburb with Westpac and was only approved for P & I.
 
Can you make your business a company? then you are a "just an employee" (albeit a director) like the rest of the sheeple with payslips and a "regular" job. :)
lol yeah right.

seriously?
No such thing lol
i tell all these local branch managers of my investing plans, my 10 year timeframe, my wanting to mix resi and comm, my CF~ scenarios, my JVs and my australia-wide buying plans
This may sound strange, but imo don't ever tell more than one deal at a time. Anything thing else is a "maybe".
I have graphs, research and summaries of my investment strategy, all in a neat 10 page PDF doc, for them to read before our appts. they can't get me in quick enough.
Even worse. Maybe you been to too many seminars. I need to fit on one page and be understandable by a 10 yr old.
then i say i'm self employed on a 70% LVR MAV package and all of a sudden i'm being shown the door before i show financials.
This is the part I'm not to sure of. Does that mean your MAV has a max LVR of 70% or 70% is your current LVR?
I agree with Rolf, these days it does'nt seem to matter that much that you are self employed, but I do think it matters how you present it and what you say.
Bank people are like girlfriends & wives, the moment they hear a word or phrase they don't like, anything said after does not matter :rolleyes:
And like Rolf I too think you may not be speaking to the right people and this may include brokers.
Brokers are taught "if you don't think the prospect will get the loan, politely decline and tell them you can't help them". so if your dealing with a broker who has no idea of what it means to live in tight credit times, good chance you'll be dismissed as a waste of time for the PAYG "waiting behind you".
Without much details of your situ I think you may need to change your approach a little and dig a little deeper into the bank staff layers.
Maybe talk to other biz owners (try chamber of commerce meetings) and ask around for a sympathetic ear to the self employed.
 
This may sound strange, but imo don't ever tell more than one deal at a time. Anything thing else is a "maybe".

I was thinking a similar thing, life aint a race. Don't pver complicate things, Just go to them with each killer deal one at a time and keep your 10 year plan for private consumption only
 
MAV when borrowing was an 80% LVR minimum, but i had 70% LVR.

i have equity. i just need an LOC against it so i can put down cash deposits to secure great deals.

FTR, i had 2 cars of deductions fall inside the one year, i had an CF- IP and about $20k of super contributions paid after tax.

there were a lot of un-deductible expenditure.

this year will hurt, on paper - the tax bill will be huge.
 
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