Securing business loan with property

[Lotana]

Hi,

I am looking to get a loan for business/investment using a paid off property as a security. Particularly interested in low docs as I am self employed. All low doc products I could find online say that the purpose couldn't be business. I struggle to understand why this restriction is in place. If my credit history is good, bank statements and BASs show good regular income for years, LVR is not excessive I certainly represent low risk as a borrower. Why would they restrict me from borrowing to invest in shares or in a business?

If anyone is aware of a low doc product without this restriction I would be extremely interested to hear from you.

Cheers,
Lotana

 

[Rolf Latham]

Hey

Investing in Shares isnt a problem.............less risk of total capital loss and ongoing cashflow drain risking repayment.

Your current records show history, a new business wont relcet that history

Speak with an independent broker and see whats available, id be surprised if they cant make it fit


ta
rolf

 

[bcoombs]

Yes depends on the purpose. If its for business they generally ask for the financial details and then they ask for the figures anyway. Depends on the Banks appetite and the LVR level and policy changes daily. If its 60% and under we can find a lender. I did have a client who had some recommendations from a financial planner for investment and they gave cash out on that basis!

Remember brokers are free..... at this stage....

 

[Evachange]

I believe there would be a few lenders that would do the deal, really depends on the details.

 

[Acuity]

Lotana,

Its case by case basis but still lenders out there who will do it.

I would give Adelaide bank as go they still have no cash out restriction policy , but again its still case by case and much depends on how the deal is "presented". Other more flexible lenders out there but generally rate slightly higher and higher break costs/DEF's.

Lenders are "concerned" that giving you the money wont in effect out you in a worst financial position. Its a case where many especially after the GFC pulle out equityto live off and poured into their strapped cash businesses,etc. They are concerned too that when the loan amount is large that you use it "responsibly" hence why many will ask for stat decs, leters from your financial planner,etc.

Plenty of good brokers on this forum from what I have heard and read.


Darren

Hi,

I am looking to get a loan for business/investment using a paid off property as a security. Particularly interested in low docs as I am self employed. All low doc products I could find online say that the purpose couldn't be business. I struggle to understand why this restriction is in place. If my credit history is good, bank statements and BASs show good regular income for years, LVR is not excessive I certainly represent low risk as a borrower. Why would they restrict me from borrowing to invest in shares or in a business?

If anyone is aware of a low doc product without this restriction I would be extremely interested to hear from you.

Cheers,
Lotana

 

[evand]

Why not get a line of credit on your unencumbered property?