What's in store for self-employed client's?
As the financial year is coming to an end in March 2017, self-employed clients needs to prepare themselves if they would like to get into real estate market.
Your business could be in different stages of its life cycle. Some of you would have started your self-employment in the past 2 years or so and therefore your income may not be what it should be, since the business did not reached its potential.
Some of the businesses may have achieved its full potential, but could not have delivered huge profit/income due to one-off marketing expense or some capital expenditure to the business.
Especially if your business is a manufacturing business, then you need to wait for a few months to recover the costs you have paid now and you may have working capital issues. These are a few examples one can come across if you are self-employed.
It is a great time for the self-employed to prepare what had happened in the previous financial year and prepare your company’s financial statements as quickly as possible. The first thing the bank requests is whether we had recent financials for the business before they look at possible finance
either to buy your first home or an investment property or you would like to inject some funds to your business.
Preparation is the key. You will have more chance of getting finance to fund your projects, if you have your financials are ready and you know other critical numbers in your business are in your fingertips. Prepare a business plan with your accountant’s help for the next financial year. Your projections for the next financial year will paint a good picture for the lender, to assess your application form for finance.
What happens if self-employed clients do not have the above? It is not an end of the road. There are some secondary lenders who will be in a position to finance your projects and the costs associated with it are not that high, when you compare with normal interest rates given by trading banks. The additional costs are well justified to secondary lenders for the risk taken by secondary lenders to fund your project. If you have necessary equity with your home, then secondary lenders will assist you with financing options, with their normal lending criteria.
Going to a secondary lender is only a stop gap arrangement, until you get your financials in order so that we can refinance your loans from secondary lender to a trading bank at the earliest possible.
This option is available for only self-employed clients and if you would like to venture into getting more information on the above, please arrange for a call back.