Last month I gave you a few tips to turn a “No” into a “Yes”, here are a few more to further improve your chances

Financial Statements

If you are self employed you will have likely encountered the phrase “We need two years signed financials”.

You can get a loan approved with less than 2 years, but generally, no less than 12 months and then the lender likes you to be continuing in the same field/industry.

Management Accounts

It seems to happen so often, that the need for finance happens months after your last set of financials were produced and as a result are out of date.

We would recommend that you get a print out from a platform like Xero and use this as evidence as to how your business is tracking before your next financials are ready.

If you have recently won any large contracts it could be worthwhile advising the lender of this in case your application is borderline and provide them with evidence.

Property type

Sometimes a decline has nothing to do with you, it might just be the property you are wanting to buy.

The most common problem I see, is a property having no Code Compliance sign off from Council, so always check this before you make an offer. You won’t believe the problems this can cause even if guarantees are given by the vendor…

The second biggest issue I see is relating to apartments, where either the size is too small for many lenders or the borrower wants to borrow more than the bank is willing to lend against this asset. This varies so much, you do need to the research before you commit, especially off the plan.

Bridging finance

Many people want to buy another property before they have sold their own. Banks will look at the total mortgage of the two properties and will test your ability to repay this debt not the debt you should be left with when you have sold old property.

Non-bank lenders have stepped into this space and so long as you have enough equity in the combined properties, they will lend you money for up to either 6 or 12 months.

Development Finance

This is a big one for the banks, as they want no more than 20% of their loan book in this category. Right now, they are still keen to lend, but they are generally only looking to lend to existing clients who have a good track record and who have largely de-risked the project via presales, fixed price contracts etc.

If a bank declines an application, there are a number of non-bank and private lenders who are willing to help.

Commercial Property

Different rules apply around lending on Commercial Property and so if your deposit isn’t large enough- generally 40%- then you will receive a decline. In addition to needing a larger deposit, you will be asked to repay the loan over 15 years, which may put a strain on your cashflow.

However, as above, there are lenders willing to lend and with good structuring advice a lot of deals can be turned from a No to say Yes.