Recently we were asked to provide feed back by Advisor magazine on self employed borrowers and how lending has changed in recent years. As discussed with Advisor magazine the landscape for self employed solutions has dramatically changed with major and prime lenders restricting their self employed lending policies. The need for specialist advice for the self employed and non conforming segment has risen dramatically as a result.
There are a multitude of low doc loans, cash flow loans and many other types of facilities in the market, though not all business income and business structures are suitable for all the different loan types and lenders. Some of the loan types may have higher interest costs, though are short term and suited where a clear exit strategy is evident, others might be finance against invoices, while other loans are assessed against the monthly cash flow.
The traditional low doc loan is still a favourite facility in business lending because of the various, and at times lumpy income streams with self employed.
Self employed borrowers contribute a substantial and viable portion to the economy. However, their revenue streams and business models can be very different to what the mainstream lenders deem to be acceptable for their lending. Because of the variance in business models, lending solutions often have to be made by a lending specialist, not just a regular broker. Understanding a business and the intricate income details along with business security structures allows us to accurately identify the most suitable lender for the business needs. Understanding a business and the requirements for finance, whether low doc loans, secured finance such has second mortgages or caveat loans, unsecured business finance, invoice finance and the various policies for each facility is paramount in providing suitable finance.
More on our interview with Advisor magazine can be read by clicking on the advisor icon below: