Self-employed Australian expatriates in the hospitality industry based in the United States, seeking a half-million dollar loan to finance an apartment purchase in the central business district of Melbourne.
One of the greatest challenges of this case was that the borrowers were unable to furnish the traditional self-employed income documents (including 2 years of financials and tax returns) to evidence their income earnings. This is primarily due to the nature of their business and being in the hospitality industry, their day-to-day business operations had been detrimentally affected by the global Covid-19 lockdown, directly causing an adverse impact on their documented income which major banks in Australia rely upon.
As a result, the borrowers were turned away from several major banks, whom they reached out to directly prior to being referred to Yarra Capital. The time lost from these failed applications had led the borrowers to approach us at the very last minute (approximately 6 weeks before settlement), leaving us with a limited amount of time to process, seek out an agreeable lender and then negotiate their approval on an exception basis in time for settlement.
Due to the borrowers not being in a position to provide favourable income documents, we had to negotiate alternate means of evidencing their income. The way we did this was through a pre-negotiated alternative method of evidencing their income by providing a declaration from their registered professional accountant in place of tax return documents.
Secondly, in place of company financial statements (P&L), we further brokered an exception to this by providing company bank statements along with a detailed summary of typical operating costs and revenue, which similarly tallied with the accountant's declaration.
With the combination of the alternatives, we were able to convince the lender to no longer require company tax returns and financial statements (P&L) and instead consider an Accountant’s declaration and bank statements we presented as evidence of income. In the end, the couple successfully secured a 75% LVR loan and the settlement drawdown occurred on time without incurring any delayed settlement penalty.
The loan is now fully disbursed and the rental earnings are supplementing the monthly loan instalments.
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