There are a significant number of Canadians who require a loan for self employed people who own a successful business. These people pay all their bills on time, have a good credit rating and can have an above average income and need a loan for self employment.
When you have your own small business there are some tax differences between being employed and self employed, the tax system encourages self employed people to write off every relevant expense they can against their business income. The result is that some self employed people pay little or no taxes yet still enjoy a good standard of living. The down side of showing no income is that the “Notice of Assessment” (NOA) is what many lenders base their lending decision on. The “NOA” is viewed by many lenders as an independent third party verification of your income and most lenders will ask for NOA’s dating back 2 or 3 years, this gives the lender a clear view of the borrowers average income over that time period.
If the potential borrowers “NOA” indicate a low income, most lenders will turn the borrower down for a loan. From the lenders point of view there is no way the borrower can repay the loan and the debt service ratio will be extremely high. When a lender only looks at the paperwork most loan for self employment applications will be turned down, this is why they must look at alternative lenders who have different criteria.
Alternatives lenders will look at your present situation from a more realistic perspective. Here is one example.
A self employed person that has had no stated income on their “notice of assessment” for the past five years. This person lives in a large 4 bedroom home is married with 2 children; the house is valued at $350,000.00 and was recently paid off. Business growth opportunities have led to a need for capital which will increase productivity, expand sales and result in a significant jump in profits.
An alternative lender will get a copy of the person’s credit score and see that it is very high, meaning that this person has a history of paying bills on time. By looking at past income statements from the business the lender can determine which expense is a direct benefit to the borrower. An example is an automobile which can be written off against the business, but is also used as a family vehicle. These write offs allow the self employed person to drive a car for a very low after tax cost, it also allows for deductions relating to insurance, gasoline and repairs.
Loan for Self Employed Program
Our Loan for Self Employment Program allows for financing of up to 90% of the property value and our private mortgage lenders do not require an NOA. You will need to fill out the standard application forms stating income for past year and where you work. Our mortgage agents will arrange for an appraisal and arrange any legal services required, we try to make the “loan for self employed people” process fast as possible with as little stress as possible.
The quickest way to determine if you qualify for our Loan for Self Employment Program is to give us a call. Our professional mortgage team will discuss your situation with you and provide you with various mortgage options. Call us right now to get free credit and debt help.