Who this covers: carpenters and joiners on an ABN, licensed builders running jobs, and building companies with staff and subcontractors.
What lenders do differently
The home loan: how the income is read
Two years of returns with add-backs; for a building company, the company return and the director's together. Lenders ask licensed builders about work in progress and contract liabilities because a builder's return can swing between years; a steady two-year average reads best.
Building your own home
A licensed builder constructing their own home is assessed on an owner-builder basis at many lenders: a lower LVR, usually 60 to 80 per cent, a fixed cost schedule, and progress inspections. A few lenders treat a licensed builder's own build as a standard construction loan with the builder's own fixed-price contract. The construction loan calculator shows the drawdown and interest by stage.
Utes, trailers and tools
Chattel mortgage over vehicles and trailers, equipment finance for larger tools and site equipment; low-doc approvals to about $150,000 for an established ABN, GST claimed in the next BAS.
Working capital on a build
Progress payments on client builds arrive after each stage; materials and subcontractors are paid before. An overdraft, a trade account facility or invoice finance against approved progress claims covers the gap, assessed on the contracts and the business's turnover.
Worth knowing before applying
A builder's own home loan and the business's facilities are assessed together, so a large overdraft counts against the home loan; a project with a client dispute shows in the returns; and lodged, consistent returns are the single biggest help.
The tools that fit
- Construction loan calculator
- Chattel mortgage calculator
- Business and asset finance
- Working capital and overdraft calculator
- Equipment finance calculator
- What lenders ask for: checklists
Not sure whether the business needs an overdraft, or how big: the working capital calculator works it out from sales, payment terms and stock, with presets for a typical business like yours.
Policies on all of the above differ lender to lender and change without notice; the value of the conversation is knowing which lender's policy reads your payslip best on the day. Understanding how your income is read before you apply is what makes the application calm.