Who this covers: cabinet makers, joiners, kitchen manufacturers and shopfitters with a factory, and installers on an ABN.
What lenders do differently
The home loan: how the income is read
Returns for two years with add-backs; machinery depreciation and the factory lease are the large items. A company and the owner's return are assessed together.
CNC, edgebanders and dust extraction
Machinery finance over five to seven years with the machine as security; new from a supplier with a quote, used with a valuation. Low-doc to about $150,000 per item; above that, financials.
Vehicles
Chattel mortgage over delivery vans and installers' utes, GST claimed.
The factory
Buying the factory rather than leasing it is a commercial purchase at 65 to 75 per cent LVR, or through a self-managed super fund leased back to the business. Customer deposits and progress payments fund most jobs; an overdraft covers board and hardware between them.
Worth knowing before applying
Customer deposits held are a liability in the return; machinery on the business stays off the home loan side; and the commercial property page sets out the premises purchase.
The tools that fit
- Business and asset finance
- Commercial property finance
- Chattel mortgage calculator
- 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.