Who this covers: mechanics and workshop owners, smash repairers, auto electricians, tyre and exhaust shops, and mobile mechanics on an ABN.
What lenders do differently
The home loan: how the income is read
Returns for two years with add-backs; a workshop with staff is read on the company and the owner's returns together. Mobile mechanics with a single van are read like any sole trader.
Hoists, booths and diagnostic equipment
Equipment finance over three to seven years with the equipment as security; spray booths and larger fit-outs are financed as fit-out loans with a longer term where the lease supports it. Low-doc approvals to about $150,000 per item for an established ABN.
The workshop premises
Buying the workshop rather than renting it is the common commercial purchase: a commercial loan at 65 to 75 per cent LVR assessed on the business's capacity to pay rent to itself, or through a self-managed super fund leased back to the business. The commercial property page sets out the assessment.
Parts and the gap to payment
Fleet and insurance work pays on terms; an overdraft or invoice finance covers parts and wages between payments, assessed on turnover and the debtors.
Worth knowing before applying
Equipment financed through the business keeps it off the home loan assessment; a lease with a short remaining term limits fit-out finance; and the commercial property and SMSF pages cover the premises purchase.
The tools that fit
- Business and asset finance
- Commercial property finance
- SMSF commercial property
- 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.