Who this covers: licensed plumbers, gasfitters and drainers on an ABN, subcontractors, and plumbing businesses with staff.
What lenders do differently
The home loan: how the income is read
Two years of returns with add-backs for depreciation, interest and one-off costs; one year at some lenders once the ABN is two years old. A plumber who moved from wages to an ABN inside the last two years is read on the ABN income plus the wages history. The chattel repayments on the van are a business expense, already deducted in the return.
The van and the ute
A chattel mortgage over the vehicle: the business owns it, claims the GST in the next BAS, and repays over three to five years with an optional balloon. Lenders finance new and used vehicles to about ten years old at end of term, often with no deposit for an established ABN. The chattel mortgage calculator shows the repayment and the balloon.
Excavators, jetters and tools
Equipment finance on the same basis: the equipment is the security, the term matches its working life, and low-doc approvals for amounts under about $150,000 need only the ABN, identification and a clean credit file at many lenders. Second-hand gear is financed with an invoice or valuation.
Cash flow between jobs
An overdraft or a business line of credit against the business, and invoice finance where larger builders pay on 30 to 60 day terms. Each is assessed on turnover and the ageing of the debtors, not the house.
Worth knowing before applying
Keeping the van on a chattel mortgage rather than a personal loan keeps it off the household side of a home loan assessment; a big instant asset write-off lowers one year's taxable income, which lenders add back if it is identified; and lodged returns are the single biggest help to every application.
The tools that fit
- Chattel mortgage calculator
- Business and asset finance
- Income annualisation 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.