A number of lenders allow you to use residential security for business use. However, only a few lenders do it well, by having dedicated professional lending products in place, administration client / business systems and the appetite for self employed applicants to utilise your residential or investment properties for business purpose loans with the added benefit at competitive residential home loan rates.
Regardless of the borrowing amount or loan structure, i.e., in personal names or company names you can borrow at residential rates with no rate loading because of business use.
Utilising a residential security property, you can borrow up to 80% of the value on the property. For a maximum borrowing of 80% against a property, the lender will require you have available the last two years of personal and business tax returns which have been submitted to the Australian Tax Office (ATO). If you are unable to provide two years of ATO submitted tax returns then the lender may rely on business financial management accounts and the last 12 months of Business Activity Statements (BAS) to verify the business income for loan borrowing serviceably for a maximum borrowing of 70% against the value of the property.
As long as you have residential security with enough equity to accommodate the refinancing of loan or loans to a maximum borrow of 80% of the property, you are able to utilise residential property interest rates for business purposes.
You are able to retain several loan splits on a property loan. i.e. You can name your Home Loan and have another split named ‘XYZ business’ and even a third split loan called ‘Over Draft for XYZ business’, all on residential home loan rates.