A talented software developer in his late twenties was looking to buy a brand new Mercedes Benz as his one which was 10 years old was getting a little tired! The purchase price for the new car was $82K.
For his young age, he had 6 years of solid industry experience predominately as a PAYG Lead Developer or Senior Software Engineer previously with several companies.
He decided to become self-employed to earn more income by being able to take on work from several sources at a time rather than the salary of one employer.
He had a strong net asset position with two properties, over $150K in savings and a greater amount in shares.
The major challenge was that the lender had concerns that our client didn’t have enough experience ‘running a business’, and that being technically good at software development was viewed separately.
Our client demonstrated his technical skills having worked on several impressive projects. However, when we discussed this scenario at a high level, the feedback from a major / tier one lender was that the software development industry talent pool was saturated and he had only started his business five months ago.
Due to this the client only had four months of trading income available from management accounts and BAS. Generally even for car loans an ABN registration for at least six months would be required.
To overcome this challenge, this is what we did.
As a result the loan was approved with a tier one major bank at a very competitive rate (3.88% pa) and over a 5 year term. Repayments are $802 per month over 5 years with a $18K balloon payment.