Whether you are buying property through a trust, a company or your self managed super fund, the lender is assessing more than just your income. They are assessing the structure itself. Lendology is a boutique brokerage that specialises in getting structured lending approved.
A discretionary trust gives the trustee flexibility over how income is distributed among beneficiaries. That flexibility is exactly what makes lenders cautious. They need to see that the trust deed authorises borrowing and the provision of real property as security. Most lenders require the trustee and all adult beneficiaries to provide personal guarantees. Lendology identifies which lenders have the most accommodating trust lending policies and how they assess the income flowing through the structure.
Unlike discretionary trusts, unit trusts have fixed entitlements based on each unit holder's interest. Lenders generally treat unit trust income more predictably because the distribution is tied to the unit holding rather than the trustee's discretion. However, fewer lenders are willing to accept unit trust borrowers and the guarantor requirements can be more complex when there are multiple unrelated unit holders. Lendology knows which lenders accept unit trust structures and how they handle the guarantor requirements.
When a Pty Ltd company borrows for property, the directors (and often their spouses) must provide personal guarantees. This means the lender assesses the company financials and the personal financial position of the guarantors. The company's trading history, profitability and balance sheet all matter. Lendology presents the company and personal positions together in a way that gives the lender confidence in both the entity and the individuals standing behind it.
Self managed super funds can borrow to purchase property through a limited recourse borrowing arrangement (LRBA). The property must be held in a separate bare trust, cannot be lived in or rented to any fund member, and must satisfy the sole purpose test. SMSF lending carries higher rates, lower LVR limits (typically 70% to 80%) and fewer lender options. Lendology works with the specialist lenders in this space and coordinates with your accountant and solicitor to ensure the structure is compliant before lodgement.
When you borrow in your own name, the lender assesses your income, your debts and the property. When you borrow through a structure, the lender adds an entirely separate layer of assessment. They need to understand who controls the entity, who benefits from it, who is guaranteeing the debt and whether the governing documents permit the borrowing at all.
This is where many applications stall. Not because the borrower cannot afford the loan, but because the structure has not been presented in a way the lender is comfortable with. Different lenders have materially different appetites for structured lending. Some will not touch a discretionary trust. Others will lend to a trust but require every adult beneficiary to guarantee. Others are more pragmatic. Lendology knows which lenders sit where on the spectrum and matches the structure to the right lender before lodging.
Your accountant prepares financial statements that show how much the trust earned and how that income was distributed. The lender takes those same numbers and applies their own assessment methodology, which can produce a very different result.
Some lenders assess the distributions received by the individual borrower or guarantor. Others look at the underlying net profit of the trust before distributions. Some average two years; others take the most recent year. Some allow depreciation and interest to be added back; others do not.
This means the same trust, with the same financials, can produce materially different borrowing capacity depending on which lender assesses the application. The difference is not marginal. It can be the difference between approval and decline.
Lendology models trust income across multiple lenders before recommending where to lodge. We work with your accountant to ensure the financials are presented in the format each lender expects and that supportable add backs are clearly documented.
Structured lending requires more documentation than a standard home loan. Each item serves a specific purpose in the lender's assessment. Lendology prepares a tailored document list for your situation and reviews everything before lodgement.
Trust, company and SMSF lending across Adelaide. Specialist advice for structured borrowers.
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