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Home loan providers are set to cater specifically to start-ups as the Australian entrepreneurial space continues to grow.
HashChing, an online marketplace for pre-negotiated home loans has expressed the difficulty for Australian entrepreneurs to obtain finance with no credit scoring.
"In a regulatory environment being ever tightened by APRA – it would appear the risk profile of lenders is forever shrinking, virtually closing the door on home loan options for start up founders and entrepreneurs," the company stated.
"Talk to anyone who’s ever tried to get a home loan without a regular payslip or evidence of recurring earnings – and the answer is almost universal – NO."
“As start up founders ourselves – we know first hand how hard it is to secure finance,” said Mandeep Sodhi, CEO of HashChing.
According to Mr Sodhi, there are now home loan options on offer to Australians which provide a new approach to securing finance.
Where a borrower has more than 20 per cent equity in the start-up, the lender will assess the serviceability of the borrower based on their share of business earnings instead of payslips to meet the responsible lending requirements. While there is a legal requirement to be able to service to loan and repay the debt – the loan’s terms and conditions are far more favourable to people with new or emerging businesses.
“The reality is there are very limited options open to entrepreneurs and start up founders, when it comes to home loan finance," said Mr Sodhi.
“Lenders demand certainty of someone’s earnings and evidence of regular payslips – and for businesses that are just starting or raising capital, the focus might not be on ensuring any founder is being paid a salary."