As companies are seen as their own entity they need to be able to prove they can repay the loan in their own right. However, new companies will have issues as they are unlikely to have any financial records to prove it can repay the loan.

In the case where a new company has no financial records we were able to use the directors as guarantors to the loan.  In simple terms the director guarantees the repayment of the loan with their income.  This means that the directors need to provide evidence of their income and disclose any other debs they have.  Most lenders will want to see that the guarantors are Directors or Beneficiaries of the Company or Trust.

In a recent case study we had the clients had purchased a property at auction.  At the time the director of the company was working part time to care for their new daughter, hence his income was not as high as usual.  Due to the nature of his wife’s employment, to protect their assets she was was not a director or beneficiary of the company or trust (a common structure for those who are in positions which involve legal risk), hence most lenders would not consider her income as contribution to repay the loan.  Whilst a number of different ‘other’ avenues and scenarios were explored, it was eventually decided to go with a lender that allowed his wife to act as guarantor, even though she was not a director or beneficiary of the company or trust.

So if you are looking to buy a residential property in a Company Name CONTACT US and we can help…