Forums / Property Investing / Help Needed! / IP Loan with Small Business

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  • Profile photo of magicmagic
    Participant
    @magic34
    Join Date: 2018
    Post Count: 1

    Hi,

    I have a full time salaried job and run a small business (I’m the company director while other family members are the shareholders) part time and am looking to buy an investment property. The business makes a small loss or breaks even. If I pay myself a small wage from the small business would this help with my borrowing capacity or should I just not pay myself because the lender would take into account the larger business loss as a result of paying myself a wage. Would your answer be different if the business was profitable. I’m trying to work out the right balance since I spend time in the business and was wondering if a lower or higher wage or no wage would be best.

    Thank you.

    • This topic was modified 11 months ago by Profile photo of magic magic.
    • This topic was modified 11 months ago by Profile photo of magic magic.
    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    yes it could help. You would need to argue that you are not an owner of the business and do not have access to the company financials. If the shareholders have the same surname as you this may be difficult though.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    If legally you are on a payg as a employee, have been with the company on a similar salary and the business is through some trust structure or your not the sole owner.

    then it should comply for you to be assessed as an employee, providing you do not personally have anything you would have to disclose that would decline you from the broker/loan writer.

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