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Borrowing Capacity of Self-Employed

Discussion in 'Finance & Banking' started by cckdave, 2nd Jun, 2008.

  1. cckdave

    cckdave New Member

    Joined:
    2nd Jun, 2008
    Posts:
    1
    Location:
    Sydney NSW
    My friend is running a cafe.

    In 2005,

    Revenue: $354000

    Less:
    Opening Stock: $10000
    Plus purchase: $56000
    Less closing stock: ($8000)
    Cost of goods sold: $58000

    Gross profit: $296000

    Expenses:
    Staff's cost: $94000
    Rent: $18000
    Owner's salary: $30000
    Owner's super: $10000
    Deprecisation: $8400
    Overheads: $18000
    Worker compensation: $8040
    Insurance: $6240
    Advertising: $7200

    total expenses: $213800

    Net profit before tax: $82000

    How do we find out the borrow capacity of my friend? Please help?
     
  2. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi CCK

    Best bet is to have a chat with a good broker- most of them are familiar with self employed persons and their lending criteria. Try ASAP Financial Services - Mortgage Brokers Australia and ask for Rolf Latham. He's been around the blocks, knows his stuff and I can tell you, from personal experience, is very good with finding loans for the self-employed.

    Alternatively, if your friend prefers to try a bank or other lender, go prepared with paperwork and I'm sure they'll come up with the answers for him.