From Mortgage Professional Australia.
The relaxation of the lending policies at Westpac, CBA and St George are expected to jumpstart property purchases by small and medium-sized enterprise (SME) owners.
All three banks lowered the requirement for SME borrowers to present two years’ worth of financial records as income verification, reducing this down to one year’s worth. Moreover, borrowers no longer need to present their tax returns.
Westpac and CBA also increased the lending capacity percentage for SME buyers to 90% (from the previous 80%) of the purchased property’s value.
Such initiatives are important because “in the past, banks have viewed the SME demographic as risky, despite many owners coming from strong corporate or trades backgrounds with a long successful working history in addition to strong equity in various investment classes,” said Joel Wyld of the Mortgage and Finance Association of Australia.
“Many SME owners have had to settle for low doc loans for a two year period which has deterred them from purchasing property.”
