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How owners of 8-month-old business secured a home loan

A couple whose loan application banks rejected and mortgage brokers couldn’t bring to fruition is thanking basic financial skills for moving into their new dream home. 

Their 8-month-old business was too new, and ostensibly too risky, for banks to decide on their home loan application, says the couple, who wish to keep their identity a secret. 

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“Usually, banks are very careful giving a loan to businesses that have been operational for less than two years. That’s what we were told when we decided to apply for the home loan,” says Gaurav, name changed. 

Turns out it was just a matter of convincing the bank by putting together a proper business plan, revenue projections, cash flow, etc.

It’s quite common for owners of new businesses to run into a wall when trying to get loans, says Nathan Miglani of NZ Mortgages, South Island’s biggest mortgage brokers who have now opened shop in Auckland. 

“We see this all the time. In this case, my 10 years of experience in the financial sector came handy. The main thing is to chip at the banks’ biggest fear that the business might not work and they will incur a bad debt,” says Miglani, who took on the case after the couple made a failed attempt with another mortgage broker. 

“You have to very clearly demonstrate to the bank that your business is rock solid, and the business case is pretty strong. Not just that, we have to get more granular and project cash flow and other nitty gritty.” 

The bottom line is, Nathan says, banks are in the business of providing loans and they are more than happy to oblige if you present your case well.

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