New applications will be subject to a full assessment by an underwriter. It is recommended that before submitting an application you contact your BRM. As a responsible lender, we need to ascertain and confirm whether the sustainability of income has been affected by COVID-19.
All self-employed applicants will be required to submit their latest 3 months' business bank statements, which must clearly demonstrate that trading has been maintained at a level sufficient to support the level of income used within the affordability assessment.
Things to consider prior to submitting a case:
Is the applicant's self-employed business currently experiencing or anticipating any future adverse effects, reduced income levels, as a result of COVID-19? If yes, please provide an overview of the impact.
Has the applicant received any assistance from the Self-Employment Income Support Scheme (SEISS) or any other associated government funding? Income received via SEISS Grants is permitted as a source of income where it has been documented in the tax calculation. These grants must be deemed a replacement of income that would have been received if the business were trading as normal. In addition, the latest 3 months’ business bank statements must demonstrate that the business has resumed trading following the pandemic and must support the level of income used within the affordability assessment.
Has the applicant requested any payment deferrals on any of their secured and unsecured debts? If yes, we will require details of their current position on these.
Bounce back loans & CBILS (Coronavirus Business Interruption Loan Scheme)
Where the business is in receipt of a bounce back or CBILS loan, the repayments will need to be included in the affordability assessment. Therefore when submitting an application where either of these facilities have been acquired, please ensure the monthly repayments are included in the loans and hire purchase section (we may request sight of the loan agreement documentation to verify the repayment amount).
We have produced a helpful 'Self-Employed Covid-19 Impact Sheet' to assist you with covering our requirements. You’ll be asked to upload this as a checklist item once the case has been assessed by an Underwriter.
When submitting your Full Mortgage Application (FMA), to help us accurately complete the initial underwrite of your application and instruct valuation, our minimum requirements are:
- Self-employed applicants (minimum 2 years)
- Accounts/SA302s (minimum 2 full years' finalised accounting information is required)
- Tax Year overviews corresponding to SA302s
- Accountant's details for self-employed limited company cases
- Latest 3 months' bank statements required
If any of the deposit is derived from a one-off drawing from the business, you must discuss the case with your Business Relationship Manager (BRM) before submitting an application.
Professional Landlords (four or more properties) may declare an income derived from property rental, where evidenced by business accounts or SA302 (ensuring the amount used to calculate the relief for finance costs is deducted from the profit from land and property figure - this figure can be found on an SA302) subject to standard self-employed criteria.
Where professional landlord income is deemed as a secondary income, the income used should not exceed that derived from the primary income.