We’ve made changes to our lending criteria approach
When it comes to self-employed we understand that some applicants may have seen changes in their income due to Covid-19, some positively and others more negatively.
We reviewed our risk approach during the pandemic and put in place a number of temporary criteria changes to make sure that as a responsible lender we were making the right lending decisions. We’re continually reviewing these changes and wanted to share with you our current approach.
What’s really important to know is that we’re very much open for business!
If your applicant’s personal circumstances have changed over the past 18 months our underwriters may need a bit more information. We’re not asking you to submit anything above what’s already detailed in our submission guidelines but to help you understand our approach, here’s what we may ask for:
Applicants who’ve seen no impact
If your self-employed client hasn’t experienced any changes due to the pandemic we’ll consider their latest year’s income, as long as this is sustainable.
Applicants who’ve seen a positive impact
You may find that businesses such as retailers, and restaurants who’ve moved to delivery or manufacturers who’ve seen an increase in demand, have all seen a positive increase in income specifically due to the pandemic.
Applicants who’ve been negatively impacted
For businesses such as retail (non-essential), leisure, hospitality, travel and tourism, who haven’t been able trade due to the pandemic or experienced a reduction in income, we may need to take a closer look at their finances.
Owner occupied – 1 years trading
We’ll lend to those with 1 year’s accounts who’ve not been impacted during the pandemic and we’ll consider lending up to 85% LTV (excluding fees).
Buy to let – 1 years trading
1 year’s trading is only available to landlords not using income to support the loan (top slicing) and if they can provide the additional information listed above.
Our lending decisions will still be made on a case by case basis and we’ll consider all self-employed clients who’ve taken government grants and/or bounce back loans.
We hope this helps you better understand our lending approach and if our underwriters do need more evidence to make their lending decisions, they’ll be in touch.