Securing a mortgage loan is a common choice for those aiming to own a home, with banks consistently setting new records for loan approvals as the real estate market experiences continuous growth. This trend instills optimism in entrepreneurs contemplating their future prospects. Financial institutions readily extend mortgage loans to business owners, a topic we delve into below, covering fundamental aspects such as the requisite duration of business operation and the necessary documentation.
Venturing into business is an increasingly favored avenue for income generation. As of the third quarter of 2023, the Central Statistical Office reported a registration of 86,179 companies, highlighting the growing popularity of entrepreneurship. For individuals embarking on the entrepreneurial journey, a critical consideration arises when contemplating a mortgage loan – will banks acknowledge business income in their capacity calculations?
Within this article, we explore:
This exploration aims to provide a comprehensive understanding of the intersection between entrepreneurship and mortgage acquisition, shedding light on the criteria financial institutions consider when evaluating business owners' eligibility for such loans.
Let's delve into the foundational question: what types of businesses qualify for mortgage loans? While sole proprietorship stands as the most familiar and frequently chosen option, it's not the sole contender. All registered businesses are listed in CEIDG (Central Registration and Information on Economic Activity). Beyond sole proprietorships, banks also acknowledge income generated by various forms of partnerships, including civil partnerships, partnerships, and general partnerships. These entities' income is factored into the creditworthiness calculation proportionate to their shares.
However, a word of caution: this inclusion doesn't extend to shares in limited liability companies and limited partnerships. Financial institutions approach these entities differently, and the documentation required for mortgage application differs from what's discussed in this article. Therefore, it's crucial to understand the specific requirements pertaining to each business form when seeking mortgage financing.
When considering the minimum duration of operating a business to qualify for a mortgage loan, various institutions have distinct criteria. Many lenders, such as Millennium, PKO BP, Pekao SA, and under specific conditions, Santander, require a continuous business operation of at least 12 months. Additionally, some banks, like mBank, seek a closed accounting year spanning from January to December, emphasizing the importance of running and settling the business with PIT for a minimum of 12 months.
Extending the horizon to a business history of at least 24 months paves the way for eligibility across all banks. However, exceptions exist, introducing flexibility into the established norms. One noteworthy exception is the option to apply for a mortgage loan even with less than 12 months of business operation, known as the B2B contract.
Under this arrangement, individuals who have been employed under a standard employment contract for at least 6 months with their current employer or within the same industry can pursue a mortgage application with just 3/6 months of business activity. This accommodating approach is embraced by various banks, including mBank, Alior, BNP Paribas, Millennium, Santander, and PKO BP. It opens a pathway for those transitioning from employment to entrepreneurship, acknowledging the stability brought by prior work experience.
In conclusion, when seeking a mortgage loan, all banks consider business income as a crucial factor. It's essential to highlight that not all banks exhibit the same preference for clients with business income, leading to variations in creditworthiness assessments. The disparity among banks underscores the importance of selecting the right financial institution that aligns with your business profile.
Among the institutions known for offering favorable terms and efficient calculations of business income are mBank, ING, and Alior. These banks stand out in providing a comprehensive and advantageous approach to evaluating business income, offering potential borrowers a more favorable creditworthiness standing compared to other financial entities. Choosing a bank that understands and values your business income is a strategic step in securing the most advantageous mortgage terms for your specific financial situation.
Remember that if you have any doubts, I am happy to offer you advice and assistance. Let's meet, you will find that my help in choosing the best mortgage can be invaluable.
Feel free to comment. Is the topic of credit analysis interesting for you? Let me know in the comment. Will be happy to help clarify all issues. It is important to me that every topic regarding the mortgage is absolutely explained.
Mortgage broker
Michal Kaplon
os.Stefana Batorego 80
60-687 Poznan
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