Managing director - no profits

tzia_2

We are looking to remortage as trapped in a high fixed rate at the mo and want extra money to convert our garage . By adding the fees for early redemtion and the money for the garage we could still save ourselves up to £180 a month by remortgaging. But my husband is a MD and the business has made no profits in the last 3 years. They broke even in 2010, lost in 2011 due to investment in product due to be released this year and broke even in 2012. He is on PAYE and his wage just about covers what we need to borrow. Does the business have to had made profits for us to be considered?
Many thank

Just to add he is main shareholder with over 40% and the company has ot paid any dividends as it has made no profits (it is a small ltd company)

Wh05apk

Most lenders if he has more than a 15-20% shareholding will use SA302 figures, which are basically salary + dividends, if would be worth ordering these from HMRC to have ready, and see what income figures they show. Once you have these, you may get up to 4-5x the average for the last 2 years figures.

kingstreet

It depends.

Does he have equity in the business?

If he does, the lender will want accounts for the business if he owns more than 20% of it.

If he doesn't, payslips and P60 should be sufficient evidence of income. Whether it's enough, I can't tell from the scant information you've provided.