Weekly Kath's Credit Crunch 17th March 2025 🌟

Welcome FundTap as an Educational Sponsor 2025- Watch our quick video here!

Invoice Finance (Debtor/ Factoring Finance) – Quick Explanation

Invoice finance, also known as debtor finance, is a cash flow solution that allows businesses to access funds tied up in unpaid invoices. Instead of waiting 30, 60, or sometimes even 90 days for customers to pay, a lender advances a percentage of the invoice value (usually 70-90%) upfront. Once the customer pays, the remaining balance (minus fees) is released to the business.

Example of How a Small Business Can Use Invoice Finance

Imagine you’re a small fashion designer with your own label. You’ve just landed a massive order from Target—they want 1,000 pieces of one of your designs. Huge win, right? But there’s a catch… Target won’t pay for 60 days.

In the meantime, you need to:
🧵 Buy materials to make the products
📦 Package and ship the order to Target
💰 Pay your staff and cover other business expenses

With all your cash tied up in this one order, your business is struggling to stay afloat. You can’t wait two months to get paid—you need cash now.

That’s where invoice finance (debtor/ factoring finance) comes in. Instead of waiting 60 days, Fundtap advances a percentage of the invoice upfront (up to 90%). This gives you the money to pay for materials, wages, and shipping, so you can keep your business running without the cash flow stress.

When Target finally pays, you receive the rest of the invoice balance (minus lender fees). This means you can accept big orders, grow your business, and keep things moving—without waiting months for payment. 🚀

NAB

Good news! We’ve just expanded our LMI waivers.  Previously, LMI policy waivers have been available for eligible medical, dental and veterinary practitioners, as well as pharmacists and optometrists.

Professional Services:

• Qualified solicitors, lawyers, and barristers. No more partner-only restrictions!
• Qualified accountants, financial analysts and actuaries.

Medical Professionals:

• Qualified physiotherapists and chiropractors are now included in the LMI waiver policy - added to our Medico category.

For more information, jump  into The Brokers’ Bible Membership or the NAB broker Portal and  visit the LMI page on the NAB Broker Portal via the following pathway: Products > Residential Products > Lenders Mortgage Insurance (LMI) > LMI Waivers.

From Friday 21 March 2025 we can only accept a one-year lodged tax return to verify self-employed income for applications where the LVR is 80% or under. The one-year tax return must be accompanied with confirmation that it has been lodged – this can be either from their accountant or from the ATO.

For home lending applications with LVR over 80%

• There’s no change to the requirement to provide two years of financial information to verify self-employed income for home lending applications with an LVR over 80%.
• However, you can now provide either two years’ tax returns or two years’ financial statements (profit & loss).

For home lending where financial statements are used to verify income

• If you provide two years’ financial statements and want these to be assessed based on the most recent year, this option is still available when you provide commentary outlining why recent performance is a more appropriate indicator of future performance – as you do today.

BankFirst

Update March 2025 - The Bank First 90% No LMI product will now be restricted to a maximum loan amount of $800,000, leading to a maximum allowable purchase price of $880,000. Applications that are submitted or received before this date will be evaluated according to the existing lending policy.

La Trobe Financial

Here’s what’s new: 

• 80% LVR up to $5million now available for Residential Full Doc and Lite Doc in metropolitan NSW, QLD and VIC
• 75% LVR up to $10million now available for Residential Full Doc and Lite Doc, Construction and Bridging Loans
• 70% LVR up to $10million now available for Commercial Full Doc, Lite Doc, SMSF and Lease Doc

CBA

From  Monday 10 March 2025, we’re expanding our CommBank offer to cover Lenders Mortgage Insurance / Low Deposit Premiums (LMI/LDP) for all eligible nursing professionals to eligible paramedics, police officers and firefighters.  Full  Policy Details inside The Brokers Bible and Commbroker.

From  Monday 10 March 2025, the Prefabricated Housing (prefab) policy will be uplifted to allow the release of funds prior to the dwelling being affixed to the land. 

Important things to note:  

• Prefab dwellings are defined as homes built partially offsite in factories to then be transported and permanently affixed to the land with all services connected, often referred to as transportable homes. Modular and kit homes fall under this classification.  

• For prefab build contracts of up to $1.5 million, progress payments will now be permitted prior to the dwelling being affixed to the land. 

• The total amount disbursed prior to land affixture cannot exceed 120% of the land value (less the land debt) or 60% of the build contract price, whichever is lower. 

Foster Care income

We will use 90% of the income for servicing, verified through:

• Three months credits to an account; and
• Letter from the foster care agency or equivalent government body confirming the benefit amount.
• The lower of the two amounts will be used for servicing. When submitting an application, present two servicing calculators:

Include children under foster care as dependants and foster income.
​Exclude children under foster care as dependants and do not include foster care income.
Both scenarios need to pass and the customer must be entitled to receive this payment for the next three years to be eligible.

Security size: living area requirement.

We have updated our acceptable securities policy for small apartments and will now accept apartments with a minimum living area of 30m2 for Lenders Mortgage Insurance / Low Deposit Premium (LMI/ LDP) applications.

UBANK

Parental Leave

• We have removed the requirement for 12 months of employment history with current employer.

Expenses

• If the borrower is solely responsible for the expense, this must be captured in the customer’s declared living expenses.
• When the borrower is jointly responsible for the expenses, the portion for which the borrower is responsible must be captured in their declared living expenses.
• Where full income generated from an asset has been included for servicing, including where jointly owned, the full amount of expenses related to the asset generating the income must be included.

Directors Wages - Income Verification

• Regular account credits showing a minimum most recent six months of income (if account credits vary, use the lowest value) AND
• Current financial year (latest) ATO income statement; AND
• Last Financial year Individual tax return (ITR) with Notice of Assessment (NOA) OR Last Financial Year ATO income statement

Existing Holiday Rental – Income Verification:

• Holiday rental must be verified via:
• An Annual statement issued by the managing agent/company OR
• Most recent Individual Tax return with Notice of assessment -
  The verification document must include the property address and the amount of rental received for a minimum 12 months to cover periods of seasonality. The period must cover the full financial year, ending 30th June of the most recent financial year as at the application submission date.

Seasonal Employment:

• Seasonal employment is now verified with payslips or account credits showing a minimum of 12 months income

AMP Update: New Broker Portal Launching Q3 2025 - watch the update HERE 🚀

AMP is set to launch its new, fully digitalised broker portal in the third quarter of 2025—exclusively on the LoanApp Platform. This upgrade brings cutting-edge technology into the pre-submission process, helping brokers streamline applications before they even hit submit.

Key features include:
✅ Automated verification of income & expenses—reducing manual checks.
✅ Smart flags for potential issues—giving brokers the chance to address concerns upfront.
✅ Enhanced document upload & commentary options—allowing brokers to strengthen applications before submission.

This new approach is designed to eliminate back-and-forth with the assessment team, reducing rework and ensuring a smoother, faster approval process for brokers and clients alike. 🚀💡

 EVENTS

Next Week! ☕ Coffee & Credit with Kath - Talking all things Self-Employed - 📢  Join via THIS LINK

See you next week!

Kath