Clydesdale Bank offering retained profit mortgages

by Aaron Strutt

Nov 26 2015

Clydesdale Bank for Intermediaries is one of a limited number of high street lenders accepting retained profits within businesses for mortgage affordability purposes.

If you are running a limited company or a limited liability partnership and you leave funds within your business, Trinity may be able to help you secure a larger mortgage loan through Clydesdale.

The bank will accept personal income calculated from the financial statements of the business. They will always want to see the last three years actual accounts, but they will use the three-year average of the net profits before tax - plus the director’s remuneration.

Regardless of whether the shareholders only take a small portion of the net profit as salary and dividends, they will use the average of the last three years of the applicant's share of net profit as the basis of affordability. Other lenders tend to simply accept salary and dividends as income.

Aaron Strutt, product manager at Trinity Financial, says: “If there is a deteriorating trend in net profits, they may base their assessment on the latest years figures. A deteriorating trend is defined as two consecutive falls in income. An increase in year two followed by a decrease in year three is not typically classed as a deteriorating trend.

“We regularly help small business owners who leave money in their company, either to be more tax efficient or to protect themselves in case they receive some unexpected bills.”

Trinity’s contact at Clydesdale Bank for Intermediaries recently won the Business Development Manager at The British Mortgage Awards 2015.

For help to secure a retained profits mortgage, call Trinity on 020 7016 0790.