In Canada, self-employment has been steadily on the rise for decades and now accounts for approximately 15% of total employment in the country. Whether it’s to achieve a better work-life balance or a burning desire to be one’s own boss, the reasons people choose the business for self path are varied. However, many of the challenges faced by these entrepreneurs are the same — especially when it comes to obtaining a mortgage or financing to grow their business from traditional financial institutions.

Morgan’s story: Accessing equity for business growth

As the owner of a thriving music school in Toronto for the past 17 years, Morgan (not her real name) is an entrepreneurial success story. In addition to her home, Morgan has also been able to buy three rental properties. Her most recent rental property purchase was a duplex a year ago in an up and coming area of downtown Toronto.

To fetch the going market rental rate, the new property required significant upgrades. However, Morgan could see the potential in this duplex and the investment opportunity it presented once renovated. She elected to draw from a Home Equity Line of Credit (HELOC) on her principal residence and from her savings to complete the renovations.

A year later, the renovations are complete, and the units are all fully rented at a higher price. Now, Morgan is looking ahead to her next big project — expanding her music school’s services to offer recording studio time. To do so, she hopes to refinance her properties to pay down the HELOC and get her savings back to finance her growing business.

However, as the duplex was purchased only a year ago, Morgan ran into difficulty when trying to refinance it with her bank. With her dream of expanding her business hanging in the balance, Morgan reached out to a mortgage broker to learn what alternative options might be available to her. Undaunted by the challenge, her broker consulted with Home Trust to find a solution, and Morgan was presented with several options that would allow her to move forward with her planned business expansion.

Ultimately, Morgan was able to refinance her property at 80% of its value to replenish her savings and add recording studio time to the list of services offered at her music school.

Your story matters

With multiple properties to consider and the non-standard income reporting that is a fact of life for business for self individuals, Morgan’s story seemed complicated. However, she also had a long-established business, an excellent credit history, and a steady income stream from her rental properties. But none of these positives would have come to light had her broker not taken the time to gain an understanding of Morgan’s whole financial picture.

It is this practice of looking beyond the initial details with our broker mortgage partners that makes Home Trust different from other financial institutions. When it comes to evaluating the criteria to approve mortgage financing, we believe your story matters. By working with a qualified mortgage broker who partners with Home Trust, business for self customers like Morgan can have access to options that allow the opportunity for growth.

Visit our website to learn more about the mortgage and refinancing opportunities available to self-employed Canadians from Home Trust.

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