Loan Servicing
Loan Servicing is the process of checking whether a borrower can afford loan repayments based on income, expenses and cash flow.
It is closely linked to
Borrowing Capacity,
Bank Statements,
Repayment History,
and Credit Assessment.
Lenders use servicing ratios across
Business Loans,
Equipment Finance,
Vehicle Finance,
Working Capital Loans,
and Low Doc Lending.
Related blogs include
7 Business Costs You Can Finance
and
5 Red Flags a Business Loan Is Bad.
Why Loan Servicing Matters
Servicing determines whether a loan is affordable and sustainable.
Strong servicing improves approval chances and access to better rates across the
Tradie Hub,
Truckie Hub,
Café Hub,
and Whitecoat Hub.
What Loan Servicing Looks At
- Business income and turnover
- Operating expenses
- Existing loans and liabilities
- Net cash flow and surplus
- Director income and personal commitments
- Bank statement conduct
Official info: asic.gov.au
What is Loan Servicing?
Loan Servicing is the process lenders use to check if you can afford loan repayments based on cash flow.
What affects Loan Servicing?
Income, expenses, liabilities, repayment history and bank statement conduct.
Does poor servicing cause declines?
Yes — if cash flow is insufficient, lenders may decline or reduce the loan amount.
Is servicing different for Low Doc loans?
Yes — Low Doc lenders rely more on turnover, bank statements and real-time cash flow.
Can Loan Servicing be improved?
Yes — improving cash flow, reducing expenses and clearing debts can strengthen servicing.
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