Barclays Wealth & Investments has launched a mortgage designed for UK entrepreneurs and self-employed founders of high-growth businesses.
According to Dena Brumpton, chief executive of Barclays Wealth & Investments, the new mortgage aims to help successful self-employed people to get onto the housing ladder.
She said the product aimed to help those entrepreneurs whose current earnings do not reflect their ability to repay a mortgage.
With traditional lending capped at five times salary, Ms Brumpton said it was important that lenders took other things into consideration, such as cash-flow from an entrepreneurs’ business and investment income.
Barclays Wealth & Investments will consider this, she said, as well as the applicant's monthly salary, when determining eligibility.
Subject to meeting appropriate risk criteria, Barclays will also lend up to five times their total combined income.
Barclays will also consider applications from entrepreneurs with two years trading accounts, whereas some other banks require three years of trading accounts, therefore excluding a range of fast growing businesses.
Ms Brumpton said: "We recognise the sacrifices that entrepreneurs make in order to create the wealth, employment and successful businesses of the future.
"But to date far too many have either been declined a mortgage that they can afford to repay, or have had to pay significantly higher rates with secondary lenders.
"Many entrepreneurs are focused on the immediate growth of their business, choosing not to take a large salary during the early stages.
"However, they may also have other forms of income or cash-flow that mean they are able to repay a mortgage for the home they really want."
One entrepreneur, James Layfield, founder of Central Working, recently obtained an Entrepreneurs Mortgage from Barclays.
He said: "Despite being high-growth I appreciate we are still at an early stage and a traditional lender would have struggled to help me.
"After taking into account my business forecasts and income position, the team at Barclays was willing to be open-minded and work with me to secure the mortgage I needed."
Jamie Smith-Thompson, managing director for self-employed specialist Portafina, commented: "In recent months it has been extremely difficult to place lending for entrepreneurs and the self-employed so any development that could provide a solution in this area is clearly welcome.
"The theory behind the Barclays product looks good and we now need to see if the reality of the underwriting can live up to it."
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