Unlocking Mortgage Opportunities for Business Owners: How RFA Alternative Supports BFS Applicants
Unlocking Mortgage Opportunities for Business Owners: How RFA Alternative Supports BFS Applicants
For self-employed professionals and business owners, securing a mortgage can feel like an uphill battle. Traditional lenders often require a two-year average of income, making it difficult for entrepreneurs with fluctuating earnings to qualify. Fortunately, alternative lenders like RFA Alternative are bridging the gap, offering solutions tailored to BFS (Business for Self) applicants.
Flexible Income Verification: A Game Changer for Business Owners
Unlike big banks that require a two-year income history, RFA Alternative takes a more cash-flow-based approach. In fact, they are one of the few lenders still accepting just six months of bank statements to determine qualifying income. This is a game-changer for self-employed borrowers who:
Have recently started a business and don’t yet have two years of reported income.
Operate in industries with low barriers to entry, like rideshare drivers, consultants, or freelancers.
Prefer to retain income within their business rather than pay themselves a high salary.
How RFA Alternative Evaluates Income
RFA focuses on stated income, meaning they analyze the deposits and expenses reflected in bank statements rather than relying solely on tax returns. When underwriting a mortgage, they look at:
Consistent deposits over six months.
Recurring business expenses that impact cash flow.
One-time or discretionary expenses, which may be adjusted for qualification purposes.
For instance, if a borrower’s bank statements show high credit card expenses used for personal purchases like groceries or Costco runs, these can be adjusted to present a more accurate reflection of their business income.
The Advantage of Shorter Business Tenure Requirements
One of the biggest challenges BFS applicants face is proving sufficient business history. Most lenders require at least one to two years in business, but RFA is willing to consider borrowers with as little as six months in operation, depending on the industry.
For low-barrier industries (e.g., Uber, Lyft, consultants), six months may be sufficient.
For larger businesses (e.g., franchises or brick-and-mortar operations), a longer track record is preferred.
This flexibility allows new business owners to access financing sooner, rather than waiting years to build up their reported income.
Credit Score Flexibility & Exit Strategies
With a minimum required credit score of 600, RFA Alternative provides an accessible option for those who may not qualify with prime lenders. Additionally, they offer three strong exit strategies to help borrowers transition back to lower-rate A lenders when they’re ready:
Graduation Program: If a borrower improves their financial profile, RFA can transfer their mortgage to their prime lending division at renewal.
Low Penalty Structure: Unlike most B lenders that charge three months’ interest or an interest rate differential (IRD), RFA offers a flat 1% penalty after one year.
Short-Term Open Mortgage Options: If refinancing into a prime lender isn’t feasible, RFA allows borrowers to extend into an open or short-term mortgage without requalifying.
Who Should Consider RFA Alternative?
RFA Alternative is an ideal fit for:
Newly self-employed professionals needing an alternative to traditional income verification.
Business owners managing variable income who want to use bank deposits rather than tax filings.
Borrowers recovering from credit challenges who need a stepping stone to qualify with A lenders in the future.
Final Thoughts
The lending landscape has evolved, and BFS applicants no longer have to feel shut out of mortgage opportunities. With lenders like RFA Alternative offering flexible income verification and shorter business tenure requirements, securing financing is more accessible than ever.
If you’re self-employed and looking for a mortgage, working with a broker who understands alternative lending solutions can make all the difference. Have questions about whether RFA Alternative is the right fit for you? Let’s chat and explore your options.
BOTTOM LINE
By equipping yourself with comprehensive knowledge of alternative lending solutions and leveraging the expertise offered by Level Up Mortgages, self-employed professionals and business owners can successfully navigate the mortgage approval process and secure the financing they need.
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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