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Settled Scenarios
FUTURE INCOME STREAM

Using Future Business Sale Proceeds to Secure Property Purchase

Owner occupied purchase supported by PAYG salary and the remaining tranches of a business sale being paid out over five years.

$1.8m

LOAN AMOUNT

Owner Occ

SECURITY

5 years

SALE TRANCHES

THE STORY

The file, in three parts

What the broker brought, how the credit analyst read it, and what settled

01 · The challenge

The applicant had built a niche alcoholic drinks business with business partners and sold it in 2023 to a larger retail entity. The sale was structured across three tranches over five years, with only the first payment received in October 2023. As part of the arrangement he was retained by the purchasing entity as a PAYG employee on $150,000 a year. He then sought to buy an owner occupied property for $1,800,000. The salary alone did not carry the borrowing, and the money that did was contracted, scheduled and entirely real, but most of it had not yet arrived.

02 · How VMG assessed it

Human underwriting assessed both income sources rather than only the one already landing. The PAYG salary of $150,000 was included as the immediate, verifiable income. The remaining sale tranches were then examined for certainty rather than treated as speculative: the Business Sale Contract set out the amounts and the timing, and an accountant’s letter confirmed the structure of the transaction and the applicant’s entitlement under it. With the obligation documented and the first tranche already paid as scheduled, the future payments were accepted into the servicing calculation. The question credit answered was not whether the money existed, but whether it was contractually committed and evidenced.

03 · The outcome

VMG settled the $1,800,000 purchase of the owner occupied property. The applicant bought the home he wanted without waiting several years for the remaining tranches to be paid.

THE TURNAROUND

Before and after

The same file, before the refinance and at settlement.

BEFORE VMG

Business sold in 2023, proceeds payable across three tranches over five years.
Only the first tranche was received.
PAYG salary of $150,000 is insufficient on its own for the borrowing sought.
Servicing dependent on income contracted but not yet received.

AFTER SETTLEMENT

PAYG salary included as immediately verified income.
Future tranches evidenced by the Business Sale Contract and an accountant’s letter.
Contracted future payments accepted into the servicing calculation.
Purchase completed without waiting out the payment schedule.

💡THE VMG COMMON-SENSE ADVANTAGE

Contracted and not yet paid is a different thing to uncertain. Where the obligation is documented and the schedule is being met, future income can be assessed on its merits.

HOW IT WAS ASSESSED

Human underwriting

Every file is read by a credit analyst, not scored by a system. There is no credit scoring, and no DTI or DSR ratio applied. The product and the terms depend on the individual file, so talk to your BDM about where a similar scenario fits.

Have a similar file?

Test the scenario with VMG credit before you lodge. VMG lends only through accredited mortgage brokers.

Test a scenario

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ATO DEBT

Refinance and ATO debt clearance on alt doc income

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Australian Taxation Office declaration documents alongside Australian currency and a calculator, representing the assessment of small business tax liabilities and alternative lending solutions.

QUESTIONS

Frequently asked questions

It can be considered where it is contractually committed and properly evidenced. Credit will want the underlying agreement setting out amounts and timing, independent confirmation such as an accountant's letter, and ideally a record of payments already made under the arrangement. Speculative or discretionary future income is a different proposition to a contracted entitlement.
The Business Sale Contract is the central document, together with an accountant's letter confirming the transaction and the applicant's entitlement. Evidence that earlier tranches have been paid on schedule carries real weight, as does anything establishing the financial standing of the purchasing party. Bring these to your BDM before lodging so the file goes in complete.
It generally helps. A retained role provides verifiable PAYG income alongside the sale proceeds, and it evidences an ongoing relationship with the party responsible for the remaining payments. Credit will assess the salary in the normal way and consider the employment arrangement as part of the overall picture.

All applications are subject to Victorian Mortgage Group’s standard credit assessment and lending criteria. Terms, conditions, costs and charges apply. This article is general information only and does not take into account your objectives, financial situation or needs.

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