Vendor Finance

Moving from Vendor Finance to Bank Finance

There have been thousands of vendor finance contracts that have been written over the last decade nationwide. Not all banks will acknowledge a vendor finance contract. Some of the inherent problems are:

  • Vendor finance payments were not considered “genuine savings”
  • A number of banks will only accept the “contract price” not the actual valuation when applying for a loan
  • Trying to explain to a bank what vendor finance was

At Property Loan Advisor we specialise in helping people transition from Vendor finance to Bank finance.

So how do you know when it’s time to move from Vendor finance to Bank Finance?

Can you meet the following criteria?


Do you have at least 10% or even better 20% equity in a property?

Bear in mind the property will be valued by a bank valuer, the equity will be determined on what the Bank thinks the property is worth not what is on your contract says. Hopefully, the property value has gone up since you commenced the contract.


Do you have 2 years of continuous employment? Changing employment is OK as long as it is in the same industry.

Changing from working for a salary to being Self-employed can be problematic. A self-employed person needs to have at least 2 years of trading in their own business before they can apply for a loan.


Do you have the income to be able to service the loan and meet the required repayments?

The best indicator of this is that you have a good track record with the vendor financier. A mortgage broker or financial institution (bank) will do an affordability / due diligence check to confirm that you can afford to service your loan over its lifetime.

Credit Rating

Do you have a clean credit record?

A very small default such as a telephone bill default of a $150 can prevent you from being able to qualify for bank finance. If you have suffered a bankruptcy, you will find more difficult to qualify for a loan. Generally speaking, a 20% equity position will be required to meet the criteria.

Get your FREE brochure today!

The Automated Money System – The Ulimate Five Step Guide to Financial Freedom

1 Step 1
First Name
FormCraft - WordPress form builder