Adelaide Bank has announced it will be getting rid of lo doc commercial loans after a full review of its Smartsuite Commercial product offering.
This “will begin the exciting task of rebuilding our value proposition” and will eventually provide “broker partners with more options and product enhancements,” the bank said in a statement.
Effective from 1 July, the bank will delete its lo doc loans from its product offerings. No further lo doc applications will be accepted after close of business on 30 June.
Adelaide Bank has also restricted the release of equity for unverified business or investment purposes to $200,000 or 10% of the security value (whichever is lower). Working capital is not acceptable under these changed conditions.
The lender has also altered its Simple Doc declaration to ensure that clients declare that any income generated from property is sufficient to meet loan commitments while acknowledging that they can comfortably afford repayments without financial hardship.
Finally, the client will also be required to declare that they have other income sources available to service this loan if the need arises.
Lo doc commercial loans already in the systems, either awaiting settlement or formal approval, will be honoured as will loans submitted following the current lending policy.
“As previously announced, we are re-constructing our commercial offering to incorporate on our off balance sheet programs and are simplifying the product suite pending the review,” Damian Percy, general manager of Adelaide Bank told Australian Broker.
Additionally on 1 July, Adelaide Bank will also rollout an updated Smartsuite Commercial Application form to brokers through the website.
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