The Situation
The clients, a married couple, own a technical-services company that one of them has run for 33 years, first alongside a parent who held the majority of the shares and, since the parent's death in 2022, outright; the other manages the office. Their four-bedroom home in northern BC was worth about $800,000 and carried a private first mortgage of about $430,000 at a high rate, plus roughly $170,000 across nine cards, lines of credit and a vehicle loan, some of it in active collections. The company also owed the province on a lease, and over three years the couple had paid that bill down from about $118,000 to about $33,000.
The Challenge
The private mortgage and the card payments together left little room each month, and the collections kept the credit scores at 579 and 571, which rules out a bank refinance. The business made the money, close to $1 million in deposits over twelve months, but a company that size with its owners' personal finances in this state does not read well on paper, and the file had already been answered once with a private mortgage that fixed nothing and cost a great deal.
The Solution
We refinanced the home with an alternative lender under its bank-statement program: twelve months of the company's deposits documented the revenue, 60% was deducted for expenses to arrive at a conservative owner's income of about $400,000, and the spouse's salary was set aside entirely, leaving the file at an 18% gross and 27% total debt-service ratio with room to spare. The new residential mortgage of about $640,000, 80% of value on a 30-year amortization and a one-year term at about 8% in 2023, paid out the private lender in full, cleared every card, line and collection, and covered the closing costs from the proceeds. The business premises, a commercial property the company owns and occupies, stayed untouched.
The Outcome
One mortgage at an alternative lender's rate instead of a private one, no unsecured debt, no collections, and a credit file that can rebuild toward a bank. For an established business owner, the cash moving through the company is the income; a lender that reads bank statements will count it when a tax return never could, and a private mortgage should be a bridge measured in months, not the place a 33-year business owner is left to sit.