RedZed lending policy combines self-employed income assessment with product-specific broker remuneration terms. For a residential file, identify the facility and commission schedule first, then reconcile the applicant’s declared income with the business records supporting it.
A business bank account can show strong receipts while the owner’s taxable income is lower. Your submission needs to explain what the business earns, what belongs to each applicant and what remains available for repayments.
Upfront and Trail on Settlement
Record RedZed upfront and trail against the nominated facility and the remuneration agreement that applies through your aggregator. The residential product name, settlement amount and commissionable advance need separate fields in your settlement record.
Use the schedule’s definition of eligible advanced funds for the upfront calculation. Keep capitalised fees and undrawn amounts separately identified so neither enters the calculation by assumption. Record the upfront rate and its GST treatment beside that eligible amount. For trail, retain the balance basis, payment frequency and any payment conditions from the same agreement.
For illustration, a $600,000 approved limit with $560,000 advanced leaves $40,000 undrawn. Those figures establish the funding position. They do not establish a commission entitlement on the full limit. Apply the contractual commission base before calculating the expected payment.
Reconcile the expected lender payment with the aggregator’s statement and your brokerage’s retained share. A lender’s gross payment and the amount your brokerage receives are different figures when the aggregator deducts its agreed share or fees.
Clawbacks and Subsequent Borrowing
Assess a RedZed discharge and a substantial balance reduction as separate events against the settlement’s clawback schedule. The event, elapsed period and affected amount determine the calculation under that agreement.
RedZed’s 2024 product guide describes a diminishing pro-rata residential commission clawback. Use the agreement attached to the actual settlement for the recovery period and calculation. A declining schedule cannot be replaced with an assumed full-year percentage.
Keep a discharge payout beside the original advance and upfront received. For a partial repayment, record the balance before and after the repayment. Distinguish a permanent reduction from money still available through redraw or an offset arrangement when applying the agreement’s recovery terms.
RedZed’s application pack distinguishes internal refinance from other refinance and identifies top-ups separately. Keep the following transactions distinct in your records:
- An external refinance pays out another lender. Record that payout and any additional funds separately.
- An internal refinance replaces an existing RedZed facility. Link the old and replacement accounts so the carried balance remains identifiable.
- A top-up increases borrowing. Show the existing RedZed balance and the additional amount, even where the application asks for their combined total.
- A loan split divides the facility into accounts. A new account number alone does not establish an additional advance.
The total replacement balance is not evidence that every dollar earns another upfront. Match the transaction classification and additional funds to the remuneration schedule before booking income.
Track My Trail’s Clawback Risk lists loans still inside their clawback periods, with days remaining and upfront exposure under the applicable rules. That gives you a loan-level view when planning reviews or investigating an adjustment.
Business Income and Evidence Routes
RedZed accepts full doc and alternative income verification for self-employed residential borrowers. Choose the route that explains the applicant’s actual earnings and supplies the documents required for that route.
The RedZed application pack lists recent individual, company or trust tax returns for full doc. Individuals also supply their Australian Taxation Office notice of assessment. Two recently lodged Business Activity Statements (BAS) supplement an accounting period that ended more than six months ago. Builders and developers supply two years of financials.
For alt doc, the pack requires an income declaration supported by one of its evidence routes. These include an accountant declaration, six months of lodged BAS or six months of business trading statements. The BAS and trading-statement routes also require tax-portal evidence. It separately lists director salary credits evidenced by six months of personal transaction statements with tax-portal evidence.
Use the route-specific requirements in the application pack together. Bank receipts alone cannot explain whether deposits are trading income, transfers or borrowed funds.
RedZed’s accountant declaration asks when the accountant started acting and when the current business began operating. Put trading commencement and Australian Business Number registration alongside the borrower’s industry experience. These are different facts, so a recent registration needs its own explanation.
The income declaration separates personal business income from company income and other regular income. Reconcile salary or distributions with the applicant’s share of profits. Avoid counting a transfer from the business to the owner as a second source of earnings.
A lower taxable result does not establish a permitted add-back. For any proposed adjustment, identify the expense, its amount and whether it recurs. Attach the underlying accounts and accountant’s explanation, then carry only the accepted treatment into the servicing calculation.
Credit History and Residency
RedZed’s individual application asks each applicant or guarantor whether they are an Australian citizen or permanent resident. The form states that a negative answer falls outside its eligibility. Complete the status evidence for each person separately.
The same application asks about bankruptcy and Part IX or Part X agreements, including discharge details. A co-borrower’s clean history does not explain another borrower’s credit event. Give each event its own chronology and evidence of the amount outstanding or repayment outcome.
Explain what caused arrears or default and what has changed in the borrower’s finances. Keep a tax debt separate from a credit-report default and show the proposed treatment of each liability. An explanation supports the assessment without establishing that a particular product accepts the event.
RedZed’s identity requirements apply to applicants and guarantors individually. Collect the required identification and complete the specified verification process for each person.
Security and Use of Funds
RedZed’s residential loan range supports purchases, refinancing, debt consolidation and equity release for personal or business use. Residential describes the security. It does not establish that every dollar borrowed has a personal purpose.
Record the property type and address before selecting the product and loan-to-value ratio (LVR). RedZed’s postcode tool assesses locations by suburb or town, with the maximum LVR dependent on the security and the borrower’s circumstances. A residential address alone does not establish an acceptable security value or lending limit.
Break the requested funds into purchase or refinance amounts, debt payouts and cash out. For business funds, name the recipient and what the payment achieves. Distinguish payment of a business tax liability from a general working-capital request.
A residence securing business borrowing still needs the correct purpose assessment and supporting declarations. Keep residential credit, commercial products and short-term facilities separate when recording policy or remuneration terms.
Submission Rationale and Exceptions
A RedZed credit rationale needs to connect the proposed facility with the borrower’s earnings and the evidence supporting repayment. Lead with the decision you are asking credit to make.
Use this order for a file where business cash flow and taxable income differ:
- Identify the borrower and business structure. State the security, requested facility and use of each funding amount.
- Explain the income calculation. Name the evidence period and show how business earnings become income available to each applicant.
- Reconcile unusual items. Identify transfers, one-off expenses and proposed adjustments with their supporting records.
- Explain adverse facts separately. Address credit events, tax liabilities or recent trading changes and show their effect on repayments.
- Name the exception requested. State the policy issue, the evidence supporting the request and the remaining risk.
For example, describe a one-off equipment expense with the invoice and accounts showing where it appears. Keep its proposed servicing treatment separate from the borrower’s declared income until credit accepts that treatment.
Use the RedZed broker support guide for the support channel relevant to the submission. The lender policy directory helps you compare a different lender’s requirements if the proposed structure needs another assessment.
Before lodgement, the application, income declaration and servicing calculation must tell the same financial story. Record any accepted exception with its conditions in the file, then carry those conditions into the final submission. A scenario discussion alone is not credit approval.
