1. www.kmc.co.uk A real life approach to self-employed lending Steve Griffiths, Head of Sales & Distribution THIS PRESENTATION IS FOR INTERMEDIARIES ONLY

2. Hands up if you are self-employed?

3. Source: Parliament.uk 2005, Labour Force Survey – Office for National Statistics

4. Normal lending from ‘normal’ lenders So why would you go to a specialist?

5. Or

6. Small family business Company Accounts Turnover£150000 Salary(£10000) Other administrative expenses(£25000) Operating profit£115000 Profit on ordinary activities before tax£115000 Tax on profit(£21000) Profit for the financial year£94000 Dividends paid(£40000) Profit after Dividends£54000 Sole company director chooses to take a salary of £10,000 and dividends of £40,000 Company Accounts Turnover£150000 Salary(£10000) Other administrative expenses(£25000) Operating profit£115000 Profit on ordinary activities before tax£115000 Tax on profit(£21000) Profit for the financial year£94000 Dividends paid(£40000) Profit after Dividends£54000 Salary + DividendsSalary + Profit Income used for affordability = £50,000Income used for affordability = £104,000

7. Contractors MarketingEngineeringNHSEntertainment Compliance

8. Contractors v Permanent v Contractor Permanent Annual income = £50,000 Daily rate£192 Monthly income before tax£4,166 Monthly-take home£3,027 Work related expenses (p/m)£300 Monthly income£2,727 Daily rate = £192 Annual income£50,000 Monthly income before tax£4,166 Work related expenses (p/m) are tax deductable £300 Monthly take-homeCirca £3,200

9. Stages of self-employment

10. Source: Parliament.uk 2005, Labour Force Survey – Office for National Statistics

11. Underwriting Underwriters are vital to understanding self-employed income Understanding and consistency Read accounts Speak to accountants Provide a single point of contact

12. Added opportunity Healthcare Sick pay Life insurance Pension

13. www.kmc.co.uk Thank you THIS PRESENTATION IS FOR INTERMEDIARIES ONLY