Barclays launches new mortgage specifically designed for startup founders

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  • Hot on the heels of the news that Barclays has agreed a sponsorship deal with Catalyst Inc in order to help support entrepreneurs in Northern Ireland, the bank’s wealth management division has revealed the details of a new mortgage that has been specifically designed to help the founders of high-growth businesses get onto the property ladder.

    The new mortgage addresses an issue that is regularly faced by tech entrepreneurs in the UK, where traditional mortgages are normally capped at five times salary but the founder’s current salary may not reflect their ability to repay a mortgage.

    The structure of the new mortgage will mean Barclays will now take into account cash-flow from an entrepreneur’s business and investment income, as well as their monthly salary, when determining eligibility.  Subject to meeting the bank’s risk criteria, Barclays will also lend up to five times the startup founder’s total combined income, not just their salary.

    Barclays will also consider applications from entrepreneurs with two years trading accounts whereas some other banks require three, therefore excluding a range of fast growing businesses.

    Dena Brumpton, Chief Executive of Barclays Wealth & Investments, explained: “We recognise the sacrifices that entrepreneurs make in order to create the wealth, employment and successful businesses of the future. But to date far too many have either been declined a mortgage that they can afford to repay, or have had to pay significantly higher rates with secondary lenders.

    “Many entrepreneurs are focused on the immediate growth of their business, choosing not to take a large salary during the early stages.  However, they may also have other forms of income or cash-flow that mean they are able to repay a mortgage for the home they really want.”

    Raheel Ahmed, Head of Barclays Mortgages, added: “With the creation of wealth increasingly coming from entrepreneurs, we should be making it easier for them to buy a home and that is why we have worked with our Wealth business to develop an entirely new form of personalised mortgage proposition.”

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