Self-employed ·
How lenders assess self-employed income (and what to have ready)
Self-employed income isn't harder to prove — it's proven differently. Here's what lenders actually look at, and the documents that make the conversation easy.
If you run your own business, you've probably heard that getting finance is "harder" when you're self-employed. That's not quite right. It's different — and most of the difference comes down to how income is evidenced, not whether it's good enough.
Why the PAYG checklist doesn't fit
A salaried applicant hands over payslips and the picture is complete. A business owner's income is spread across tax returns, business activity statements, bank statements and, often, an accountant's view of what the business really earns once legitimate deductions are added back.
Lenders know this. What they need is a consistent, verifiable story about what you take home and how stable it is.
What lenders are really asking
Under all the paperwork, a lender is trying to answer three questions:
- How much do you actually earn? Not turnover — the amount available to service a loan after business costs.
- How stable is it? Trading history, whether income is trending up or down, and how seasonal the business is.
- Can it be verified? Which documents back up the numbers, and whether they agree with each other.
Different lenders weight these differently. Some use your most recent year's figures, some average two years, some accept alternative documents in place of full financials. That variation is exactly why the lender you approach matters.
Full-doc, low-doc and alt-doc, in plain English
- Full documentation means two years of personal and business tax returns, notices of assessment and financial statements. It gives lenders the most complete picture and usually opens the widest range of options.
- Low-doc or alt-doc pathways exist for people whose returns aren't finalised or don't reflect current trading. These typically rely on a combination of business activity statements, business bank statements and an accountant's letter. Fewer lenders offer them, and pricing and conditions can differ.
Neither is "better". The right pathway is the one that presents your income accurately to a lender who accepts that evidence. Our self-employed home loans page goes into these pathways in more detail.
Add-backs: the part people miss
Business owners often minimise taxable income legitimately — depreciation, one-off expenses, superannuation contributions above the minimum, interest on a loan that's being refinanced. Many lenders will add some of these back when assessing your capacity. Whether a given item is added back, and how much, depends on the lender's policy — which is why the same set of financials can produce a very different outcome from one lender to the next.
What to have ready
You don't need everything on day one, but the conversation moves faster with:
- The last two years of tax returns and notices of assessment (personal and business), if they're done
- Recent business activity statements
- Three to six months of business bank statements
- Your accountant's details
- A short note on anything unusual — a one-off contract, a quiet quarter, a change in structure
Where a broker fits
A broker's job here is matching: understanding how your income actually works, then approaching lenders whose policies suit it — rather than sending you to whichever one happens to be on the corner. It's the difference between being assessed on what you earn and being assessed on a form that wasn't built for you.
If you'd like to talk it through, check your self-employed options. It takes about two minutes and there's no credit check.
This article is general information only. It doesn’t take into account your objectives, financial situation or needs, so consider whether it’s right for you before acting on it, and talk to us about your circumstances. Lending criteria, terms, fees and charges apply.