A payslip is a shortcut. It lets an assessor tick a box in seconds. When you’re self-employed there is no shortcut, so somebody has to turn your returns into a number the policy can accept. If nobody does that, your file gets whichever answer takes the assessor the least effort.
I spent more than ten years in retail banking before I started broking, so I know how a bank handles a file from the inside: what it asks for, in what order, and where things stall. On a self-employed file that’s most of what I bring.
You’ll know where you stand before you apply, not after there’s already an enquiry sitting on your credit file.
What usually brings someone to this page
- You’ve been self-employed for eighteen months and keep being told to come back at two years.
- Your latest year is much stronger than the one before it, and the lender is averaging the two.
- You’re a contractor on a long-term arrangement that looks like employment to everyone except a credit policy.
- Your accountant has been minimising your taxable income, correctly, and it’s now sitting between you and a loan.
- You’re buying a home and every calculator you’ve found assumes a salary.
What a lender is actually looking at
None of this is secret. It’s just rarely written down for the person it’s being applied to.
- How long you’ve been trading
- ABN registration date, GST registration date, and how long you’ve been doing this kind of work. Two full financial years is the usual benchmark. What happens with a shorter history varies enormously between lenders, and time you spent employed in the same field sometimes counts for something.
- Which year they use
- Some lenders take the most recent year. Some average two. Some average two but cap the increase. If your latest year is your strongest, that one policy difference can move the number more than anything else in your file.
- What gets added back
- Depreciation, one-off expenses, extra super, interest on debt that’s being paid out. All legitimate adjustments. Whether a given lender takes them, and whether they want your accountant to confirm it in writing, is a policy question I check before your file goes anywhere.
- Alternative verification
- Where your returns aren’t available or aren’t current, some lenders will work from BAS, business bank statements, or a declaration signed by your accountant. That usually comes with different pricing and different conditions. I’ll show you what the difference costs over the life of the loan before you pick one.
- Everything a salaried borrower is asked too
- Credit file, existing commitments, dependants, living expenses, deposit and where it came from. Being self-employed doesn’t exempt you from any of that. It adds a layer on top.
What I’ll ask you for
- Two years of tax returns and notices of assessment, personal and for the entity if you have one
- Recent BAS lodgements if you’re registered for GST
- Six to twelve months of business transaction account statements
- Your ABN and GST registration dates
- A short note on how you got here. Time employed in the same field matters more than people expect
What you get back from me
- The income figure I’m using, the year or years it’s based on, and the calculation written out.
- A borrowing position you can rely on, before an enquiry is recorded anywhere.
- Which lenders’ policy fits your trading history and which doesn’t, with the reason.
- If an alternative verification route is on the table, what it costs against simply waiting, in dollars over the term.
- What I’m paid on this file, and by whom.
Questions worth asking any broker
Including me. If you’re comparing brokers, these five separate a file somebody has read from a file somebody has forwarded.
- Which financial year are you using for my income, and why that one?
- Which add-backs have you applied, and will the lender want my accountant to confirm them?
- Will this lender accept my trading history, or are we hoping they make an exception?
- What happens to my credit file if this application is declined?
- If you’re recommending alternative verification, what does it cost me over the life of the loan against waiting?
Being self-employed isn’t an obstacle to lending. It’s an obstacle to lazy assessment. Send me two years of returns and I’ll tell you plainly what a lender will see in them, before you decide to do anything about it.
A 30-minute call, no fee and no obligation. Commercial and specialist files may attract a fee, and I’ll tell you before any work starts.