Is It Hard to Get a Loan When You’re Self-Employed? Here’s What You Need to Know!
If you’re self-employed and thinking about buying a home or refinancing, you’ve probably wondered: “Is it harder to get a loan when you’re self-employed?” The short answer? It can be more complex, but it’s absolutely possible and it can also be an advantage, especially with the right preparation and advice.
Let’s break it down.
Why Self-Employed Loans Can Be More Complex
Lenders love consistency and predictability. So when you’re earning a salary, it’s easy for them to see what you make each month. But when you're self-employed, your income might fluctuate, your financials can be a little messier, and you might be minimising your taxable income for tax reasons (which can work against you when applying for a loan).
Instead of just payslips, for a full-document loan you’ll need to provide:
Your last two years’ tax returns and ATO notices of assessment
Business activity statements (BAS) or interim financials if your most recent tax returns are outdated
Evidence that your ABN has been active for at least 1–2 years
Business bank statements or a letter from your accountant
If you don’t qualify for a full-doc loan, don’t worry! We have SO many other options available to secure finance.
Low-Doc & Alt-Doc Loans for Self-Employed Borrowers
If you don’t have two full years of tax returns or your financials don’t reflect your true income, there are low-doc and alt-doc loan options available. These loans allow self-employed borrowers to verify income using:
BAS statements
Business bank statements
Accountant letters
These types of loans often come with slightly higher interest rates or LVR restrictions, but they can be a great short-term solution.
What Lenders Look for in Self-Employed Applicants
Lenders will assess:
How long you’ve been self-employed
Your consistency of income
Your industry and business stability
Any debts or liabilities in your name or your business
Your credit history and savings
A mortgage broker, like us, who understand complex income structures (like multiple entities, company directors, trust setups, etc.) can make a big difference in how your application is presented to the lender.
Tips to Improve Your Chances of Getting Approved
Here’s how to boost your chances of approval as a self-employed borrower:
Keep your tax returns up to date
Minimise business debt where possible
Don’t be afraid to show a strong profit (even if it means paying more tax that year)
Speak to us (your mortgage broker) early – we’ll map out what lenders will be looking for, long before you apply
Consider an accountant who understands lending goals – the right tax strategy matters
Keep your business bank account for business income & expenses only! This can be very helpful if we need to show additional income verification.
More Choice Than You Think: Self-Employed and Ready to Buy
Being self-employed doesn’t mean you can’t buy a home, refinance, or invest in property. It just means the path looks a little different. It can provide more flexibility & options than when you are simply paid a wage.
If you're unsure what you can borrow or what lenders will say about your income, chat to us at Frame Finance. We help professionals, entrepreneurs, and self-employed borrowers structure their finances and find the right lender. You can book a time to chat here.