Lenders read a self-employed income through a tax return written to minimise tax. The two documents want opposite things. The job is to present your real position in a form a lender can assess, and to pick the lender whose policy suits how you actually earn.
We arrange home and investment lending for people who own the business they work in. Full-doc where the returns support it, alt-doc where they do not yet, and a structure that keeps the company, the trust and the personal borrowing working together rather than against each other.
Who this is for
- Company directors
- Sole traders
- Contractors
- People paid in dividends
- Owners whose taxable income dropped on purpose
Who it is not for
- Anyone deliberately not lodging, or with no plan to lodge
- Anyone with no BAS and no management accounts
- Anyone whose ATO tax portals are not clear across every individual and entity
What lenders look at
Every lender assesses self-employed income differently. Some take the latest year, some average two, some add back what your accountant deducted and some do not. The difference between two lenders on the same returns can be the whole purchase.
- Years of returns. One or two, depending on the lender and the loan type
- Add-backs. Depreciation, interest, super and one-off costs that can be added back to income
- Company versus personal income. Whether profit retained in the company counts, and at which lenders
- Full-doc versus alt-doc. Tax returns, or BAS and an accountant's declaration
- BAS. The last four quarters as evidence of current trading
- Clear ATO tax portals for you and every entity you control
Loan size and timing
Full-doc lending runs up to 80% without LMI, and higher with it. Alt-doc lending is available, including above 80%, at a higher cost. Which one suits you depends on where your returns are up to and what the purchase needs, and that is a decision we make together before the application, not a fallback after a decline.
The timeframe is usually set by your accountant, not by us or the lender. Returns, declarations and management accounts have to be lodged or prepared before anything can be assessed. If the accountant is weeks away, the plan is built around that.
Before anything else: Clear ATO tax portals across every individual and entity involved. Lenders check this early, so we check it first.
The mistake we see most
Being told to wait two years. Someone looks at a short trading history or a deliberately low taxable income and says come back when the returns look better. In the meantime two years of equity growth, two years of rent and two years of the right structure are lost.
The right sequence is often the opposite: value what you hold, split the facilities by purpose, settle the entity question and then buy, while the current income still supports the assessment. Dion walks through it in episode 109.
A real example
A self-employed client owned a home worth around $3 million with no debt on it, and assumed that meant they could borrow whatever they needed. They could not. Lenders assess provable income alongside security, and the client had reduced their income on purpose. The timing trap was real: wait, and the income on paper gets lower, not higher.
The strategy was to arrange a fully offset, interest-only facility against the home while the current income still supported the assessment. The cash sits in offset costing nothing until it is deployed, and the capacity is locked in before the next return lands. The full case is episode 106, with the client's sign-off.
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How we work
Kris, our finance strategist, runs the first conversation on residential lending. Every engagement follows the same four steps.
- 15-minute fit callWith Kris and the team. We learn how you earn, what you own and what you want to buy, and whether this is a fit. If it is, we book you a Discovery Call with Dion.
- Discovery Call with DionA free 30-minute conversation about where you are, where you want to get to and what has to be true first. If we can help, we say how. If we cannot, we say that too.
- Finance StrategyThe written plan: which lender reads your income best, full-doc or alt-doc, what the add-backs do to capacity, whether the company or trust should borrow, and the order of moves. Delivered once your returns and BAS are in.
- ImplementationWe lodge with the lender the strategy chose, manage the questions that self-employed applications always attract and run it through to settlement.
Access to a wide panel of major banks, non-banks and specialist lenders through Connective, plus off-panel lenders where the deal needs it.
What it costs
The fit call and the Discovery Call cost nothing. The Finance Strategy is a one-off fee for the work of designing the structure: the entity, the lender sequence, the splits and the order of moves. We quote it on the Discovery Call, once we know the scope. If the strategy does not leave you knowing exactly where you stand and exactly what to do next, the fee is refunded in full.
Common questions
Do I need two years of returns?
Not always. Some lenders assess on one year of returns, and alt-doc lending uses BAS and an accountant's declaration instead. Which route is right depends on the purchase and how your income is trending. Waiting two years by default is the expensive option.
My accountant minimised my income. Can I still borrow?
Usually, yes. Depreciation, interest, super contributions and one-off costs can be added back at many lenders, and retained company profit counts at some. The returns have to be presented the right way, to the right lender.
Do dividends count?
At the right lenders, yes, with a history behind them. How dividends are treated varies more than almost any other income type, so the lender choice matters more than the dividend itself.
Can my company or trust borrow?
Yes. Whether it should is a structure question: asset protection, who services the debt, how the lender treats the entity and what it does to your personal capacity for the next purchase. We work it through with your accountant.
What is alt-doc and what does it cost?
Alt-doc lending uses BAS, bank statements or an accountant's declaration instead of full tax returns. It is available, including above 80% LVR, at a higher cost than full-doc. It suits people whose returns do not yet show the income the business is actually producing.