Self-employed · 4 min read
Self-employed? What lenders actually want to see
Your business is doing fine. Here's how to make the paperwork say so.
The problem with good accounting
A salaried applicant hands over a pay stub. Self-employed income arrives as tax returns, financial statements and notices of assessment — and everything you legitimately wrote down to reduce your tax bill also reduces the income a lender will count.
The better your accountant has done their job, the worse your file looks to an automated assessment. It's a genuinely perverse outcome and it catches people out every year.
What helps
Consistency across years matters more than a single strong year. A lender is trying to work out what's durable, not what's possible.
Business bank statements that show steady deposits tell a story a tax return can flatten. So does a clear picture of what the business retains rather than distributes.
Being able to explain the shape of your income — seasonality, a big contract, a deliberate reinvestment year — turns an anomaly into context.
Before you apply
Don't restructure your finances in a panic. Filing differently at the last minute to inflate income tends to create more problems than it solves.
Do get your last two years' returns and notices of assessment in one place, along with business banking. Half the delay on self-employed files is document-gathering.
And speak to someone before you make an offer, not after. What's possible is much easier to shape with time in hand.
Self-employed files are not harder because the income isn't there. They're harder because it takes work to show it — and that work is the job.