Self-employed borrowers are frequently told they can't borrow what they should be able to. Usually the problem isn't the income – it's how the income has been presented, and which lender it was presented to.
Two lenders can look at the same tax returns and arrive at very different borrowing capacities. Some add back depreciation; others don't. Some consider retained company profits; many won't. Some require two years of returns; others accept one. Some treat a recent increase in income as real; others average it down.
None of that is visible from the outside, and it's the single biggest reason self-employed borrowers get a disappointing answer from the first lender they try and assume it's the market's answer. It usually isn't.
Reading a set of financials properly – understanding what sits behind the taxable income figure, what's genuinely a one-off, and how the structure distributes profit – means I can work out what your position actually supports before we approach anyone.
It also means I can have a sensible conversation with your accountant rather than just forwarding documents.
Some lenders offer alternative documentation options for borrowers whose circumstances don't suit full financials – for instance where the most recent year's returns aren't yet available but the business is trading strongly.
These generally come with different rates and conditions than a standard loan. They're a legitimate tool in the right circumstances and an expensive shortcut in the wrong ones.
Most lenders want to see two years of trading, though some will consider one year in the right circumstances, particularly where you were previously employed in the same field. It's worth asking rather than assuming you need to wait.
For most full-documentation loans, yes. Falling behind on lodgements is one of the most common obstacles for self-employed borrowers, and it's worth getting current before applying.
Not necessarily. Self-employed borrowers with complete financials often access the same rates as anyone else. Higher rates generally apply to alternative-documentation products, not to self-employment itself.
