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How to get finance when you’re self-employed

Obtaining finance from a bank is often more difficult for the self-employed, than for borrowers who get a paycheque each week. Lenders typically require a significant amount of documentation and proof of income for self-employed borrowers, and their lack of a steady income can make it difficult. However, there are several ways for self-employed individuals to improve their chances of securing financing.

Proof of income

One of the biggest challenges faced by self-employed borrowers is providing proof of income. Unlike traditional employees who receive regular pay slips, self-employed individuals may have income streams that go up or down. In some cases, their current income might not truly reflect how much money they earn. This can make it difficult to prove their ability to repay a loan or meet the requirements for a mortgage.


One simple solution is to keep detailed financial records. By tracking income and expenses, self-employed individuals can provide lenders with a clear picture of their financial standing. This can include tax returns, bank statements and profit and loss statements. A great way to do this is with the help of accounting software. This will give a lender or accountant an easy snapshot of how your business is doing financially.


Track record

Another challenge faced by self-employed borrowers is the perception of risk from the lender's perspective. Without a steady paycheque or regular employer, lenders may view self-employed individuals as a higher risk of default. However, this does not necessarily mean that securing financing is not possible.

Many banks will lend to self-employed borrowers when provided with the appropriate documentation. For example, two years' worth of tax returns. This shows the lender that the business is profitable over a longer period of time which reduces their risk.


Low doc loans

Self-employed borrowers can consider working with a mortgage broker who specialises in providing financing to self-employed people and business owners. There are certain lenders that are more accustomed to working with business owners and are able to better assess the needs of this type of borrower.


They also provide different home loan products – like low doc loans – that don’t require full tax returns. Some might be able to provide finance based on BAS statements, bank statements or an accountant’s declaration. These lenders may be more familiar with the challenges faced by self-employed individuals and have more flexible lending requirements.


Credit score

It's also important for self-employed borrowers to be aware of their credit score (both individual and company). A good credit score can go a long way to securing financing. By paying bills on time, reducing credit card balances and checking their credit report for errors, self-employed borrowers can improve their credit scores over time and increase their chances of obtaining finance.


There are a lot of benefits to being self-employed and running a business. While finance for

a home might be harder than for a typical employee, there are still options out there.

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