Who Is Considered Self-Employed
Self-employed people are individuals who earn income through their own business or independent, non-salaried work, rather than receiving a fixed wage from an employer.
Examples of self-employed borrowers:
- Business owners
- Freelancers and independent contractors
- Company directors and shareholders
- Tradespeople (such as electricians, plumbers and builders working independently)
- Self-funded retirees (earning income through investments rather than employment).
Lenders assess self-employed borrowers differently than PAYG applicants. While requirements vary, most will look for:
- ABN and GST registration: An ABN active for at least 6-24 months. GST registration may be required if your business earns over $75,000 a year.
- Proof of income stability: Most lenders prefer at least two years of tax returns, but some accept alternative verification of income.
- A good credit score: A score of 650-plus is recommended for better approval chances.
- Consistent cashflow and business performance: Lenders check business financials, bank statements, and profitability.
Lenders require specific documents to assess your income and financial stability.
Required Documents When Applying For A Self-Employed Loan
- Personal tax returns from the two most recent financial years
- Most recent ATO Notice of Assessment or an accountant’s letter that confirms tax returns are final and lodged with the ATO
- Business tax returns from the two most recent financial years
- Business financial statements that an accountant prepares. These include the last two consecutive years of Profit-and-Loss statements, balance sheets and depreciation schedules from the most recent financial year.
- Proof the business has traded profitably in the two most recent financial years
- An ABN active for a minimum of 6 to 24 months
- A Business Activity Statement if your business earns more than $75,000 a year
- Trust deed and distribution statements, if applying through a trust structure.
Missing or incomplete paperwork can slow down the approval process, so ensuring your documents are in order is crucial