Self-employed home loans in Geelong

Why self-employed borrowers are assessed differently

A salaried employee can hand a lender two payslips and a group certificate, and the income question is largely settled. When you work for yourself the picture is more layered. Your income moves with the trading year, a good chunk of it may be reinvested back into the business, and the figure on your tax return is shaped by every legitimate deduction your accountant has claimed. Lenders therefore look past a single number and try to read the underlying earning capacity. Around Geelong that affects a broad spread of owners, from a Pakington Street cafe operator and a Torquay surf-retail trader to a sole-trader sparky working sites across Armstrong Creek. The job of the broker is to translate your accounts into the format the right lender wants to see.

It helps to know that the serviceability test itself is no softer for the self-employed. Lenders are required by APRA (the Australian Prudential Regulation Authority) to assess your repayments at roughly 3% above the actual rate, and the household expenditure baseline applies the same way it does for everyone. What changes is the evidence stage in front of that test. Get the income presentation right and a self-employed file competes on equal footing with a PAYG one.

Full-doc lending for established Geelong businesses

If your business is well established, full-doc lending is almost always the cheapest path, because it opens the entire mainstream lender panel rather than a narrower specialist one. Full-doc simply means you can fully document your income. For most self-employed applicants that is two years of personal tax returns and ATO notices of assessment, plus the matching business financials or company tax returns where you trade through a structure. Lenders typically take the lower of your last two years, or an average, which rewards steady trading and protects you from a one-off spike. For a Surf Coast hospitality owner whose figures have settled after the early growth years, full-doc usually delivers the sharpest rate and the most straightforward approval.

Alt-doc and low-doc options, and what they are not

When your most recent returns are not yet lodged, or your trading year is genuinely stronger than the lodged figures suggest, alt-doc and low-doc lending can bridge the gap. Instead of two years of tax returns, these loans accept alternative income evidence such as recent business activity statements (BAS), a signed letter from your accountant confirming your income, or six to twelve months of business bank statements that show the cash actually moving through the business. It is worth being clear about one thing: alt-doc is not a way to avoid proving income. You still have to evidence what you earn, just through a different document set, and you sign a declaration that the income figure is reasonable. Lenders price these loans a little higher and may want a lower loan to value ratio, so a broker weighs whether waiting a few weeks for full-doc would serve you better.

Add-backs that show your true income

Add-backs are where a good broker earns their place on a self-employed file. Your taxable income is deliberately lower than your real earning capacity, because your accountant has claimed every legitimate deduction. Lenders accept that, and allow certain items to be added back to your net profit to arrive at a fairer assessable income. Common add-backs include depreciation, which is a paper expense rather than cash leaving the business, genuine one-off costs that will not recur, additional voluntary superannuation contributions, and the interest on any debt you have since cleared. For a Geelong tradie who wrote off a new ute and a swag of tools last financial year, those add-backs can lift the assessable income materially without overstating a cent. The broker builds the add-back schedule from your accountant's figures so the lender sees the income you actually live on.

ABN, GST and how long lenders want you trading

Lenders pay close attention to how long you have been in business. Most mainstream full-doc lenders want to see an active ABN held for at least two years and, where your turnover requires it, a matching period of GST registration. Some lenders will look at one year of returns for an applicant in the same line of work they were employed in before going out on their own, and a few specialist lenders accept an ABN as young as six to twelve months on an alt-doc basis. Consistency matters as much as length: a continuous ABN and registration history reads far better than a stop-start one. If you are a Bellarine contractor who recently moved from being a wage employee to invoicing under your own ABN, a broker can tell you which lenders count your earlier experience and which will make you wait.

Sole trader, company and trust structures

How you are set up changes which documents a lender needs. A sole trader's business income flows straight onto a personal tax return, so the assessment is comparatively simple. Once you trade through a company or a family trust, the lender also wants the entity's tax returns and financials, and will look at how profit is distributed, retained or paid out as wages and dividends. Retained profits sitting in a company can sometimes be counted, which helps an Ocean Grove business owner who pays themselves a modest wage and leaves the rest in the business. These structures are common and entirely fine to lend against; they simply need the full set of entity paperwork and a broker who can read it the way a credit assessor will.

Using a strong recent year

Seasonal and cyclical trading is a fact of life in the Geelong and Surf Coast economy, where summer can carry a hospitality or tourism business through the quieter months. If your latest financial year is clearly stronger than the one before, some lenders will assess on that most recent year alone rather than averaging it down, provided the improvement is sustainable and explained. That can be the difference between qualifying now and waiting another twelve months. A broker identifies the lenders that allow single-year assessment, helps you document why the lift is genuine, and pairs it with the right loan structure so a good year is not diluted by a conservative averaging rule.

How the free self-employed loan review works

Submit the short form with your business structure, roughly how long you have held your ABN, and the area you are buying or refinancing in. An experienced broker from our network reviews your situation, works out whether full-doc or alt-doc gives you the better result, and compares the lender panel for the income policy that fits. The review is free and there is no obligation to proceed; if you go ahead, lenders pay the broker a commission on settlement, which is disclosed to you in writing in a Credit Quote. The broker holds the Australian Credit Licence or Credit Representative authorisation and provides all the credit advice, this website does not. You can expect a broker in our network to be in touch, usually within the same week, to book a no-obligation chat at a time that suits a busy trading schedule.

Information on this page is general only and does not take into account your individual situation, objectives or needs. Lending policies, add-back rules and trading-history requirements vary between lenders and change over time, so confirm the current settings before acting. Any indication of borrowing power is not an offer of credit and is subject to a lender's approval.