How to Refinance When You're Self-Employed

If you run your own business, you already know banks treat you differently. You could be earning twice as much as a salaried worker, but to an automated bank system, fluctuating income looks like risk. Being self-employed shouldn't lock you out of refinancing or force you onto higher rates. You just need to know how to present your file.

Why Banks Struggle with Self-Employed Applicants

Banks love predictability. A PAYG employee provides two payslips and the bank ticks a box. A self-employed applicant provides two years of company tax returns, personal tax returns, notices of assessment, and profit and loss statements. The bank's credit assessors then have to interpret complex financials, add back depreciation, and average out income. It requires human underwriting, which banks try to avoid.

How to Get Approved for Top-Tier Rates

1. Have Your Tax Returns Up to Date

If you want a standard, low-rate Full Doc loan, you need your last two years of tax returns lodged with the ATO. Some lenders will accept just the most recent year, which is useful if your business had a strong growth year and you don't want it dragged down by the previous year's figures.

2. Understand Add-Backs

Your accountant's job is to minimise your taxable income to save you tax. Our job as brokers is to maximise your serviceable income to get you a loan. These two goals conflict. However, lenders allow certain expenses to be added back to your profit for servicing purposes, including depreciation, one-off capital expenses, and sometimes extra superannuation contributions. Knowing which lender accepts which add-backs is where experience pays off.

3. The Alt Doc Alternative

If your tax returns aren't ready, or they don't reflect your current income, we can look at Alt Doc loans. These lenders assess your income based on your Business Activity Statements (BAS), business bank statements, or a letter from your accountant. Rates are sometimes slightly higher, but the flexibility is worth it for business owners in growth phases.

4. Keep Personal and Business Finances Separate

Commingling funds is a red flag for credit assessors. Pay yourself a regular wage or drawings from your business account to your personal account, and keep personal living expenses completely separate from business expenses.

Don't let your bank tell you refinancing is too hard because you work for yourself. With the right broker presenting your application properly, you have access to the same sharp rates as everyone else.