Lending Solutions

In most cases, lenders will use the last 2 years tax returns and add back things like depreciation to assess your available income. Each lender has a different method to calculate your available income and what expenses they will add back. This is where Connected Loans can help you navigate your most suitable options.

Some lenders will take an average of the last two 2 years, whilst some will use the most recent year. Some will allow depreciation to be added back along with superannuation and one-off expenses, whilst others may only use a portion.

Lenders will use different types of documents to verify your self-employed income. Document requirements are typically put into two categories which are often referred to as Full Documentation and Alt Documentation.

For a Full Documentation Loan a lender may ask for:

• Last 2 years Tax Returns for borrowers and their associated business entities
• Last 2 years Notice of Assessments
• Last 2 years P&L, Balance Sheet and Statement of Owners Equity (if applicable)

For an Alt Documentation Loan a lender may ask for:

• Income Declaration. This is a statement that you will sign to verify that the amount you will declare as your income is true.
• Between six and 12 months Business Activity Statements (BAS). This should be from an ATO portal and will show your financial transactions.
• Letter from Accountant. This letter will serve as an income verification form that has to be signed by your accountant. It will validate the income that you declared.
• Between six and 12 months Bank Statements. These should come from your primary business bank account.

Although you are self-employed, if you can satisfy the Full Documentation requirements, you can still borrow almost all types of loan – in the same way as PAYG borrower can. The only difference will be in the requirements you will provide.

For an Alt Documentation Loan, you will need to apply for a specific type of loan. These types of loans have different interest rates, fee and lending criteria.