If you're self-employed, banks will usually need more from you before they'll lend compared to a PAYG employee. Understanding what banks are looking for means you can present your income in the best possible way and set yourself up for success.

In this episode, Jack Elliott and Chris Bates break down how banks assess self-employed income. We talk through the standard two year approach, why one year financials could significantly increase your borrowing capacity, what your options are if your ABN is less than two years old, and how the director wages pathway could change what you're able to borrow.

We also cover the tension between tax minimisation and borrowing capacity, why speaking to a broker before you lodge your tax return matters, and how connecting your broker and accountant early can help you find the right balance between both.

In this episode:

🔑 How banks assess self-employed income using two years of financials

🔑 Why one year financials could significantly increase your borrowing capacity

🔑 What your options are if your ABN is less than two years old

🔑 How the director wages pathway could change what you're able to borrow

🔑 Why speaking to a broker before you lodge your tax return is so important

Timestamps

Timestamps

00:00 - Budget Changes: What We're Seeing for First Home Buyers

01:36 - Introduction to Self Employed Income Assessment

04:09 - The Standard Two Year Approach

04:41 - Balancing Tax Minimisation and Net Profit

07:20 - One Year Financials Policy with Example

09:18 - Protecting Yourself as a Self Employed Buyer

12:07 - Director Wages Policy

14:57 - What If Your ABN Is Less Than Two Years Old?

17:36 - Business Debts and Addbacks

19:41 - Getting the Best Outcomes as a Self Employed Buyer

22:19 - The Tax Return Trap

24:25 - Getting the Right Team Around You

Free Resources

Download Your How Banks Assess Self Employed Income Resource

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