Turnover is not your personal borrowing income
A lender needs to understand sustainable income, not just sales passing through a business account. Business expenses, tax obligations, debts and ownership shares can all affect what is available to you. A sole trader, company director and trust beneficiary may need different records. Ask for a lender-specific checklist before collecting documents.
Organise your financial and tax records
Depending on the lender and your structure, requested records may include:
- Personal and relevant business tax returns, with notices of assessment where required.
- Profit-and-loss statements and balance sheets for the requested periods.
- Business activity statements and recent business bank statements.
- ABN details, business ownership information and company or trust documents.
- Evidence explaining salary, dividends, drawings or distributions received.
There is no single documentation period that applies to every lender. Do not assume one year's records, two years' records or a particular trading history will be accepted without checking the current policy.
Explain changes in trading
If income has increased, fallen or become seasonal, prepare a clear explanation supported by records. Current accounts or contracts may help explain the position, but a lender may not count projected income the same way as established earnings. Your accountant can help reconcile the records; neither an accountant's letter nor strong turnover guarantees approval.
List business and personal commitments
Include vehicle finance, equipment loans, overdrafts, credit cards, tax payment arrangements and any guarantees. Explain which entity owes each debt and how it is repaid. Also prepare your household expenses, existing mortgage or rent, deposit evidence and identification. Separate business and personal transactions where possible so the application is easier to assess.
Understand alternative-documentation options
Some lenders offer alternative ways to verify income. These are not no-document loans: supporting evidence and a serviceability assessment still apply. Rates, fees, deposit requirements and accepted evidence may differ from standard products. Compare the full cost and suitability rather than choosing an option only because its paperwork appears easier.
Prepare before making multiple applications
Discuss your business structure and records with a broker before submitting applications. Ask which lenders' criteria fit your circumstances and what evidence is missing. Send sensitive financial records through the agreed secure channel, not a public website form or social-media message.
Also read how banks assess home loan applications.
Further reading
ASIC Moneysmart: using a mortgage broker.
General information only, not personal financial, tax or legal advice. Documentation and income-assessment policies vary. Credit is subject to assessment and approval.