Most lenders require the borrowers to be self employed for at least 2 to 3 years. However, some lenders may consider 1 year self employed. It is unlikely that the lenders will provide loans to the borrowers who have been self employed for less than 1 year. The reason being is that the borrowers have been self employed for less than 1 year would have more financial uncertainty.
If you have been self employed between 1 – 2 years, some lenders may approve your loan because you have been in the same industry for some time and you can provide 1 year financial statements for the business.
In the lenders’ opinion, self-employed borrowers have a higher risk due to their income is not stable. Different industries may also affect the lenders’ decision.
In order to ensure that the tax returns provided will be lodged with the ATO, the credit officers would require the tax returns to be signed, certified and backed up by a tax assessment notice. Once you ticked the above requirements, they will then look at the taxable incomes in the last 2 years and add back the expenses such as interest expenses and depreciation. Depending on the nature and the size of your business, more documents may be required.
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