The Challenge

David had run his own building and renovation company for several years, and the business was doing well. After a long period of reinvesting profits back into the business, he and his family were finally ready to buy a larger home to live in.

The problem was not his income, it was how that income looked on paper. Like many self-employed borrowers, David claimed legitimate business expenses and depreciation to manage his tax position, which reduced his taxable income. On top of that, his earnings varied from one financial year to the next.

When David first approached his existing bank, the application was declined. The bank assessed him on his lower taxable income and did not account for the one-off expenses and add-backs that reflected his real earning capacity. He was left wondering whether home ownership at this level was even possible while self-employed.

Finding the Right Solution

After reviewing David’s situation, our broker took the time to understand both his business and his personal finances. It was clear that his actual cash flow was much stronger than his tax returns suggested at first glance.

We identified lenders that take a more flexible view of self-employed income. Rather than relying only on the lowest taxable figure, these lenders allow income add-backs such as depreciation, additional superannuation contributions, one-off expenses and interest on business debt that is being repaid. We also focused on his most recent financial year, which showed his strongest result.

By presenting a complete and accurate picture of David’s earnings, supported by his financial statements and an accountant’s declaration, we were able to demonstrate genuine servicing capacity to the right lender.

The Application Process

We worked closely with David and his accountant to gather two years of business financials, recent Business Activity Statements and personal tax returns, then structured the application to highlight his true position.

Because self-employed applications often raise extra questions, we prepared clear explanations for the income add-backs and the variation between financial years before the lender even asked. This helped the assessment move forward smoothly, without unnecessary delays.

With the documentation in order and the income clearly evidenced, the lender issued formal approval at a competitive rate normally reserved for salaried borrowers.