Around 2.2 million Australians are self-employed as sole traders, small-business owners, or independent contractors, according to December 2025 data from the Australian Bureau of Statistics (ABS), representing a significant proportion of the workforce.
While the appeal of being your own boss is clear, the self-employed path comes with its challenges, especially when it comes time to applying for a loan.
One of the big ones is consistency of income – the item at the top of every lender’s checklist, but something that can be difficult for many self-employed Australians to demonstrate, particularly those whose earnings are seasonal or fluctuate throughout the year.
Self-employed borrowers also tend to be particularly vulnerable in high-interest-rate environments and during periods of elevated cost-of-living pressure.
As a result, while opportunities in this segment remain strong, structuring deals for self-employed clients increasingly requires specialist knowledge, careful lender selection, and a fair bit of upfront work to ensure applications meet credit policy.
Drew Ivory, Melbourne-based mortgage broker and founder of PBI Mortgages, says the biggest challenge is that business income rarely fits neatly into a lender’s template.
“A PAYG borrower has a salary and payslips. With a business owner you might be looking at company profits, distributions, drawings or retained earnings. It can take a bit more work to show a lender what the real income position looks like,” he says.
“The other issue we see a lot is documentation. Self-employed borrowers are often asked for two years of financials, tax returns, BAS statements and sometimes letters from accountants. If those documents aren’t ready to go, things can slow down quickly.
“What I often say to clients is that the loan isn’t usually the problem – it’s more how the information is presented.”
Coming to the party
Given the complexity often involved in assessing self-employed borrowers, it’s no surprise that non-banks and specialist lenders have traditionally dominated this segment.
Lenders, such as RedZed, Pepper Money, and Resimac, have led the way in recent years, earning strong feedback from brokers for their service, products, and approach.
Over the past 18 months, the majors have also shown a growing appetite.
In the middle of last year, Westpac Banking Corporation (Westpac) confirmed it had tweaked its offering for self-employed borrowers with the introduction of a one-year income assessment option to help speed up assessments and reduce paperwork.
This followed earlier moves from the Commonwealth Bank of Australia (CBA), which introduced a one-year financials policy in October 2024, and National Australia Bank (NAB) in March 2025.
Australia and New Zealand Banking Group Limited (ANZ) also rolled out several tweaks to its mortgage policy for self-employed borrowers, including enabling those who have received income through director fees or company dividends to provide one year of income documentation (rather than two) when applying for home loans.
More recently, non-major ING Australia announced a raft of changes including a new, shorter income verification option, bringing in the ability for self-employed borrowers to use 50 per cent of their company ownership income for assessment and accepting single-layer trust structures (like company to family trust) for serviceability.
For Ivory, understanding a business’s situation is the key to ensuring the solution will be effective, regardless of the lender the client chooses.
“With self-employed clients you can’t just plug figures into a calculator and move on. You need to understand how the business generates income, how it’s structured and what the client is trying to achieve over the next few years,” he says.
“Once you understand that, you can usually identify which lenders are going to look at the deal more favourably.”
Ivory also says preparation can make a significant difference when exploring options for clients who may only qualify for low-doc or alt-doc loan solutions.
“Preparation also makes a huge difference. When we submit a loan for a self-employed client, we make sure the lender has a clear explanation of the financials and the business. That saves a lot of back-and-forth during assessment,” he adds.
Working with financial professionals can also be critical in helping clients structure their finances and present a stronger application.
“Having a good relationship with the client’s accountant is incredibly helpful,” he says.
“They know the details behind the financials, and when brokers and accountants work together it tends to lead to much better outcomes for the borrower.”
Changing landscape
Brokers – many of whom are self-employed themselves – can play a key role in helping self-employed clients access finance, but staying ahead of the challenges facing this segment is becoming increasingly important.
Mark Guglielmino, director and principal broker at Capra Financial Group, says the goalposts have shifted for many businesses, making tailored guidance more important than ever in 2026.
“Lender policy for the self-employed business owner has changed significantly in the last 12–24 months and no longer are we limited to rigid documentation that tells half the story,” he says.
“However if you’re not working with a strategic-minded broker who can tailor advice to your situation, you will be missing out.
“It is also vital for your broker to be working alongside your accountant and understanding the full picture of your business to ensure lending strategy matches tax strategy.”
For this reason, engaging early in the process is important.
“Take the time to understand the client, their needs and their business to help present the full story behind the client’s income and business performance,” he adds.
“Use a broad lender panel to find policies that better suit self-employed income structures.”
Ultimately, a path exists – even if the process isn’t as straightforward as for a typical PAYG borrower. As Ivory notes, brokers play a key role in ensuring a self-employed borrower’s numbers tell a clear, compelling story.
“A lot of business owners are doing well, but when you look at the financials on paper it doesn’t always look straightforward. They might be reinvesting profits, drawing money in different ways, or running the business through a trust or company structure,” he says.
“None of that is unusual, but lenders want to understand exactly how the income flows and whether it’s sustainable.
“The borrowers who tend to have the easiest experience are the ones who keep their financials current and involve their broker early. If we can review the numbers with their accountant before a loan application goes in, we can usually avoid a lot of issues later.”
