Company

A company‑based self‑employed applicant is assessed more heavily than a sole trader or partnership because lenders must understand both the company’s financial strength and your personal income flow. The structure creates separation between you and the business, which changes how lenders verify income, risk, and liability.

How lenders view company applicants

A company is a separate legal entity, so lenders analyse:

• The company’s profitability and cash flow

• How you extract income (salary, dividends, director fees)

• Whether the company has business debts that you guarantee

• Whether the company’s performance is stable and sustainable

• Your role (director, shareholder, employee) and level of control

Even though the company is separate, lenders still assess you personally because you are the one taking the home loan.

What lenders assess in depth

1. Your personal income from the company

Lenders look at:

• Director’s salary

• Dividends

• Franking credits

• Director fees

• Trust distributions (if the company is part of a group structure)

They combine these to calculate your total assessable income.

They also add back:

• Depreciation

• One‑off expenses

• Extra super contributions

• Non‑recurring costs

These add‑backs can significantly increase borrowing power.

2. Company financial performance

Because the company is the income engine, lenders examine:

• Two years of company tax returns

• Profit & loss statements

• Balance sheets

• BAS statements (if required)

• Turnover trends

• Profit margins

• Cash reserves

• Business liabilities (loans, leases, overdrafts)

A company with strong cash flow and stable profits is viewed favourably.

3. Director liability and guarantees

Even though the company has limited liability, lenders often require:

• Personal guarantees from directors

• Evidence of your responsibility for company debts

• Confirmation that the company is solvent

If the company has large debts or relies heavily on credit facilities, this can reduce your borrowing power.

4. Company structure and ownership

Lenders want clarity on:

• Who owns the company (shareholders)

• Who controls the company (directors)

• Whether ownership has changed recently

• Whether the company is part of a group (e.g., trust + corporate trustee)

If you own less than 100% of the company, lenders only use your proportionate share of income.

5. Your personal financial position

Even with a company structure, lenders still assess you individually:

• Credit score

• Personal debts

• Living expenses

• Savings and deposit

• Personal bank conduct

• ATO debts (personal or company‑related)

Strong personal credit conduct is essential.

Documents required for company applicants

Most lenders require:

• Two years of company tax returns

• Two years of personal tax returns

• Two years of ATO Notices of Assessment

• Profit & loss statements

• Balance sheets

• BAS statements (if needed)

• Company constitution (sometimes)

• Director ID (mandatory for all directors)

• Loan statements for company debts

• Accountant’s letter (often required)

How a company structure affects borrowing power

Borrowing power may be lower if:

• Company profits fluctuate significantly

• You take minimal salary for tax minimisation

• The company has large debts or leases

• You own only part of the company

• The company is new or has unstable cash flow

Borrowing power may be higher if:

• You have strong, consistent director income

• Add‑backs boost assessable income

• The company has low debt and strong reserves

• You have a long trading history

• You maintain clean personal and business credit conduct

Practical tips to strengthen your application

• Keep company and personal finances separate

• Avoid aggressive tax minimisation the year before applying

• Maintain clean, up‑to‑date financial statements

• Build a strong savings history

• Ensure the company has no overdue ATO obligations

• Prepare a business performance summary to explain fluctuations