A good number of Australians are running their own businesses, freelancing or working as sole traders. Self-employment is a flexible way to earn a living, but it can make financial admin a little more involved.
When it comes to personal loans, self-employed applicants follow the same path as everyone else. The only difference is that lenders need a clearer picture of income and long-term stability before they can assess the application.
This guide walks through the documents lenders look for, how income is assessed and the simple steps that can lift your chances of getting approved.
Why self-employment changes how lenders assess applications
Self-employment often means income that moves around from month to month. A salaried worker has predictable pay cycles, so a lender can judge repayment capacity from a payslip. For self-employed personal loan applications, lenders take a broader view of the business and the revenue it generates. Before you get discouraged, they look for patterns, not perfection.
An application is easier to assess when the business has been operating for a reasonable period of time and shows consistent turnover. Lenders consider credit history, existing financial commitments and the customer’s overall ability to repay the loan without hardship. This is standard practice across the industry and is part of responsible lending obligations.
If income fluctuates, solid documentation becomes even more important. It gives lenders a reliable view of the business and helps demonstrate that the applicant sits within a prime credit profile.
How to get personal loan for self-employed: what lenders need
Applying for a personal loan when you run your own business is straightforward, but the standard checklist looks a little different. Lenders generally assess both personal and business information so they can build an accurate picture of financial stability. Requirements vary across lenders, though most will request a mix of the following documents:
Income documentation
Lenders usually ask for the past two years of tax returns and the related ATO Notices of Assessment. These documents carry weight because they are verified figures and cover an entire financial year. Some lenders may also ask for business bank statements that show regular inflows and outflows. If you keep profit and loss statements or balance sheets, these may help support the application. Applicants will also need their ABN details, including how long it has been active.
Personal financial information
Lenders look at the applicant’s personal finances as well as business income. This includes recent personal bank statements, information about any existing loans or credit cards and an outline of everyday living expenses. Credit files are also reviewed as part of the assessment. Credit reporting bodies such as Equifax provide further detail on how credit scores are built and why they matter.
Business indicators that support an application
Strong documentation pairs well with evidence that the business is stable. Lenders may consider how long the business has been operating, the level of recurring work and whether revenue shows a steady trend. Clear financial separation between business and personal accounts helps with this. It makes every data point easier to validate.
What counts as stable income when you’re self-employed?
Income stability doesn’t mean earning the same amount every single month. Lenders look for signs that revenue is consistent across a longer period. This could be a reliable client base, ongoing contracts or a pattern in invoicing that repeats across the year. When income varies, lenders usually average the earnings over 12 or 24 months to get a more accurate figure.
This approach makes sense for businesses with seasonal peaks or project-based work. Good record keeping becomes an advantage here. If invoices, statements and returns all tell the same story, it’s easier for lenders to judge the application on its merits.
How to get a personal loan when you’re self-employed (step-by-step)
Getting a personal loan follows a simple path, but the preparation stage is what carries the most weight. Once your documents are organised, the rest of the process looks similar to any standard personal loan application.
Step 1. Work out what you want the loan to cover
Start by defining the purpose of the loan and the amount you want to borrow. For instance, a 10,000 AUD loan may be used for a used car purchase, balance transfer or combining several existing debts into one structured repayment. Having a clear purpose helps you compare lenders and choose the structure that suits how you plan to use the funds.
Step 2. Check your current financial position
Review your income, expenses and any outstanding credit commitments. Take a look at your credit report as well so you know what information a lender will see during assessment. Australians are entitled to a free copy of their credit report, which outlines your credit history, repayment behaviour and any past enquiries. This gives you a clear view of how your profile sits before you apply.
Step 3. Gather your documentation
Self-employed applicants provide more than a payslip because lenders need verified information that reflects real business activity. Collect your most recent tax returns, ATO Notices of Assessment, business bank statements and ABN details. Add personal bank statements and a list of your current liabilities. These documents serve as an accurate record of your income and lodgements across each financial year, which is why lenders rely on them when they assess stability.
Step 4. Compare lenders and loan products
Evaluate interest rates, comparison rates and loan fees. Comparison rates help you understand the full cost of a loan because they include interest and most standard fees. They give borrowers a more realistic picture of what a loan costs over time, which is why they are widely used across the industry. When comparing lenders, look for clear product information, straightforward pricing and a service model that supports self-employed applicants who may need a little more interaction during the assessment stage.
Step 5. Submit your application
Once you have your documents ready, complete the application through the lender’s preferred channel. The lender will verify your records, review your income, look at your credit file and confirm your borrowing capacity. Each lender follows its own assessment process, although the fundamentals tend to be similar across the Australian market.
Step 6. Wait for the outcome
After reviewing your application, the lender will issue a decision. If the loan is approved, you’ll receive a contract that outlines the loan amount, interest rate and repayment schedule. Read the contract carefully before accepting. Once signed, the loan progresses to settlement and the funds are released according to the lender’s process.
How do I improve my chances of approval?
Boosting your approval odds is achievable with a few practical habits. These steps help present a clear, credible financial profile.
- Separate business and personal finances: Running everything through a single account makes your income harder to interpret. Separate accounts help lenders see how your business performs and how you manage your personal spending.
- Strengthen your credit profile over time: Paying bills on time, lowering credit card balances and avoiding unnecessary credit applications support long-term credit health. A strong credit score signals reliability to lenders.
- Reduce existing debts where possible: Lowering personal debts can improve your debt-to-income ratio. Even modest reductions demonstrate disciplined money management.
- Organise paperwork ahead of time: Keeping well-structured financial records makes the application smoother. Updated returns, statements and business documents show that your income is stable and traceable.
- Choose a loan type that suits your situation: Personal loans for theself-employed can be secured or unsecured. Secured loans may offer sharper pricing when backed by an asset. Unsecured loans keep things simple if you prefer not to offer security. The best option depends on your financial goals and what you value most. It’s also wise to steer clear of payday lenders because these products typically come with very high costs and short repayment terms, which can lead to significant financial pressure rather than meaningful support.
Ready to take the next step?
Self-employed Australians can approach personal loans with confidence when they follow a clear process. Strong documentation and reliable financial habits contribute to a smoother experience.
Now Finance offers personal loans with no fees, which means the comparison rate matches the interest rate. This gives self-employed borrowers a cleaner way to compare the real cost of a loan. The service model is also more personal than a major bank, making it easier to get support when you need it. With strong customer ratings across Trustpilot and Product Review, applicants get a sense of consistent service and clear communication.
Check your rate today and see what fits your circumstances without pressure. Please feel free to reach out to us for more information.
