The real-life guide to Home Loans for the Self-Employed

Self-employed gym owner

 Estimated read time: 6 Minutes

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Alt Doc Loans | Tips to Qualify | Budgeting Tips


Running your own small business comes with a level of freedom and flexibility, but this can leave little time for figuring out how to get a home loan.

Lenders will scrutinise not only your personal circumstances, but also those of your business – which can be daunting. That’s why we’ve put together real-life guide to self-employed home loans, to help take the stress out of the mortgage process.

Who we could help

Refused a loan by the banks due to being self-employed
Those refused a loan by the banks due to being self-employed 
Alternative income documentation
Small business owners with alternative income documentation
Managing cashflow
Those looking to manage their cashflow we offer weekly, fortnightly or monthly repayments

There are two main loan options for the self-employed:  Full Doc and Alt Doc options. The Full Doc option requires standard documentation, usually including tax returns, financial statements, and other proof of income. An Alt Doc loan could be more beneficial for self-employed individuals who have a good credit history, but have alternative documentation to support their income.

Pepper Money’s Alt Doc option considers applications using documentation that’s more relevant to a small business owner’s circumstance. Typically, the longer you can prove regular income history for self-employment, the higher your chances of being approved for a mortgage. You could be eligible for an Alt Doc option with as little as 6 months ABN and GST registration.

You’ll need to provide evidence of:

  • ABN registration for six months
  • GST registration for six months
  • A declaration of financial position plus one of the following: 6 months business bank statements (inclusive of the last one month) or six months business activity statements (BAS).


How are Alt Doc loans different to Low Doc loans?

Low Doc loans used to be a popular way to apply for a mortgage with minimal documentation, however responsible lending obligations include a requirement for lenders to assess whether a loan is suitable for a borrower. Low doc loans don't meet these responsible lending obligations.

Pepper Money's Alt Doc option meets responsible lending obligations and considers alternative documentation options compared to traditional home loans.


The power of the Alt Doc loan

The Alt Doc option could give you the power to help to buy your own home or invest in property. Refinancing a home loan to Pepper Money could also allow you to consolidate business debt, improve your cash flow by paying outstanding tax debts, or even obtain cash for business purposes. All loan applications are subject to Pepper Money’s credit assessment, eligibility criteria and lending limits.

Are banks making it hard to prove your income when you've successfully started your own business? Pepper Money's alt doc option is here to help. This option offers the flexibility to provide other documentation to prove your income and ability to repay your mortgage.  

It's a great way for self-employed borrowers to purchase property after just six months of owning their own business. We've got a few hints and tips to take the stress out of applying for a home loan so you can focus on running your business.  

The first thing you'll need to do is prove you can comfortably make your mortgage repayments. Without pay slips from a 9 to 5 employer, this is where it can be tricky. 

However, Pepper Money's alt doc option makes this easier. Pepper Money's alt doc option allows you to do this by showing 6 months of ABN and GST registration along with relevant financial statements.  

The next thing to consider is optimizing your cash flow. This could make your application more attractive to lenders. You can do this through reviewing your business's payment terms and inventory so you're not paying for what you don't need, like keeping more stock on hand than required.  

The final thing you can do is look at your credit history and current credit exposure.  Paying off outstanding debts and reducing your limit on any credit cards can help increase your borrowing power.  

There's a bit of groundwork to do to get your application ready but once you do, getting a home loan when you're self-employed doesn't have to be difficult. If you need any more hints and tips for your home loan journey, then visit We're here to help.  


The basics of home loans for the self-employed

Being your own boss shouldn't stop you from securing a home loan. However, being self-employed can lead to some challenges when it comes to financing a home. Here are some tips to help you qualify for a self-employed home loan.


Tip 1: Count on the numbers

One of the things lenders look for when assessing a home loan application is if you’ll be able to make regular mortgage repayments. When applying for a Pepper Money Alt Doc option, you’ll need to provide paperwork that demonstrates that you’ve been consistently self-employed for at least six months. You’ll also need to provide proof (invoices or other activity statements or bank statements) that you earn a regular amount each month, as well as ABN and GST registration.

It’s important for self-employed borrowers to prove a consistent level of income to the lenders when applying for a home loan.


Tip 2: Go with the cash flow

Pay off outstanding debts, including personal credit cards and loans

Pay off outstanding debts, including personal credit cards and loans

If you’re self-employed and looking to buy a home, it’s a good idea to ensure your regular payments are made on-time. This could help to improve your credit score and assist with reducing the amount of interest you are paying on existing debts. A high credit score could help you qualify for better interest rates. 
Control your inventory

Control your inventory

Tying up too much of your money in unsold inventory can cause cash flow problems. Reviewing your warehousing and inventory management may uncover ways to maximise cashflow by only ordering stocks when needed.
 Use a financial plan and forecast

Use a financial plan and forecast

You can’t always see what’s coming around the corner for your business. But a little forward thinking can keep you from being on the back foot when you apply for your loan. Track your cash flow on a monthly basis and compare where you are each month. This can help you forecast and see emerging patterns, such as seasonal demand. This can help you make better business decisions and predict cash flow problems before they happen. Also make sure you set aside money for GST and tax!


Five self-employed home loan budgeting tips

Set a goal for your home deposit

1. Set a goal for your home deposit

It might seem a long way off, but it’s tough to get anywhere if you don’t know where you’re going. Think about how much you need to save up for a deposit, and don’t forget to factor in extra costs like stamp duty and legal fees. Although it’s possible to secure a loan with a five per cent deposit,  a 20 per cent deposit will avoid having to pay Lenders Mortgage Insurance (LMI) or a similar Mortgage Risk Fee.
Keep good records

2. Keep good records

Your future self will thank you if you get in the habit of keeping good records. While adding another responsibility to your lengthy list might not seem appealing right now, not having the right documentation could make it harder for you to get a loan in the future. Using accounting software to manage your business finance can help take a lot of admin off your plate. And, by tracking your invoices, customer contacts and bank reconciliation, it could also help smooth out your cash flow.
Put it away

3. Put it away

It sounds basic, but some good old-fashioned saving is an important piece of any bona fide budgeting strategy. One way to get started is by using the 50-30-20 rule, which has you putting your post-tax income into three buckets: needs, wants and savings. Also try to build up a solid rainy day fund so you have something outside of a credit card to call upon in case of emergency.
When sales are good, savings are good

4. When sales are good, savings are good

While you should celebrate the wins and treat yourself when business is booming, it could also be a good time to set aside a bit more savings in your more prosperous months. A good savings fund with a higher interest rate will help you earn more when you deposit more.
Look into income protection insurance

5. Look into income protection insurance

Hopefully you’ll never have to call upon your income protection insurance. But it could be a good idea to be prepared for a situation where you are unable to work due to injury or illness. With income protection insurance, you won’t have to dip into your home savings for daily expenses. Just remember to do thorough research before purchasing any insurance product ASIC's Money Smart website offers useful tips and information around income protection insurance.


Self-employed and having a hard time getting a
home loan?

Running your own small business comes with a level of freedom and flexibility, but this can leave little time for figuring out how to get a home loan. Our short video aims to answer some of the questions you may have around getting a home loan as a self-employed borrower.


We're here to help

When talking to a Pepper Money lending specialist, be up front about the ups and downs of your business. The little details matter. While consistent income is a factor when assessing an application, we've been helping small business owners with self-employed home loan options across Australia and New Zealand for more than 22 years. We’re dedicated to helping self-employed Aussies become homeowners and we understand the challenges facing small business, and how cash flow has a knock-on effect. As one of Australia’s largest, most-trusted non-bank lenders, we’re in the business of finding home loan solutions that fit your circumstances.

Taxable income can also be confusing for the self-employed. It could be a good idea to talk to a financial adviser or tax professional about how your taxable income could impact how much you can borrow for your loan. They might also be able to help you learn more about available tax deductions and explain how to best set aside money for tax throughout the financial year. Check out our self-employed home loan options and how we can help.


Apply for a Pepper Money Home Loan

Want to find out where you stand?

We've got the online tools and calculators to help get your home loan journey underway. Work out how much you may be able to borrow and even quickly find out what indicative interest rate you might be eligible for.

Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

All applications for credit are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. 

The results of the borrowing power calculator are based on information you have provided and is to be used as a guide only. The output of the calculator is subject to the assumptions provided in the calculator (see 'about this calculator') and are subject to change. It does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it. The interest rates do not reflect true interest rates and the formula used for the purpose of calculating estimated borrowing power is based on the assumption that interest rates remain constant for the chosen loan term. Your borrowing power amount will be different if a full application is submitted and we complete responsible lending assessment. The results in the calculator do not take into account loan setup or establishment fees nor government, statutory or lenders fees, which may be applicable from time to time. Calculator by Widgetworks.

Pepper Money Personal Loans is a brand of Pepper Money Limited. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213 030. Personal information for Pepper Money Personal Loans is collected, used and disclosed in accordance with Pepper’s Privacy Policy & the credit provider’s Privacy Policy.

Pepper Money Limited ABN 55 094 317 665; AFSL and Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.

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