Personal loans for self-employed borrowers

What is a self-employed personal loan?

A self-employed personal loan is a personal loan for people who are sole-traders or run their own business. While the application process is a bit different for self-employed personal loans, there are still plenty of options available to people who are self-employed. Typical options available to self-employed people include the following:

• Specialist loans. The first way is through a specialist lender who provides personal loans for self-employed people. These may include lenders that offer self-employed loans for tradies or personal loans for ABN holders.
• Standard personal loans (secured or unsecured). You can apply for any standard personal loan if you can meet the documentation requirements as an employed person.
• P2P loans. You can also submit an application to a P2P lender if you meet the eligibility and employment criteria.
• Low doc loans. If you cannot meet the doc requirements, you can apply for a low doc loan, which requires fewer documents, although this type of loan is usually more expensive than a traditional loan.

To be eligible, you'll usually need an active Australian Business Number (ABN), and most lenders want to see that you've been self-employed for at least 12 months. Some ask for up to 2 years of trading history. You'll also generally need to be at least 18, an Australian citizen or permanent resident, and able to show your business income can cover the repayments.

Can I get a personal loan self-employed?

If you have a long-established business with a steady cashflow, or you have been a sole trader or independent contractor for years, your chances of approval are better than if you are newly in business.

Borrowers who have just set up a business will struggle to prove they can repay the loan, because they don't have a financial track record of success to show the lender.

To increase your chances of getting a personal loan, make sure you file your taxes promptly after July 1 each year, so you have a clear paper trail to demonstrate your income. As a guide, this is the information you may be asked to share:

Do I need to apply for a low doc loan if I'm self-employed?

Low doc loans are for self-employed people who may not be approved for a standard personal loan, because you can't prove your income.

They require less documentation than traditional personal loans, which means an easier application process.

That said, low doc loans have higher rates and fees than standard loans, especially if you're dealing with a specialist lender. So, you're usually better off trying to get a standard personal loan before applying for a low doc loan. If you have a stable income and at least 2 years worth of records, you can apply for a standard loan.

If you haven't been in business for at least 2 years, check to see if the lender will accept other forms of earnings, including revenue from rent or sub-letting your office premises; shares and other investments; or proof of savings.

"In most cases, the lender will want to see at least 2 years worth of tax returns, so they can feel reassured that your business is viable longer term and it will continue to provide you with a steady income. If you don't have at least 2 years worth of tax returns as a self-employed borrower, you'll probably have to look into a low-doc personal loan. With the loan, the lender takes on a higher risk because you're not providing as much proof, and you pay a higher interest rate in exchange."

Sarah Megginson

Money expert + media spokesperson

What documentation do I need as a self-employed borrower?

• Tax returns. Be prepared to show the last two years of your full personal and/or company tax returns. These will help prove any income you declare on your application.
• Financial statements. These may include any profit/loss statements to also support the income you declare.
• Proof of rental income. If you have any income from rental properties, you can declare this with real estate statements or copies of your executed lease agreements.
• Notice of Assessment. Make sure you have on hand your latest Notice of Assessment (NOA) given to you by the Australian Taxation Office (ATO). This shows tax information such as the amount of income tax you owe(d). Depending on the lender, you may need to provide your NOAs from the last two years.
• Recent bank statements. This includes statements showing your savings and business transactions. It may also include statements showing any other outstanding loans or credit cards you have with other lenders.
• Company-specific information. If you own your own business, be prepared to provide information such as your company’s ABN, address, etc.
• Personal identification. Depending on the lender, this may be your Australian driver’s licence, passport or proof of age card. You’ll either need to copy your ID and fax it over to the lender or scan it and attach the digital file to your application.

Are self-employed loans more expensive than standard personal loans?

Self-employed loans usually have higher interest rates than traditional personal loans, because the risk the lender is taking on is higher. To compensate for this increased risk, they charge you a higher rate.

This means that you should try to qualify for a standard personal loan before you look for a low doc loan.
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Keep in mind that many banks and alternative lenders may offer loans that aren’t more expensive than standard loans to self-employed individuals. Make sure you’re comparing all options and that you’re aware of exactly what’s out there before deciding to apply with any particular lender.

How can I compare my personal loan options?

Keep in mind the following factors when comparing the loans offered by different lenders:

Why compare personal loans with Finder?

Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)

Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest.

Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, renovating your home or heck just ready to let loose with the spending - we got you.

Frequently asked questions about self employed loans

• How much can I apply for?

  This depends on several factors such as your particular lender, your requested loan amount and how well you meet eligibility requirements. You can always find out the minimum and maximum loan amounts offered by a lender by clicking through to the particular lender's review page using the table on this page.

• Can you get a personal loan with an ABN?

  Yes, it's possible to apply for a personal loan with an ABN. You need to provide 2 years' worth of tax records and documents to prove your income related to that ABN.

• What are some extra tips to help me qualify as a self-employed applicant?

  First, always check that you meet all eligibility and documentation requirements before applying for a loan. Secondly, consider having a guarantor sign off on your loan, which would help reduce the risk on the part of the lender. Alternatively, you can file a joint application with another person, where you and the second party would be equally responsible for the requested loan.

• Can I take out a self-employed personal loan without proof of income?

  You'll find it harder to get a personal loan if you don't have any evidence of income, whether you're running a small business or working as an independent contractor. It's possible to gain this kind of personal loan as a low-doc loan. You may be able to use business assets as an alternative to proof of income.

Written by

Elizabeth Barry

Journalist

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Elizabeth Barry is an experienced journalist with over 10 years of expertise in personal finance, contributing to outlets like the ABC, Sydney Morning Herald, and 7News. She holds a Master of Arts in Creative Writing and a Bachelor of Arts in Communication from the University of Technology Sydney, and has earned multiple award nominations, including a Highly Commended recognition at the 2017 Lizzies. Elizabeth began her career at Finder in 2013, progressing through roles to become Lead Editor, where she oversaw a wide range of personal finance coverage until 2024. See full bio

Elizabeth's expertise

Elizabeth has written 147 Finder guides across topics including:

• Banking
• Personal finance
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Co-written by

Sarah Megginson

Money expert + media spokesperson

Sarah is the author of How to Raise Rich Kids. With over 20 years of experience in property, finance and investment journalism, she is a trusted expert whose insights regularly appear across television, radio and print media, including Sunrise, Channel 7 News, Bloomberg and Yahoo! Finance. She has previously served as managing editor for Your Investment Property and Australian Broker. Her expert advice has been shared in the media over 4,000 times. Sarah holds a Bachelor’s degree in Communications and a Tier 1 Generic Knowledge certification, which complies with ASIC standards. See full bio

Sarah's expertise

Sarah has written 231 Finder guides across topics including:

• Home loans
• Personal finance
• Budgeting and money-saving tips
• Managing the cost of living