Using Business Bank Statements to Get a Home Loan in Australia
Using Business Bank Statements to Get a Home Loan in Australia
For many self-employed Australians, tax returns don't tell the full story of their financial position. If you minimise your taxable income through legitimate strategies, your tax returns may show a much lower income than you actually earn and deposit into your accounts.
Bank statement loans — also called bank statement alt doc loans — offer a solution. Instead of relying on tax returns, these loans use your business bank statements to verify your income.
How Bank Statement Loans Work
A bank statement loan uses your actual business deposits as evidence of income. The lender reviews your business bank statements — typically for the past 6 to 12 months — and calculates an average monthly income based on your deposits.
This approach is particularly useful for:
- Business owners who use tax minimisation strategies
- Sole traders with variable income
- Company directors whose taxable income doesn't reflect their true earnings
- Borrowers who are recently self-employed and don't have two years of tax returns
What Lenders Look For in Bank Statements
When reviewing your business bank statements, lenders typically assess:
Consistency of deposits. Lenders want to see regular, consistent deposits over the review period. Large one-off payments or highly erratic income can raise questions.
Net deposits vs. gross deposits. Some lenders use gross deposits (total money coming in), while others use net deposits (deposits minus business expenses). The method used significantly affects your assessed income.
Business expenses. If your bank account shows high outgoing payments relative to income, lenders may apply an expense ratio to determine your net income.
Account conduct. Lenders look for accounts that are well-managed — no dishonoured payments, no overdrafts, and no unexplained large transactions.
How Much Can You Borrow?
Your borrowing capacity using bank statements depends on:
- The lender's income calculation method — gross vs. net deposits, and what expense ratio they apply
- The review period — 6 months vs. 12 months of statements
- The consistency of your income — more consistent income leads to a higher assessed figure
- Your deposit size — most bank statement loans require a minimum 20% deposit
As a general guide, lenders using bank statements will often assess your income at 50-80% of your average monthly gross deposits, annualised. A specialist broker can help you identify which lender's calculation method will give you the best outcome.
Pros and Cons of Bank Statement Loans
| Pros | Cons |
|---|---|
| No tax returns required | Usually higher interest rates than full doc |
| Reflects actual cash flow | Typically requires 20%+ deposit |
| Faster approval in some cases | Fewer lenders offer this product |
| Suitable for tax minimisers | Lender calculations vary significantly |
What Documents Do You Need?
For a bank statement loan, you'll typically need:
- Business bank statements — 6 to 12 months, depending on the lender
- ABN registration — usually at least 12 months
- GST registration — some lenders require this
- Identification documents — passport or driver's licence
- Signed income declaration — confirming your income is as stated
Some lenders may also ask for BAS statements to cross-reference your declared turnover.
Which Lenders Offer Bank Statement Loans?
Bank statement loans are primarily offered by non-bank lenders and specialist lenders. The major banks (CBA, ANZ, Westpac, NAB) generally do not offer this product.
Non-bank lenders that offer bank statement loans include Pepper Money, Liberty Financial, La Trobe Financial, Bluestone, and others. Each lender has different policies, rates, and income calculation methods.
This is where working with a specialist broker becomes essential. We know which lenders offer bank statement loans, how each one calculates income, and which will give you the best outcome for your specific situation.
Is a Bank Statement Loan Right for You?
A bank statement loan may be the right choice if:
- Your tax returns show a lower income than your actual deposits
- You've been self-employed for at least 12 months
- Your business bank account shows consistent, healthy deposits
- You have at least a 20% deposit
- You're comfortable with a slightly higher interest rate in exchange for flexibility
If your tax returns do reflect your true income, a full doc loan will give you access to better rates. Speak to a broker to compare your options.
Get a Free Assessment
At New Vision Financial Services, we specialise in bank statement and alt doc loans for self-employed Australians. We'll review your bank statements, identify the most suitable lenders, and give you a clear picture of your borrowing capacity — at no cost and with no obligation.
Call 1300 422 506 or book a free consultation online.