If youโre self-employed, youโve probably faced the hassle of jumping through hoops to prove your income when applying for a loan. Traditionally, banks have relied on tax returns to verify your earnings, but letโs be real โ tax returns donโt always reflect the true health of your business, especially with the ups and downs that come with being your own boss. The good news? There are alternate ways to verify your income without handing over your tax returns.
More lenders are offering flexible options for self-employed borrowers, allowing you to use alternative forms of income verification. Instead of diving into old tax records, you can often provide a signed income declaration, a letter from your accountant, or recent BAS (Business Activity Statements). Some lenders also accept business bank account statements to assess your cash flow and financial stability. This approach gives a more accurate snapshot of how your business is performing right now, without relying on documents that might not show the full picture.
What does this mean for you? Essentially, the banks donโt get to dictate what you can buy โ or where you can buy it โ based on old paperwork. Whether youโre looking to refinance, purchase a new property, or even invest, these alternative verification methods can open doors that might otherwise have been closed.
Using these methods doesnโt just simplify the process; it can also fast-track it. With fewer documents to chase down, you can focus on running your business instead of worrying about your tax return. Plus, it makes sense for those whose income fluctuates, or for those who manage their tax affairs in ways that minimise their taxable income. Just because your tax returns donโt show high numbers doesnโt mean your business isnโt thriving.
So, if youโre self-employed and need to borrow, donโt be discouraged by the thought of tax returns. Talk to us about alternative verification options โ you might be pleasantly surprised at how easy the process can be!
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