Finding it Hard to Get Loan Approval in Perth? A Broker for the Self-Employed Can Help.

For the thousands of entrepreneurs and sole traders in Perth, success is built on ambition, hard work, and smart preparation. The same principles apply when it comes to securing a home loan. While being self-employed offers incredible freedom, it also means your path to finance approval is different from that of a salaried employee. Many business owners make the mistake of waiting until they want to buy a home to get their finances in order, which is often too late. Proactive, long-term preparation is the true key to a successful application. Therefore, specialist Brokers for self-employed Perth can be your most valuable partner in this planning phase. This guide, brought to you by the team at Strawberry Finance, offers a checklist for getting your business "loan-ready."

The Golden Rule: Start Planning at Least a Year Early

The most important piece of advice for any self-employed person wanting a home loan is to start preparing early. Lenders will almost always want to see your last two full years of financial records, including your lodged tax returns. This means that your financial performance and bookkeeping from today will directly impact your ability to get a loan in one or two years. You cannot simply fix your financials a month before you apply. You must demonstrate a consistent and stable history. Consequently, thinking about your home loan application as a long-term project is the first step to success.

Preparing Your Financials: A 12-Month Checklist

Getting your business finances in order is the foundation of a strong home loan application. By focusing on these key areas in the year leading up to your application, you can present yourself to lenders in the best possible light.

Clean Up Your Bookkeeping

First, ensure your bookkeeping is impeccable. It is crucial to maintain a strict separation between your business and personal expenses. Lenders need to see a clear picture of your business's true profitability. Using professional accounting software can help you track everything accurately. This disciplined approach not only helps with your loan application but also makes managing your business and tax obligations much easier.

Lodge Your Tax and BAS on Time

Lenders view your tax compliance as a reflection of your overall responsibility. Always lodge your Business Activity Statements (BAS) and tax returns on time. Being behind on your tax obligations is a major red flag for any lender. It suggests financial disorganisation or distress. Therefore, staying up-to-date with the ATO is a non-negotiable part of preparing for a home loan.

Understand Your "Add-Backs"

This is a critical concept that specialist brokers for the self-employed in Perth can help you with. Your taxable business income is often not the full picture of your earnings. Certain expenses can be legally "added back" to your income for the purpose of a loan application. For example, expenses like vehicle depreciation, one-off equipment purchases, or extra superannuation contributions can often be added back. This presents a more accurate picture of your business's cash flow and can significantly increase your borrowing capacity. Working with a good accountant and a knowledgeable broker to identify these add-backs is essential.

Reduce Other Debts

Finally, in the months before you apply, focus on reducing your other personal and business debts. Paying down credit card balances, car loans, and other personal loans will improve your borrowing capacity. Lenders will look at your total debt commitments when assessing your application. The fewer debts you have, the stronger your application will be.

Why Early Engagement with a Broker is Key

You should not wait until you are ready to apply to speak with a mortgage broker. Engaging with a specialist broker early in your preparation phase is one of the smartest moves you can make. A good broker can perform a "pre-assessment" of your finances. They can review your current situation and provide a clear list of what you need to improve over the next 6-12 months. They can also work alongside your accountant. This ensures that your financial statements are prepared in a way that is clear and favourable to lenders. This early guidance can save you from making mistakes that could delay your application down the track.

In conclusion, for self-employed individuals in Perth, a successful home loan application is the result of careful and deliberate preparation. It is not something that can be rushed. By taking a proactive approach to your business financials, you can confidently step into the property market.

This guide to financial preparation was provided by Strawberry Finance. They are passionate about helping entrepreneurs achieve their property goals. For proactive advice from specialist brokers for the self-employed in Perth, their team can help you create a plan for success.