The Underserved Multibillion-Dollar Opportunity
This introductory section frames the significant, yet often overlooked, market of self-employed individuals in Australia. Understanding the scale and characteristics of this segment is the first step to unlocking its potential for your brokerage.
2.6M
Small Businesses
Constituting 97% of all businesses in Australia.
$590B
Annual Economic Contribution
Representing nearly one-third of the nation's GDP.
1.1M
Independent Contractors
The booming "gig economy" makes up 7.5% of all employed individuals.
62.5%
Are Sole Traders
The largest single group within the business community.
Visualizing the Landscape
While the self-employed sector is diverse, sole traders and non-employing businesses form its core. This group is most likely to face challenges with traditional PAYG-focused lending assessments. Recognizing this composition helps you tailor your approach and communication, positioning yourself as a specialist who understands their unique financial reality.
This chart illustrates the dominance of non-employing businesses (sole traders and partnerships without employees) within Australia's business landscape, highlighting the core client base for specialist broker services.
The Shifting Landscape: Lender Policy Explorer
The major banks are adapting to the rise of self-employment, but their policies are nuanced and complex. This interactive tool helps you quickly compare their approaches to find the best fit for your client. Click on a lender to view their specific policy details.
Westpac: The 1-Year Game-Changer
Best for: New or rapidly growing businesses.
Westpac's policy allows assessment based on the most recent single financial year's income. This is a powerful tool for clients with strong recent growth who would be penalised by a traditional two-year average.
- ✓Assessment: Most recent single year's financials.
- ✓Minimum History: 1 full financial year completed.
- ⚠Broker Consideration: Halves the required paperwork and can dramatically increase borrowing capacity for clients with a strong FY25.
CBA: Simple Income Verification
Best for: Incorporated business owners paying themselves a regular wage.
CBA's stream is designed for established company directors. It can be a fast-track option if the client's business has a history of profitability and consistent salary payments.
- ✓Assessment: Uses regular salary credits (min. 6 months).
- ✓Minimum History: 2 years of profitable trading.
- ⚠Broker Consideration: Ideal for simplifying applications for clients with a clear, PAYG-like income structure from their own company.
ANZ: The Shading Nuance
Best for: Clients with stable income where LMI is a factor.
ANZ accepts one year of financials, but brokers must be aware of specific shading rules, especially for LMI deals. Understanding this is critical for accurately calculating borrowing power.
- ✓Assessment: 1-year (with shading) or 2-year variance testing.
- ✓Minimum History: 18-24 months ABN/ACN registration.
- ⚠Broker Consideration: For LMI deals with 1 year's financials, a flat 20% shading is applied to NPBT. You must factor this in to manage client expectations.
NAB: The Holistic Assessment
Best for: Complex cases needing a case-by-case review.
As a major business bank, NAB promotes a holistic assessment. They generally use the most recent year's income, but may average or cap it if growth is exceptionally high.
- ✓Assessment: Uses latest year if growth is <20%; averages or caps at 120% if growth is >20%.
- ✓Minimum History: Prefers 2 years trading.
- ⚠Broker Consideration: Leverages their Business Banking expertise. Good for strong cases that just miss the rigid criteria of other lenders.
Your Specialist Solutions Toolkit
Beyond the majors, non-bank and specialist lenders offer vital flexibility. This toolkit helps you understand and explain their core offerings: Low/Alt-Doc loans and the alternative income verification methods that make them possible.
Decoding Low-Doc and Alt-Doc Loans
These are not "no-doc" loans. They are essential products for clients who cannot provide standard two-year tax returns but have other ways to prove their income. Your role is to clearly explain the concept and the cost-benefit trade-off to your client.
Who are they for?
- Business owners with up-to-date BAS but lagging tax returns.
- Freelancers whose declared income doesn't reflect true cash flow.
- New ventures with a short but strong trading history.
What's the trade-off?
This flexibility often involves a higher interest rate or a one-off risk fee. You must weigh this cost against the value of securing the finance for your client's goals.
The Broker's Application Playbook
Success is about preparation, documentation, and storytelling. This playbook provides interactive tools to help you build a bulletproof application that presents a clear path to 'yes' for the credit assessor.
Part 1: The Ultimate Document Checklist
Incomplete applications are the primary cause of delays. Use this checklist to ensure you have everything you need for a "one-touch" submission. Check off items as you receive them from your client.
Part 2: Submission Story Builder
Your submission notes are your chance to tell the client's story and pre-empt assessor concerns. A key part of this is justifying add-backs to unlock borrowing power. Click below to learn about common add-backs.
Select an add-back type above to see its description and what you need to verify it.