The starting point: tax returns
The lender generally starts from your last two years of tax returns and notices of assessment, not your invoices or bank statements. The figure used is reported income, often averaged over two years.
What can be added back
Certain non-cash expenses, such as accounting depreciation, may be added back to income by the lender. Rules differ from lender to lender: what one underwriter accepts, another refuses.
The incorporated business
If you are a shareholder, the lender looks at both your personal compensation — salary and dividends — and the company’s financial statements. Profits retained in the business are not automatically counted as your income.
The tax trade-off
Lowering taxable income through eligible expenses cuts tax and, in the same motion, borrowing capacity. Two or three years before a purchase, that trade-off is worth discussing with your accountant and your broker together.
Stated-income programs
Some lenders offer programs for self-employed borrowers whose reported income understates real capacity, with their own criteria and conditions. They often require a larger down payment.
What strengthens a file
At least two years in the same activity, stable or growing revenue, taxes up to date, a clean credit file, and clearly separated personal and business accounts.
Prepare before applying
Gather returns, notices of assessment, financial statements, and proof of business registration before the first application. A complete file up front avoids the back-and-forth that lets a rate hold expire.
No rate, price, or recommendation on this page. Amounts and limits change: verify them with official sources before deciding.