Key Takeaways
- The two-year rule is a myth. There is no longer a single two-year rule. Different lenders draw the line at six months, twelve months and two years, each with its own documents, deposit and price.
- Six months is possible. A small number of specialist lenders will lend at six months on an ABN, in some cases up to about 85 per cent of the property value, if the deposit and the paperwork are there. The rate reflects the risk.
- 'One year of financials' and 'one year of ABN' are different things. A lender accepting one year of financials may still want the ABN itself to be older. Confirm both before you apply.
- What you did before matters. Prior experience in the same trade, clean bank statements, lodged BAS and a tax return that is final rather than draft all shift the answer.
Going out on your own is a big step, and for a lot of people the next big step is a home. The two often arrive together, and that is where the trouble starts. Most of what you will read online says lenders want two full years of self-employed income before they will look at you, and plenty of people take that at face value, put the house on hold and wait. In my experience that is rarely necessary. The Australian Bureau of Statistics counted 460,461 new businesses in 2025-26 alone, and the lending market has moved a long way to meet them. The honest position is this: at six months some lenders will lend, at twelve months quite a few will, and at two years everyone will. The job is working out which tier you are in and who to ask.
Why do lenders care how long you have been trading?
A home loan for a self-employed borrower is the same loan everyone else gets. What changes is how the lender satisfies itself that your income is real and likely to continue. A payslip does that in one page. A business needs more, and the traditional way to get it was two years of tax returns, averaged.
That averaging is the part that hurts a new business most. If your first year was lean while you found your feet and your second year is strong, a lender that averages the two is using a number that bears no resemblance to what you now earn. Some lenders still do exactly that. Others will take the most recent year, or add back one-off costs, or look at your trading bank account instead of your tax return. The difference between those policies can be the difference between a yes and a no on identical figures.
What does six months on an ABN actually get you?
More than most people expect. There is a group of specialist lenders who will consider an application at six months, provided you can show the business is trading and earning. Because there is no tax return yet, they rely on what is called 'alternative documentation' - your Business Activity Statements, six to twelve months of business bank statements, or a letter from your accountant confirming your income. One or two of these, not all of them.
The trade-offs are real. You will generally need a reasonable deposit, although some of these lenders will go to around 85 per cent of the property value, which is further than many people assume. And the interest rate will be noticeably higher than a standard loan. That is the price of borrowing before the track record exists, and it is worth paying only if buying now matters more than waiting. For some people it does: a lease ending, a growing family, a property that will not come around again. For others, twelve months of patience buys a much better deal.
Pro tip: A specialist loan at six months does not have to be forever. Once you have two years of returns, the loan can usually be refinanced onto standard pricing. Treat it as a bridge to the full market, not a life sentence.
What changes at twelve months?
Choice. At twelve months the number of lenders willing to look at you grows considerably, and with it the competition on price. Some lenders will now work from a single year of financials - one lodged tax return and notice of assessment - and the alternative documentation route is still open for anyone whose return is not finalised yet. Lending to 80 per cent of the property value becomes routine, although some lenders will go higher.
This is also where the detail starts to matter. Lenders need the tax return lodged and final, not an accountant's draft. Some will accept a strong twelve months only if you are in the same industry you worked in as an employee. Some look at business debts separately from income, so a vehicle loan or equipment finance in the company's name affects the assessment differently from lender to lender. None of this is visible on a bank's website. It is credit policy, and it is the main thing a broker brings to a self-employed application.
'One year of financials' is not the same thing as 'one year of ABN'
This trips people up constantly, so it is worth its own section. When a lender says it will accept one year of financials, it means one year of income evidence. It may still require the ABN itself to have been registered for two years. The two conditions are set separately, and a business that has been going for fourteen months with one good return can satisfy the first and fail the second at the same lender.
So there are two questions to ask of any lender, not one: how old does my ABN need to be, and how much income history do you want to see? The answers vary more than you would think, and a lender that is wrong on one is simply the wrong lender, not a verdict on you.
The documents that do the heavy lifting
Whatever tier you are in, the same handful of documents decide the outcome, and the state they are in matters as much as what they say.
- Business Activity Statements. If you are registered for GST, these are the single most useful document for a new business, because they show quarterly turnover in a form a lender trusts. Lodge them on time. A late BAS is a red flag to a credit assessor in a way that is out of proportion to the offence.
- Business bank statements. Six to twelve months of the account the business trades through. Avoid dishonoured payments, and be ready to explain any large transfers.
- An accountant's letter. Some lenders accept this in place of a return. It carries more weight when your accountant has prepared your BAS as well.
- Your tax return and notice of assessment. When you have one, make sure it is lodged with the ATO, not sitting in draft. A draft is worth very little to most lenders.
One point on GST. The ATO requires you to register once your turnover reaches $75,000. Below that it is optional, and a lot of new businesses leave it. For lending purposes that can close the door on the BAS-based options, because there is no BAS to show. If you are approaching the threshold, registering early does your loan application a favour.
Pro tip: Keep every lodgement current - BAS, tax return, notice of assessment - and lodge them on time, not early in the week you want to apply. Up-to-date paperwork, more than anything else, is what separates a smooth self-employed application from a painful one.
What you can do now to improve your position
If you worked in the same trade or profession before you went out on your own, say so, and have the evidence ready - a reference from your old employer, or payslips from the role. Several lenders treat continuous industry experience as a reason to relax their ABN-age rules, on the sensible basis that a plumber who was employed for ten years and has been self-employed for one is not really a new plumber.
Build the deposit. At six months it is close to compulsory and at twelve months it widens your options and lowers your rate. A family guarantee can bridge the gap for some people, and is worth a conversation before you assume you have to wait.
And keep applications to a minimum. Every application is recorded on your credit file - not the outcome, just the fact of it - and several applications to different lenders in a short period will lower your credit score and can eventually cause a decline on their own. This is the reason to sit down with me first: I can tell you which lenders your situation will work with and which it will not, so you apply once, to the right one.
Where to start
If you have been trading for six months or more and you are thinking about buying, the useful first step is a conversation about which tier you are in and what the realistic numbers look like, before you fall for a property. Our borrowing power calculator gives a rough starting point, but with a new business the lender-by-lender policy matters far more than any online estimate, and that is what I spend my days on. With 80+ lenders to choose from, I know which ones take a one-year business seriously and on what terms. Book a chat and bring your BAS. It is a shorter conversation than you expect.
Frequently asked questions
The questions most often asked about lending to a new business.
Can I get a home loan with only six months on my ABN?
Sometimes, yes. A small number of specialist lenders will consider it, using your BAS, business bank statements or an accountant's letter instead of a tax return. You will need a solid deposit, although some will lend to around 85 per cent of the property value, and the rate will be higher than a standard loan. It is a bridge until you can refinance on two years of returns.
Do I need to be registered for GST to get a self-employed home loan?
Not always, but it helps. Many of the alternative documentation options rely on your BAS as evidence of income, and without GST registration there is no BAS. The ATO requires registration at $75,000 of turnover. If you are below that and approaching it, registering early keeps more lending options open.
Will I pay a higher interest rate because my business is new?
At six months, almost certainly. At twelve months, less so, because more lenders compete for you and several will price a one-year business close to standard. At two years you have the full market. Whatever you start on, it is normal to refinance to better pricing once the track record is there.
Does it help that I worked in the same industry before I started my business?
Yes, with several lenders it makes a real difference. Continuous experience in the same trade is treated as a reason to relax the ABN-age requirement, sometimes down to one year. Have a reference or old payslips ready to prove it.
Sources
- Australian Bureau of Statistics, Counts of Australian Businesses, including Entries and Exits - 460,461 business entries in 2025-26.
- Australian Taxation Office, Registering for GST - $75,000 turnover threshold.
- ASIC Moneysmart, Lenders mortgage insurance (LMI).
