Home Loans for Business Owners: Company Financials, Add-Backs and Retained Profits

In short: If you own the company you work in, a home loan lender looks at two sets of numbers: your personal tax returns and the company's financial statements and returns, usually for the last two years. Some lenders count only what the company paid you; others add your share of the company's profit, with non-cash and one-off costs added back. That choice can move the income a lender uses by six figures. When you are ready, a home loan request on ADS can reach 200+ verified lenders and brokers.

Key takeaways

Expect to provide two years of individual and company tax returns, company financial statements and notices of assessment; some lenders accept one year (indicative).
Lenders differ most on whether they count company profit you have not drawn. Ask how a lender treats it before you choose one.
Add-backs such as depreciation, one-off costs and interest on debt being repaid can lift assessable income, but each needs evidence.
Retained profits are company money, not yours; some lenders count them, many count only what was paid out.
A Division 7A loan from your company can appear as a personal commitment and can affect how a deposit drawn from the company is treated.
APRA expects lenders to test repayments at a rate at least 3 percentage points above the loan rate.

How do lenders assess income when you own the company?

When you are an employee, a lender reads your payslips. When you own the company that pays you, the lender has to decide how much of the company's earnings is really yours to spend on a mortgage. Lenders must make reasonable inquiries about your financial situation and take reasonable steps to verify it, under the responsible lending obligations ASIC describes in its responsible lending guidance. For a company owner that means reading through to the company.

Lenders broadly take one of three approaches, and policies vary by lender:

Approach	Income counted	Who it tends to suit
Personal income only	Salary, dividends and distributions shown on your personal returns	Owners who pay themselves most of the profit each year
Personal income plus share of company profit	Your salary plus your ownership share of the company's net profit, usually after tax	Owners who leave profit in the company
Company profit with add-backs	As above, with non-cash and one-off costs added back to the company's profit	Owners whose accounts carry heavy depreciation or a one-off cost

The broad rules for self-employed borrowers are in our self-employed home loan guide. This post is about the company layer: what the lender reads in the company's accounts and how it turns that into income.

Which documents will the lender ask for?

Document	Whose	What the lender checks
Individual tax returns, usually two years	Yours	Salary, dividends, distributions, other income
Notices of assessment	Yours	That the returns were lodged and assessed as shown
Company tax returns, usually two years	Company	Taxable income and consistency with the accounts
Company financial statements (profit and loss, balance sheet)	Company	Profit trend, add-backs, cash, debts, loans to directors
ATO statements or a tax portal printout	Company and you	Lodgement status and any tax debt or payment plan
Business bank and loan statements	Company	Trading conduct and the company's own debt repayments
Accountant's letter (some lenders)	Accountant	Confirms figures, add-backs or the current year's position

Two years is common, but a lender may accept one year if the business has a longer history or you were in the same industry before, and alternative documents are possible on low doc loans (indicative; policies vary). Our guide to how long you need to be self-employed covers the minimums.

A tax debt on a payment plan is not always a problem, but unlodged returns usually are, because there is nothing to assess. Check your company's and your own lodgement position before you start.

What are add-backs, and which ones do lenders accept?

An add-back is a cost in the company's profit and loss that a lender agrees not to count against you, because it is non-cash, will not recur, or is already counted somewhere else. Each one increases the profit the lender uses. Lenders differ on which they accept; the table shows common treatment, not any lender's policy.

Add-back	Often accepted?	Evidence a lender wants
Depreciation and amortisation	Usually, as non-cash costs	The financial statements; some lenders query it where assets need regular replacement
Interest on company debt	Often, if the debt is being repaid or its repayments are counted separately	Loan statements showing the facility
One-off costs (legal dispute, relocation, a write-off)	Sometimes	Invoices and an accountant's note showing it will not recur
Your own salary paid by the company	Yes, to avoid counting it twice	Payslips or the personal return showing it as income
Super contributions for you above the compulsory amount	Some lenders	The accounts and super statements
Costs called one-off that happen every year	No	Lenders compare years and will notice

Add-backs work both ways. If you add back interest on a company loan, the lender will usually count that loan's repayments as a commitment instead. Otherwise it would be counting the income without the debt.

Worked example: same owner, two lenders

For illustration only. Sam owns 100% of an electrical contracting company and pays himself a $100,000 salary. The company's profit before tax, after paying Sam's salary, was $240,000 in FY2026. In FY2025 its adjusted profit, calculated the same way, was $250,000.

FY2026 company profit	Amount
Net profit before tax	$240,000
Add back depreciation	$30,000
Add back one-off legal costs (dispute settled)	$18,000
Add back interest on a vehicle loan (repayments counted as a commitment instead)	$6,000
Adjusted profit before tax	$294,000

The company paid Sam a $50,000 dividend in FY2026 and kept the rest of its after-tax profit.

Lender A counts personal income only: $100,000 salary + $50,000 dividends = $150,000 a year before personal tax, with franking credits treated under its own policy.
Lender B counts salary plus company profit: it averages the two years of adjusted profit, ($250,000 + $294,000) / 2 = $272,000, and adds Sam's $100,000 salary: $372,000 before tax. It then deducts company tax under its own method and does not count the dividend separately, because the dividend came out of that same profit.

Before tax, the two lenders start $222,000 a year apart on the same person. After tax the gap narrows, but it can still be the difference between the home Sam wants and one well short of it. Lenders also choose between averaging, the lower year or the latest year when profit is rising; Lender B averaged.

The borrowing power calculator lets you test both income figures against the same loan and expenses.

How do lenders treat retained profits?

Retained profits are profits the company has kept rather than paid out as salary or dividends. They belong to the company, not to you, and a lender has to decide whether they are really available to you. Policies differ:

Some lenders count only what reached you personally, as Lender A did. Retained profits then add nothing to your borrowing power, however large they are.
Some count your share of the company's profit, including what was kept, if you control the company and the balance sheet shows the cash is genuinely there and not needed for working capital or debt.
Some count retained profits only up to what the company could pay without straining its cash flow, using the balance sheet to judge it.

If you plan to take out a home loan in the next year or two, talk to your accountant before the end of the financial year about how much the company pays you, because salary and dividends drawn change both your tax and the income some lenders will count. That is a tax decision as well as a lending one; this post is general information, not tax advice.

What is a Division 7A loan, and why does a lender care?

Division 7A of the Income Tax Assessment Act 1936 deals with distributions from private companies to shareholders and their associates. In general terms, if your company lends you money, pays an amount for you or forgives a debt you owe it, the amount can be treated as an unfranked dividend unless it is repaid in time or put under a complying loan agreement with minimum yearly repayments and a benchmark interest rate.

For a home loan, this shows up in three ways:

On the balance sheet. A loan to you appears as an asset of the company. A lender will ask what it is and how it is being repaid.
As a personal commitment. The minimum yearly repayments on a complying loan are your obligation, so some lenders count them as a commitment in serviceability.
In the deposit. Taking money out of the company for the deposit is a payment that Division 7A may catch. Your accountant needs to decide how it is treated before the money moves, and the lender will want to see where the deposit came from.

The rules are detailed; confirm your position with your accountant before you rely on company money for any part of the purchase.

How does the APRA buffer change the numbers?

APRA expects banks to assess whether a borrower can meet repayments at a rate at least 3 percentage points above the loan's rate. Its 28 May 2026 macroprudential update kept the serviceability buffer at 3 percentage points. Non-bank lenders are not regulated by APRA in the same way and set their own assessment buffers.

For illustration, assume a loan rate of 6.4% (an example, not an offer). The lender assesses repayments at 9.4%. On a $900,000 loan over 30 years:

Rate	Monthly repayment
6.4% (illustrative loan rate)	$5,630
9.4% (rate plus 3-point buffer)	$7,502
Difference the lender must see you can carry	$1,873

That is why the income method matters so much for business owners: a lender adding back $50,000 of costs adds real capacity at the assessment rate. Rates move: the RBA's cash rate target was 4.60% from 30 September 2026; check the current target before you rely on any figure. Our explainer on the borrowing power formula, HEM and buffers shows the rest of the calculation.

How do banks, non-banks and low doc lenders compare?

	Banks	Non-bank lenders	Low doc options
Company income	Varies; many count personal income plus some company profit	Often more flexible on company profit and add-backs	Income declared and supported by BAS, bank statements or an accountant's letter
Documents	Full: two years of personal and company returns	Full, sometimes one year	Alternative documents in place of returns
Price	Usually sharpest for clean files	Can be higher for complex files	Usually higher, with lower maximum LVRs

A general guide only; individual lenders differ. If your returns are behind, our guide to low doc home loans for the self-employed explains what lenders accept in their place.

What should you prepare before you look for a home loan?

Lodge the last two years of company and personal returns, and get the notices of assessment.
Ask your accountant for a one-page schedule of add-backs, with the evidence for each.
Check the company's and your own ATO position, and put any debt on a plan you can show is being met.
Tidy the director loan account and, if there is a Division 7A loan, have the agreement and repayment history ready.
Separate personal spending from the company's accounts for the months before you borrow.
Know how much the company owes and which personal guarantees you have given, because the lender will ask.

Lenders read a well-prepared file more easily and on better terms, and a broker who knows which lenders count company profit can save you a declined loan. Speak to a licensed broker or your accountant about your own position.

Frequently asked questions

Can I get a home loan using my company’s profit?

Often, yes, but it depends on the lender. Some count only the salary and dividends on your personal returns. Others add your share of the company's net profit, sometimes with add-backs, if you own and control the company and its accounts support it. Ask how a lender treats company profit before you rely on it.

How many years of financials do lenders need from a company director?

Two years of personal and company tax returns, with company financial statements and notices of assessment, is the most common requirement. Some lenders accept one year where the business or your industry experience is longer, and low doc loans use alternative documents. Policies vary by lender and change over time.

Do lenders add back depreciation for business owners?

Many do, because depreciation is a non-cash cost. Some lenders limit it where the business must keep replacing equipment, since the cash is spent eventually. Interest and one-off costs can also be added back with evidence. If interest is added back, the related loan repayments are usually counted as a commitment instead.

Do retained profits count as income for a home loan?

Not automatically. Retained profits belong to the company. Some lenders count your share if you control the company and the balance sheet shows the cash is available; many count only what was paid to you as salary or dividends. Talk to your accountant before year-end about what the company pays you.

Will a Division 7A loan affect my home loan?

It can. A loan from your company appears on its balance sheet, and the minimum yearly repayments on a complying loan agreement may be counted as your personal commitment. Using company money for a deposit can also raise Division 7A issues, so get your accountant's advice before the money moves.

Sources

Responsible lending obligations — Australian Securities and Investments Commission
Income Tax Assessment Act 1936 (Division 7A) — Federal Register of Legislation
APRA maintains current macroprudential policy settings (28 May 2026) — Australian Prudential Regulation Authority
Cash rate target — Reserve Bank of Australia

Rates checked as at 24 October 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.

General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.

Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.