Quick answer
Self-employed New Zealanders, including contractors, freelancers and owner-operators, can borrow for business purposes through bank statement and low doc lending, equipment finance, or property-backed loans. Lenders want to see that income is reliable even if it's irregular, usually through twelve months of bank statements, GST returns, IR3 returns or an accountant's letter. Steady deposits and current tax filings matter more than a salary-style payslip.
Key points
- Irregular income is fine if it's reliable over time.
- Bank statements and GST returns often replace payslips and accounts.
- Keep tax filings current; IRD debt narrows choices.
- Property opens larger amounts and more flexibility.
- Income evidence
- Bank statements, GST returns, IR3, accountant's letter
- Unsecured range
- $5,000 to $500,000 (typical)
- With property
- $20,000 to $5,000,000
- Best history
- 12 months of statements
When you work for yourself, there’s no payslip to hand a lender. Income arrives when clients pay, not on the 20th of each month. Some months are huge; others are quiet. For lenders used to salaried borrowers, that can look risky. For lenders who specialise in self-employed people, it’s just normal, and they have ways of seeing the real picture.
Who counts as self-employed
For lending purposes, it’s anyone whose income comes from their own business rather than wages: sole traders, contractors paid by invoice, freelancers, owner-operators of small companies who pay themselves through drawings or shareholder salaries, and partners in a partnership. Hairdressers renting a chair, IT contractors, couriers, consultants and tradies all fit.
How lenders see irregular income
| What they look at | How it helps |
|---|---|
| Twelve months of bank statements | Shows average income across good and quiet months |
| GST returns | Confirms sales by period |
| IR3 or company returns | Shows taxable income for full years |
| Accountant’s letter | Confirms income and that tax is under control |
| Client contracts or invoices | Shows ongoing work |
| IRD statement | Shows whether tax is owed |
The key word is reliable, not regular. A designer who earns $3,000 one month and $15,000 the next, averaging $9,000 across the year, can be a good borrower.
Your lending options
Bank statement and low doc loans. Assessed on recent banking and GST rather than full accounts. See bank statement business loans and low doc business loans.
Equipment finance. For vehicles, computers, salon fit-outs or tools, secured on the asset. See equipment finance.
Lines of credit. For smoothing quiet months, drawn and repaid as needed. See business line of credit.
Property-backed loans. For larger amounts, or when paperwork is behind. See second mortgage business loans.
Making your income easy to see
- Use a dedicated business account for all client payments and business costs.
- Pay yourself regularly into a personal account, even if the amount varies.
- Set aside GST and provisional tax in a separate account as payments arrive.
- File returns on time and keep copies in one place.
- Invoice promptly and chase late payers, so deposits reflect the work you do.
Taxable income versus real income
Self-employed people often claim legitimate expenses that lower taxable income. That’s sensible tax planning but can make your returns look lean to a lender. Bank statement lenders see deposits rather than taxable profit, which can help. Some lenders also add back non-cash items like depreciation. Ask your accountant which of your expenses are non-cash, so you can point them out.
An illustrative example
A Dunedin hairdresser has rented a chair in a salon for three years and now wants to open her own two-chair studio. She needs $48,000 for the fit-out and equipment. Her IR3 shows taxable income of $61,000, but her bank statements show deposits averaging $8,500 a month, and her GST returns are current. A low doc lender approves the loan on twelve months of statements, GST returns and a short letter from her accountant. Illustrative only.
When the paperwork is behind
If returns are overdue or there’s an IRD debt, your options narrow but don’t disappear. Filing outstanding returns, even before you can pay, is the single most useful step. If property is available, a no doc or low doc property-backed loan can work while you catch up. See IRD tax debt loans.
Protecting yourself
Self-employed income can drop suddenly if a big client leaves. Borrow conservatively, keep a buffer for quiet months, and avoid tying up your home unless the need is clear and the repayment plan is solid. Get independent legal advice for any loan secured on property.
Paying yourself in a way lenders can follow
How you take money out of the business affects how a lender reads your income. Regular drawings or a shareholder salary on a set day each fortnight are easier to follow than irregular lump sums. If you’re a company owner, make sure shareholder salaries are declared and that your shareholder current account isn’t heavily overdrawn, because an overdrawn account can look like money owed back to the company. Keep a short note of any one-off withdrawals, such as a house deposit or a family event, so they don’t raise questions.
When your accountant can help
A letter from your accountant confirming that returns are being prepared, or summarising recent trading, can bridge the gap when your latest year hasn’t been filed. It won’t replace the numbers, but it gives a lender a professional view of where things stand and shows the paperwork is in hand rather than ignored.
Show us how you earn
Tell us what you do, roughly what comes into your account each month and where your returns are up to. Asking won’t mark your credit file, your details stay with one person rather than going down a list, and that person will phone you to talk through lenders that understand self-employed income. Honest figures get you a better match. Start here.
Frequently asked questions
I'm a contractor paid by invoice. Does that count as self-employed?
For lending, yes. Lenders will look at your invoices and the deposits in your bank account rather than payslips.
My income dropped last year but has recovered. Will lenders see that?
Recent bank statements show the recovery even if last year's return doesn't. Include a short explanation.
Can I borrow if I've only been self-employed for a few months?
It's harder. Lenders may consider your earlier work history in the same field, especially with property as security.
Do I need an accountant?
It helps. An accountant's letter can support a low doc application, and up-to-date returns open more lenders.