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Self-employed? How to get approved for a loan or mortgage

By Raj Mukherjee · October 19, 2026 · 7 min read

Running your own business gives you freedom, but it can make borrowing feel unfair. You might earn more than a salaried friend and still get a smaller approval. That’s not because lenders don’t trust the self-employed. It’s because of how they have to measure income. Once you understand that, you can plan around it.

Why it’s harder: your income on paper

When you’re employed, a lender looks at your salary. When you’re self-employed, they usually look at the income you reported to the CRA. Business expenses lower your taxes, which is good, but they also lower the income a lender can use. Someone whose business earns $120,000 but reports $55,000 after expenses is usually assessed at around $55,000.

Some lenders will add back certain non-cash expenses, like depreciation, or look at your business’s financial statements, which can help. Others offer programs for business owners that rely more on your bank statements and credit history, usually at a somewhat higher rate.

Documents to have ready

• Your last two years of personal tax returns (T1 Generals) and your Notices of Assessment from the CRA.
• Proof there are no taxes owing. An outstanding balance with the CRA is a common reason for a delay or decline. Pay it off, or have proof of a payment arrangement.
• Proof of your business: your business registration or articles of incorporation, a GST/HST number, or a business licence.
• Business bank statements, often for the last 6 to 12 months.
• If you’re incorporated: your company’s financial statements for the last two years.

Having all of this in one place before you apply often makes the difference between a quick approval and weeks of back-and-forth.

How long you’ve been in business matters

Two years of self-employment income on your tax returns gives you the widest choice of lenders and the best rates. If you’re newer than that, you still have options, especially if you’ve stayed in the same line of work. For example, an electrician who went from employee to contractor in the same trade is usually seen more favourably than someone who changed careers.

Mortgages: a few extra points

• Down payment. In Canada, the minimum is 5% on the first $500,000 of the price and 10% on the part from $500,000 to $1.5 million. Homes over $1.5 million need 20% down. A larger down payment can open up more lender options for the self-employed.
• The stress test still applies. You’ll need to qualify at a rate higher than the one you’re offered, which is another reason reported income matters.
• A mortgage agent helps here. Lenders treat self-employed income very differently from one another. A licensed mortgage agent knows which ones fit your situation, at no cost to you in most cases.

Car, personal and business loans

The same rules apply on a smaller scale. For car and personal loans, lenders want to see stable income and manageable payments. Your Notices of Assessment and recent bank statements usually do the job. For business loans, lenders look at the business itself: revenue, time in business and cash flow, often alongside your personal credit.

Plan a year ahead if you can

If you know you’ll be buying a home or a vehicle soon, talk to your accountant about balancing write-offs against the income you’ll want to show. Paying down credit cards, keeping your personal and business accounts separate, and filing your taxes on time all make your application stronger.

This guide is general information, not financial or legal advice. Rules, rates and lender requirements change and vary by province. Estimates from Meet aren’t a credit decision, a pre-approval or an offer of credit.