Major banks want two years of ABN history before they'll consider a self-employed home loan. But if you've been running your business for 12 months with strong, consistent income, specialist lenders have pathways — and a good broker knows exactly which ones.
2 yrs
Major bank minimum
12 mo
Specialist lender min.
20%
Deposit usually req.
Free
ABN assessment
Why Banks Require 2 Years
Banks see self-employment income as inherently less stable than PAYG income. The two-year requirement exists because it gives them two full tax returns — enough to see whether income is growing, stable, or declining, and whether the first year's income was a reliable indicator of ongoing earnings.
With only one year of trading, a bank can't calculate a two-year average, can't trend your income, and has limited ability to assess whether the business is sustainable. This isn't a judgement about your skill — it's a risk model limitation.
The good news: specialist lenders, second-tier banks, and low-doc providers have built specific products for exactly this situation. They rely on different forms of income evidence — particularly BAS statements and business bank statements — which tell a more current story than last year's tax return.
Which Lenders Consider 1-Year ABN Applicants
Second-Tier Banks (some, case-by-case)
Lenders like Macquarie, ING, and Suncorp may consider 12+ months of ABN history in certain circumstances — typically where income is strong, the industry is stable, and the borrower has prior employment in the same field. These aren't published products; they're policy exceptions assessed individually.
Specialist Alt-Doc Lenders (dedicated products)
Lenders with specific 12-month ABN pathways using BAS statements or accountant's income declarations. These lenders were built for non-standard income scenarios. Rates are typically 0.3–0.8% above equivalent full-doc products — a premium that can often be refinanced away once 2 years of trading history exists.
Non-Conforming Lenders (6–12 month ABN)
Pepper Money, Liberty, La Trobe, and similar lenders may consider even shorter ABN history in specific circumstances. These are higher-rate products but exist as a genuine pathway when other options aren't available. Same strategy applies: get in now, refinance when 2-year history is established.
Prior Employment in the Same Industry
If you spent 5 years as a PAYG employee in your industry before starting your ABN, lenders view the ABN income as far more credible. A carpenter with 8 years of employment history who started their own building company 12 months ago presents a very different risk profile to someone who entered the industry independently. Document your full employment history — it matters.
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What You Need to Qualify with 1-Year ABN
While every lender differs, here are the common requirements across most 12-month ABN pathways:
- 12 months minimum ABN registration. The date on your ABN certificate must be at least 12 months before the application date. Some lenders use 12 months of GST registration as the benchmark instead
- 20% deposit (80% LVR). Most 1-year ABN products require a 20% deposit to keep LMI out of the equation. This is the strongest compensating factor for the short trading history
- Clean credit file. No defaults, no missed payments, no multiple enquiries. Your credit file needs to be spotless to compensate for the limited trading history
- 12 months of BAS statements. If you're GST-registered, 12 months of BAS statements are the most powerful evidence of consistent business activity and income
- 12 months of business bank statements. Showing consistent income deposits, manageable expenses, and healthy cash flow. Lenders look at the average monthly income over the 12 months
- Accountant's income declaration. A letter or declaration from your accountant confirming your income for the past 12 months and their view on its ongoing sustainability
Documenting Your Income for a 1-Year ABN Loan
Most 1-year ABN applications use either a full-doc pathway (one year of tax returns) or an alt-doc pathway (BAS statements or bank statements in lieu of tax returns). The right choice depends on what your tax return shows:
- If your tax return shows strong income close to your actual revenue — use it (full-doc)
- If your tax return shows very low taxable income due to deductions, and your BAS/bank statements show much stronger revenue — the alt-doc pathway may give you a higher assessed income
See our related guide on how banks assess self-employed income for a detailed explanation of add-backs, assessed income, and the difference between lender tiers.
Should You Wait for 2 Years?
If your 2-year ABN milestone is 6–9 months away, it's worth modelling both options with a broker:
- Option A: Apply now at 1 year. Narrower lender choice, potentially higher rate (0.3–0.6% premium). You get into the property sooner. In a rising market, earlier entry can offset the rate premium significantly
- Option B: Wait for 2 years. Full lender choice, best rates available. If property prices rise during the wait period, you may pay significantly more for the same property
Run the numbers: if the property you want is in a suburb growing at 5–8% per year, a 9-month wait adds ~4–6% to the purchase price — which can easily exceed the total rate premium saved by waiting. A broker can model this specifically for your target suburb and budget. Use our Sydney home loan calculators to estimate the real cost of waiting versus applying now.
If you're exploring alternatives to a traditional bank loan, our guides on low-doc home loans, contractor home loans, and self-employed lending cover other pathways for ABN-based borrowers.
Frequently Asked Questions
Yes — specialist lenders and some second-tier banks have 12-month pathways. Major banks will almost always decline under 2 years. Conditions are stricter: typically 20% deposit, strong consistent income via BAS or bank statements, clean credit, and ideally prior industry employment history.
Typically: 12 months of BAS statements or business bank statements, accountant's income declaration, ABN certificate, 1 year of tax returns (if available), and 6 months of personal bank statements. Exact requirements vary by lender — a broker will confirm what each lender needs.
Most 1-year ABN lenders require 20% deposit. Some specialist lenders may go higher LVR with LMI, but this is less common for short ABN history. A solid 20% deposit is the strongest compensating factor for limited trading history.
Depends on your timeline and market conditions. In rising markets, waiting can cost more than the rate premium you save. If your target suburb is growing at 5%+/year, a 9-month wait adds ~4% to the purchase price — often exceeding the total saving from a lower rate. A broker can model the real cost difference for your specific situation.
Previous employment in the same industry significantly strengthens a 1-year ABN application. A 10-year employed carpenter who started their own company 12 months ago presents much stronger income credibility than someone entirely new to the trade. Always document your full employment history.
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