Can I Get a Home Loan as a Business Owner? Here’s What You Need to Know

Running a business can offer flexibility and freedom, but when it comes to applying for a home loan, it can also come with a few extra hurdles.

At Sprout, one of the most common questions we hear from self-employed clients is:

“My accountant helps me reduce tax, will that hurt my chances of getting a home loan?”

The short answer? It might.

But with a little forward planning and the right advice, getting a loan as a business owner is absolutely possible.

Here’s what to keep in mind when reviewing your profit and loss, tax returns, and planning for personal lending, like a home loan or residential investment.

1. Be Upfront With Your Accountant About Your Lending Goals

It’s standard practice for accountants to help reduce your taxable income by writing off expenses and reinvesting into your business. But if your business shows little to no profit, most banks and lenders will view your income as low or unreliable.

If you’re considering buying a home or investing in property, let your accountant know early. Distributing more profit to yourself, on paper, can make a significant difference when applying for personal lending.

2. Lenders Will Look at Your Tax Returns, Not Just Your Business Reports

When you apply for a home loan as a business owner, lenders will request:

• Your personal tax returns
• Your Notice of Assessments (from the ATO)

These documents are used to verify your actual income. While your business’s profit and loss statement or balance sheet can provide helpful context, they aren’t the primary documents used for loan assessment.

3. What If I Pay Myself a Wage?

Depending on how your business is structured, you may be able to use your wages in a home loan application.

However, in most cases, lenders will still want to see the full business tax return, especially if your wage isn’t stable or represents only part of your income.

4. Getting a Home Loan for a House on a Farm

If you’re living on a rural property or part of a farm, the bank will need to do a property valuation. This is completed by an independent valuer arranged by the lender, and usually involves a full on-site inspection.

The valuation will consider land zoning, infrastructure, and whether it’s a working farm or a rural residential block. The clearer the residential portion is from any farming activity, the more straightforward the lending process will be.

5. What’s the Maximum Acreage a Lender Will Approve?

Some lenders are happy to finance rural residential properties up to 240 acres, depending on:

• The zoning of the land
• Location and infrastructure
• Your deposit size
• Whether the property passes the bank’s rural residential criteria

It’s worth noting: these approvals can vary significantly between lenders, so working with a broker who understands rural lending is key.

6. Can I Use My Farm as Security for Another Property?

Unfortunately, no commercial or farming land usually can’t be used as security for residential lending. If you’re looking to buy an investment property and don’t want to use cash from your business, you’ll need to use equity in a residential asset or contribute a cash deposit from your personal funds.

7. Is Interest-Only Lending Still an Option?

Yes, but only for investment properties, not for owner-occupied homes.

Interest-only loans can help manage cash flow, especially in the early stages of building a property portfolio. They aren’t suitable for everyone, so you must chat with your accountant before making the switch.

8. Building a Residential Property Portfolio: What You’ll Need

Here’s a high-level snapshot of what investing in residential property could look like:

• Deposit required: Minimum of 10% (20% to avoid Lenders Mortgage Insurance)
• Average investment loan interest rate: 6.10%- 6.60%
• Loan example: $400K loan = approx. $2,518/month repayments (P&I)
• Rental return: Around $380–$400 per week (based on average market figures)

With current rates, most residential investment properties are negatively geared, meaning they cost more than they earn, but this can provide tax benefits depending on your situation.

Takeaway: It All Comes Down to Planning

Getting a home loan as a business owner isn’t as simple as it is for salaried employees, but it’s completely achievable with the right advice.

✔️ Keep your financials clean and up to date

✔️ Involve your accountant early if you’re planning to borrow

✔️ Work with a broker who understands self-employed and rural lending

At Sprout, we specialise in supporting business owners and farmers through personal lending. If you’re looking to buy a home, invest in property, or just want to understand your options, we’re here to help.

Let’s talk about finance that fits your future.

Why Off-Farm Investment Matters in Succession Planning

At Sprout Agribusiness, we know that succession becomes far more manageable when farming families have access to additional assets. These assets create flexibility, allowing the current generation to step back from the business while providing options for compensation to non-working family members. One avenue we’re increasingly seeing our clients explore is off-farm investment, particularly in commercial property.

While there’s always a case to be made for sticking to what you know, diversification, when done prudently, can build long-term wealth and resilience. Especially as land prices have risen and productivity margins have tightened across mixed farming businesses (particularly in southern Australia), commercial property has emerged as a popular option. Many of our most progressive clients are choosing hard “bricks and mortar” assets over more volatile options like the stock market.

Let’s walk through an example of how a client might use existing equity in their rural property to purchase a commercial property with strategic debt funding support.

Client Scenario: Purchasing a Commercial Property Using Farm Equity

The Background

A client owns a rural property valued at $15 million, with only $3 million in existing debt, leaving significant equity available for investment.

During a strategic planning session with Sprout Agribusiness, the client identifies a goal of securing off-farm income to support retirement and long-term succession. With a 10–20 year outlook in mind, they decide to invest in a commercial property that offers solid returns.

The Investment

The client engages a professional to source a commercial property in a high-growth area. The chosen asset is valued at $6.5 million, with a net yield of 7% (after management fees and holding costs), equating to an annual net income of $455,000.

Sprout Agribusiness provides tailored debt advisory, helping the client leverage their existing farm equity to fund the purchase.

The Funding Structure

• Borrow $6.5 million at 5.5% interest-only 
• Annual interest cost = $357,500 
• Net rental income = $455,000 
• Excess rental income is used to pay down the loan principal 
• Acquisition costs (e.g., stamp duty) are paid from cash reserves 

Loan-to-Value (LVR) Snapshot

• Total asset base = $21.5 million ($15M farm + $6.5M commercial) 
• Total lending = $9.5 million 
• Combined LVR = 44.1% 

Understanding Commercial Lending Parameters

• Commercial lending is often structured as interest-only, which suits long-term cashflow planning. 
• Depending on lease strength and the borrower’s financial position, LVRs can reach up to 70%. 
• The strength and duration of tenant leases significantly influence the lending criteria. 

Long-Term Benefits of Commercial Investment

• Capital Growth: Over time, property values may increase in line with rental yield growth and CPI-linked rent reviews. 
• Decoupling the Debt: As the loan is paid down, the commercial debt can eventually be removed from the farm’s balance sheet, freeing up the original rural asset. 
• Income Stream: Upon full repayment, the commercial property can offer a secure income stream in retirement or support future family needs. 

Final Thoughts

At Sprout, we believe diversification is about control, not risk. When executed with sound planning, the right professional support, and a clear long-term strategy, investing in commercial property using existing farm equity can strengthen both the family balance sheet and your succession plan.

If you’re interested in exploring how this could work for your business, reach out to the Sprout Agribusiness team today.