We know an IT expert’s role is to stay on the cutting edge of technology, so that their customers’ or employers’ business can run smoothly and stay protected. And with the advent of AI and other technological advances, tech professionals and tech businesses are becoming more prominent to the banks. While you manage the details of the software or hardware solutions in your business, let us handle the details and speedy execution of your next loan.
Why do banks like helping IT Professionals?
Stable, High-Paying Jobs: IT professionals often have secure, well-paying positions that make them reliable borrowers
In-Demand Skills: There’s a high demand for IT skills, providing further job security and income stability
Educational Background: Many are university-educated or have extensive hands-on experience, adding to their credibility as borrowers
Economic Growth Sector: The IT sector in Australia is experiencing significant growth. According to Gartner, IT spending in Australia is expected to grow by 8.7% in 2025, reaching almost AU$147 billion – Gartner Forecasts IT Spending in Australia to Grow 8.7% in 2025
I work as a PAYG contractor – How is my income assessed?
We understand that contracting is standard in the IT industry, allowing you to earn a higher rate of income than if you had fixed employment.
PAYG Contractors are treated mostly the same as standard PAYG employees for the purposes of income assessment. Different lenders have their own methods for assessing PAYG contractor income, but typically, you will need to present to the bank the following:
- One pay slip, showing at least three months YTD income
- Where we may be in July to September of a new financial year, you will need to provide either your preceding 30 June pay slip, ATO Income Statement for the prior financial year, PAYG Payment Summary or Individual Tax Return to show the prior financial year’s income
- Current employment contract showing contractor arrangement, in particular start date and end date of the contract term – ideally 6 – 12 months
Usually, the longer the contract term, the better, to show the stability of your contracting arrangement. If you can show prior contracts of the same nature, this is also better.
Where the YTD income on your pay slips or your ATO income statement shows you have taken time off (for example, your annualised income is lower than your monthly contract income x 12), the bank will take the more conservative position and will not assume any income for those off-contract periods. They may also require to see prior year’s income via PAYG Payment Summaries or your Tax Returns to show the continuity of your PAYG Contract Income.
I work as an independent contractor under an ABN – how is my income assessed?
If you bill the client directly, charge a daily or hourly rate, and manage your own taxes then it is more likely you are an Independent Contractor or a Freelancer. If you earn your income in this way, you are essentially viewed as self-employed by the banks.
If you are billing via your own personal ABN as a sole trader, then most banks will require seeing 2 years Individual Tax Returns and Notices of Assessment. To derive your income for loan servicing, these banks usually:
- Apply an average of your last 2 year’s income if your last year’s income is higher; or
- Will apply the latest year’s income if it is lower.
If your income has been growing year-on-year and you want to borrow more, some banks can accept your latest year’s income for servicing in isolation – please contact us to see if you are eligible for these banks.
I work as an independent contractor under a Company or Trust – how is my income assessed?
If you provide your IT Services through a Company or Trust, you will still need to provide your last 2 years Individual Tax Returns and Notice of Assessment.
However, in addition, you will need to provide your last 2 years Company and / or Trust
- Financial Statements
- Tax Returns
This is because the bank wants to see the source of where your income is being earned, and your full “flow of income” – how it is billed by your company or trust, and then distributed to you personally. Importantly, if your income and financial statements are being presented the right way, the profits in your business can be added to your personal salary to derive your total servicing income, in turn boosting your borrowing capacity.
I only just became a contractor – how will the bank look at me?
If you have become a PAYG contractor, the bank will look at:
- How long the contract is offered for
- The gap between your former employment
- How many hours or days per week are offered
The longer the PAYG contract, the more likely that your income can be accepted for servicing. However, if the contract length is very short, it’s likely that you will have to wait up to 1 year for a full year’s income to be accepted.
If you are Independent Contracting, whether through an ABN, company or Trust, it is even harder for your income to be accepted. Technically, you will fall under a bank’s self-employed requirements which require your business to be ABN and GST registered for 18 months or more.
It is possible to have some exceptions to this (e.g. 12 months) but you will still need to present at least one full year’s Tax Returns and Financial Statements for your business and personally, for the income to be accepted for loan servicing.
What are my loan options?
If you have only recently become a freelance IT contractor or newly established your IT business, then it may still be possible to get a loan, but you will need to consider:
- Starting to pay yourself a regular wage from your company or trust, and waiting at least 6 months
- Alt Doc loan options which may have higher interest rates, but may be more flexible in considering your scenario
Note, these options are only suitable for independent contractors with a company or trust set up, not sole traders or PAYG Contractors.
How are share bonuses assessed by different lenders?
Share based bonuses are an additional form of remuneration offered by large listed companies, especially if they are fast growing. They are common for mid-level to senior-level employees in Big Tech companies such as Amazon, Google, Meta, Microsoft and Atlassian to name a few as a form of additional performance incentive, but also to encourage retention.
Unfortunately, despite their popularity, not many banks accept share based bonuses to demonstrate your income. Of the banks that do use share based income for loan servicing, the treatment is as follows:
- Only vested shares can form part of your servicing income
- A 20% shading must be applied in line with standard bonus income treatment
- If the shares are denominated in a foreign currency, the value of the vested shares must be converted to AUD, and a further 20% shading applied
- Usually the current share price will be taken. However, if the share price has risen a lot in the past 12 months, the bank may adopt a more conservative stance
Now that I run my own business – will the bank help me with a car loan?
Yes, you can get a car loan to support your business. This is known as “Asset Finance” and we are able to provide alternative loan options compared to what car dealers offer from bank and non-bank lenders.
For a bank loan under $250,000, you will need provide:
- Current Asset & Liability Statements from all borrowers/directors/guarantors
- Commitment schedule listing all loans & finance facilities
- Last 2 years of Financial Statements (Profit & Loss and Balance Sheet)
- Last 2 years of tax returns for individuals and beneficiaries
For larger loans or non-bank loans, please make an enquiry with us so we can evaluate your loan options.
I run an IT or Software company with recurring income – can I get a business loan?
Yes, there are bank and non-bank lenders that can provide your IT or SAAS company with a business loan. This is because lenders recognise that IT or SAAS businesses with recurring income, and repeatable profits, have value in the marketplace if they were to be sold.
Typically, the size of the loan offered will be a multiple of your company’s EBITDA (Earnings Before Interest Tax, Depreciation and Amortisation) and you will need to provide a Directors Guarantee, and a General Security Agreement to secure the loan. Therefore, while these loans are for businesses in the Tech industry, they are not for start-ups or loss making companies.
The business loans can be used to fund growth projects, make acquisitions, or restructure existing debt in the business.
My IT company is actually a “Start Up” – will the bank help me?
At a personal level, your bank may help you with a home loan if you are paying yourself a regular wage from your start up. It also helps if your start up company has been operating for at least 12 months and already trading profitably, even if the profit is small. There will be some additional checks to see if you qualify for a home loan so if this applies to you.
At a company level, if your business is less than 12 months old and loss-making, it is very unlikely a bank will help you with a loan. You may be eligible for a loan from a non-bank, so please make an enquiry here.
I am actually a Tech employee that receives a high income – how are my cash bonuses assessed by different lenders?
Typically, lenders will require you to have 2 years track record from the same employer of receiving a bonus. Usually 80% of the bonus is applied (i.e. a 20% shading) to deal with the variable nature of receiving a bonus. However, there are some lenders that only require you to show one year’s bonus, and others – typically non-bank lenders – can apply 100% of your bonus to loan servicing.
Examples from some lenders we have selected are set out below.
| Lenders | % Bonus income applied | Minimum time in job required | Calculation method |
|---|---|---|---|
| ANZ | 80% | 1 Yr | Lower of latest year or average of 2 yrs |
| Bankwest | 80% | 1 Yr | Most recent year |
| CBA | 80% | 2 Yrs | Average of 2 yrs |
| Macquarie | 80% | 6 Months | Most recent year |
| NAB | 80% | 2 Yrs | Lower of latest year or average of 2 yrs |
| St George /WBC | 80% | 2 Yrs | Bonus received in last 12 months |
| Bluestone | 100% | 1 Yr | Lower of latest year or average of 2 yrs |
| Firstmac | 100% | 1 Yr | Most recent year |
| Liberty | 100% | 2 Yrs | Lower of latest year or average of 2 yrs |
| MA Money | 100% | 6 months | Most recent year |
How are share bonuses assessed by different lenders?
Share based bonuses are an additional form of remuneration offered by large listed companies, especially if they are fast growing. They are common for mid-level to senior-level employees in Big Tech companies such as Amazon, Google, Meta, Microsoft, and Atlassian to name a few as a form of additional performance incentive, but also to encourage retention.
Unfortunately, despite their popularity, not many banks accept share based bonuses to demonstrate your income. Of the banks that do use share based income for loan servicing, the treatment is as follows:
- Only vested shares can form part of your servicing income
- A 20% shading must be applied in line with standard bonus income treatment
- If the shares are denominated in a foreign currency, the value of the vested shares must be converted to AUD, and a further 20% shading applied
- Usually the current share price will be taken. However, if the share price has risen a lot in the past 12 months, the bank may adopt a more conservative stance