Stated income
You state a reasonable income for your role and industry, supported by evidence the business can produce it. Common where declared income understates reality.
06 — Income
You write off.The bankpunishes you.
Your accountant minimizes your taxable income and your lender reads that same line as your income. Stated-income and bank-statement programs exist precisely because that is a bad measure of a business.
- 2 yrOf business history most programs want to see
- 6–12 moOf bank statements can stand in for tax returns
- Gross-upApplied to declared income by many lenders
- 10%Minimum down on some stated-income programs
The self-employed penalty, and how it is dealt with
If you are incorporated or self-employed, you have spent years being told to write off everything you legitimately can. It works — until you apply for a mortgage, and a bank reads line 15000 of your Notice of Assessment as your income. The vehicle, the home office, the equipment, the salary you deferred to leave money in the company: none of it counts in your favour.
That is what stated-income and bank-statement programs solve. Instead of taking your declared taxable income at face value, these programs look at gross business revenue, at the deposits actually flowing through your accounts, or at a reasonable gross-up of your declared income — and assess you on what the business genuinely produces.
These programs are mainstream. They are offered by credit unions, monolines and alternative lenders across Ontario, and they exist because a very large share of the Canadian economy is self-employed. The reason your branch did not mention one is usually that your branch does not have one.
What we can do here
Bank statement programs
Six to twelve months of business bank statements demonstrate real cash flow. Deposits, not deductions, drive the assessment.
Income gross-up
Many lenders will gross up declared self-employed income by a set percentage to account for legitimate write-offs.
Incorporated or sole proprietor
Both work. Incorporated files bring in financial statements and sometimes retained earnings; sole proprietors lean on T1s and business bank activity.
Commission and contract income
Realtors, consultants, contractors and gig workers face the same problem for the same reason, and the same programs solve it.
New to self-employment
Under two years is harder but not impossible — particularly where you were previously employed doing the same work.
How it runs
From first call to funded.
What to have ready
- Two years of T1 Generals and Notices of Assessment
- Two years of financial statements if incorporated
- Six to twelve months of business bank statements
- Articles of incorporation, HST registration or a business licence
- A statement of business activities showing gross revenue
- Proof of down payment and photo ID
- 01
Show us the real business
What it actually earns, not just what the tax return says. Revenue, margins, how long you have been at it.
- 02
We translate it
Into the language a lender underwrites in, and identify which programs your file genuinely fits.
- 03
Package properly
Self-employed declines usually come from a badly assembled file, not a bad borrower. We answer the underwriter's questions before they ask them.
- 04
Approve and close
Conditions cleared, lawyer instructed, funded — with a note in your file about what to do differently at tax time next year.
Questions
Self-employed — the common questions.
More in the full FAQ, or call 416 230 2920.
How long do I need to be self-employed?
Two years is the standard requirement for most programs. Some lenders will consider less, particularly where you were employed in the same field immediately before going out on your own.
Do I have to stop writing things off?
No. That is the entire point of these programs — they are designed for people whose declared income legitimately understates what the business produces. Keep taking the deductions and let us place the file with a lender that reads the business properly.
Will I pay a higher rate?
Sometimes slightly, depending on the program and the down payment. Bank-statement and stated-income products through credit unions and monolines are often priced very close to conventional. It is rarely the gap people expect.
What if my business had a bad year?
Two years of filings is standard precisely so one weak year does not decide everything. If there is a genuine reason for a dip we document it and present it, rather than letting an underwriter guess.
Talk to a broker