Could anybody produce a complete list of add-backs used by lenders to calculate borrowing capacity of a self-employed person (through a company structure). I know they include wages, director fees, and bonuses paid to the principal, as well as profit left in the company and depreciation claimed by the company. Is there anything else? Do they include payments to associates (family members) and if they do woudl household members who received money from the company but are not on the app form be considered "associates"?

Say cheese :p

Other addbacks include interest on loans being refinanced (and in some cases all deductible interest expenses whether it is being refinanced or not), abnormal & extraordinary items (non-recurring), and amortisation. I don't think you could add back payments to associated parties. The only way you could include this income in the serviceability calculations is if they are also on the loan application.



Thank you, exactly what I was after. As a matter of interest, which side of the fence are you looking from: are you in lending or in self-employemnt (or both?)

I also found that superannuation payments are added back.

Say cheese :p


I'm not sure how helpful this will be, but, I have often provided a letter to the bank for my clients showing the "real" income after all the discretionary expenses attributable to the owner of the buisness have been assed back.

These include:

Motor Vehicle
Wages to associates
etc etc

It seems to work.


Much depends on the individual Lender, and the assessor.

The most commonly made mistake by most assesors is to not split out the actual business income and any rental income, instead looking just at the bottom line.

In many instances one should present Self employed people in the same way as employed, gross incomes + addbacks, and then rental income on top.