01
Finding lenders that accept one year
They exist, and several are mainstream rather than specialist. A relevant employment background in the same industry before going self-employed strengthens these cases considerably.
Residential
“I am self-employed with one year of accounts and keep getting declined”
A number of lenders will consider a mortgage on one year of accounts or a single tax year, particularly where there is a relevant employment history in the same field. The variation between lenders on how self-employed income is calculated is enormous, which is where most declines come from.
An illustrative situation, not a client case study. It describes the kind of enquiry this market sees. Any figures are examples, not a quotation, and no credit check or lender decision is involved in reading this.
Sound familiar?
- You have been self-employed for one to two years
- The business is profitable but the trading history is short
- You worked in the same field as an employee beforehand
- Different lenders have quoted wildly different borrowing figures
The situation
Self-employed lending is not harder because self-employed people are riskier. It is harder because there is no single agreed definition of the income, and each lender picks a different one.
One lender uses salary plus dividends, another uses salary plus retained profit, a third averages two years while a fourth takes the latest year. For the same borrower those produce completely different answers, and a decline from one says almost nothing about the next.
Why the usual lenders say no
- Many mainstream lenders apply a blanket minimum of two or three years of accounts.
- Automated systems decline a short trading history before an underwriter reads anything.
- Where profit is retained in a limited company rather than drawn, many lenders ignore it entirely.
What usually works
02
Choosing the right income basis
If your company retains profit, lenders that use salary plus retained profit can produce a far larger figure than those using salary plus dividends. Matching the borrower to the basis is most of the work.
03
Getting the accountant involved early
An accountant’s certificate, and sometimes a projection, carries real weight. So does how the most recent accounts were prepared — aggressive tax efficiency reduces borrowing capacity.
04
Avoiding scattered applications
Multiple credit searches in a short period are themselves a negative. One well-matched application beats four hopeful ones.
Roughly how the numbers look
| Minimum trading history | Two to three years typically; one year with some lenders |
| Income basis | Salary plus dividends, or salary plus retained profit — varies by lender |
| Evidence | SA302s and tax year overviews, or company accounts |
| Effect of the basis | Can change the maximum loan substantially for the same borrower |
How your accountant prepares the accounts affects what you can borrow. If a purchase is planned, discuss it with them before the year end rather than after. These are examples to show the shape of a deal, not a quotation. Work out your own figures in the bridging calculator.
What we would need from you
- The last one to three years of accounts, or SA302s and tax year overviews
- Your accountant’s details and their qualification
- Three to six months of business and personal bank statements
- Evidence of employment in the same field before going self-employed
- Proof of deposit and its source
- Details of existing credit commitments
Things that catch people out
- A declining profit trend is treated far more harshly than a short history. Be ready to explain any dip.
- Drawing minimal dividends for tax efficiency reduces what most lenders will lend.
- Do not apply widely yourself. Let the case go to the right lender first time.
Questions we get asked
Can I get a mortgage with one year of accounts?
Yes, with a number of lenders, particularly where you worked in the same field as an employee before going self-employed. It is not the whole market, but it is a real and reasonably competitive part of it.
Do lenders use my salary and dividends or the company profit?
It depends entirely on the lender. Some use salary plus dividends, others salary plus your share of retained profit. For a director who leaves profit in the business the difference can be very large.
The product that usually fits
See how it worksEvery case is different. A specialist will confirm what actually fits yours.
Keep reading
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Browse them allAmram Finance Ltd is a credit broker, not a lender. We do not lend our own money and we do not approve or issue loan offers.
Your property may be repossessed if you do not keep up repayments on a loan secured on it. Some forms of bridging finance and buy-to-let lending are not regulated by the Financial Conduct Authority.