Can IT contractors get commercial loans? How lenders read income through a Pty Ltd, sole trader ABN or agency, and what cuts the figure.
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IT Contractors · Commercial Loans · Contract Income
Illustrative: a software contractor three years into rolling six-month contracts through his own company wants a warehouse unit for his side business. He sends the lender his invoices. The lender asks for the company's accounts instead. Here is why that happens, and what it means for what an IT contractor can borrow.
Quick Answer
IT contractors can get commercial and investment loans, and the lender reads the income of whichever structure holds the contract, so a company contractor is assessed on company and personal returns while an agency or sole trader contractor is assessed on contracts, invoices and BAS. What moves the figure: how long you have contracted, how many clients you rely on, whether profit sits in the company, and whether the personal services income rules apply to you.
Also called: IT contractor business loan, contractor commercial finance, tech contractor loan. All three describe the same lending; a contractor home loan is a different product, covered in our personal services income home loan insight.
Can IT contractors get commercial and investment loans?
IT contractors can get commercial and investment loans, and the type of loan matters less than how cleanly the lender can see a stable income behind it. Developers, architects, analysts and engineers who contract through an ABN or their own company borrow for the same things other business owners do.
- Business term loans for working capital, a second venture or a buy-in, usually through a business loan assessed on the trading entity.
- Commercial property such as an office suite, a warehouse unit or a strata shop, through a commercial property loan.
- Investment property, residential or commercial, held personally, in a company or in a trust.
- Equipment and fit out for a side business, where the asset itself often carries the security.
Car finance follows a different set of rules and is covered in our car finance guide for IT contractors. This insight stays with commercial and investment lending, where the question is almost always the same: which entity earns the money, and can the lender prove it will keep earning it.
How do commercial lenders read your income through a Pty Ltd, a sole trader ABN or an agency?
Commercial lenders read your income through the structure that holds the contract, because that entity is the one the client pays and the one whose records prove the income. The same day rate can produce three different income figures depending on whether it lands in your company, your personal ABN or an agency's payroll.
| Structure | Who earns the income | Documents usually asked for | What can reduce it |
|---|---|---|---|
| Own Pty Ltd | The company earns the contract fee and pays you a wage, director fees or dividends. | Company and personal tax returns, company financial statements, BAS and business bank statements. | Low wages drawn, a loss year, director loan balances, PSI attribution. |
| Sole trader ABN | You earn the fee directly and declare it as business income. | Personal tax returns with business schedules, BAS, invoices and current contract. | Heavy deductions that lower taxable income, a short ABN history, gaps between contracts. |
| Agency or labour hire | The agency pays you, sometimes as a contractor, sometimes through payroll. | Agency contract, remittances or payslips, and evidence of renewal. | Short terms, no renewal history, a recent move from one agency to another. |
The difference shows most in the company column. Company and personal returns, read together, are what most commercial lenders work from: the company's profit shows what the business earns, and your personal return shows what you have actually drawn from it. A contractor paid through an agency or a payroll company is read differently again, and our car finance post explains why being paid through an agency, a payroll company or your own Pty Ltd matters for that kind of lending. For a broader view of how lenders separate business income from personal income, see how a company structure changes the file.
Do retained profits in your company count toward a commercial loan?
Retained profits in your company can count toward a commercial loan, but only when the lender is assessing the company, either as the borrower or as a guarantor, and not as extra income in your own name. Retained profit is not your income until the lender says so, and most lenders only say so when the company is on the loan.
From the underwriter's seat, the question is who can repay. If the company borrows, its profit before tax, add-backs such as depreciation and interest, and the cash it holds all support the loan. If you borrow personally and the company sits outside the deal, a lender will usually count only what you drew as wages or dividends, because the company's money is not yours to repay with until it is paid out.
Personal services income adds a further layer. The ATO describes personal services income as income mainly, more than 50 per cent, from your personal skills or efforts, and it must be declared even where the PSI rules do not apply (ATO, read 21 October 2026). Where the rules do apply, that income is treated as yours rather than the company's, so the profit a lender expects to see retained in the company may not be there. Our personal services income glossary entry covers the mechanics, and whether the rules apply to you is a question for your accountant.
Lender counts
- Company profit when the company is the borrower or guarantor
- Wages and dividends shown on your personal return
- Add-backs the accountant can evidence, such as depreciation
- A contract history across more than one client
Lender discounts
- Company profit when only you are borrowing
- Profit tied up in a director loan account
- Income attributed to you under the PSI rules but not drawn
- A single year of figures after a structure change
The split above is a guide, not a policy, and it varies by lender. Money moved out of the company as a loan rather than a wage raises a separate set of questions, covered in our insight on directors loans and Division 7A.
Will a commercial lender annualise your day rate?
A commercial lender will rarely annualise your day rate, because contract-rate income policies are mostly a home loan feature and commercial credit teams usually want lodged figures. Multiplying a day rate by working weeks is a shortcut some residential lenders accept for established contractors; commercial lenders tend to read the returns and the financial statements instead.
Where a lender does consider current contract income, it commonly sets a minimum contract history, which varies by lender: evidence that you have been contracting in the same field for a period, a current contract with time left to run, and a renewal pattern. The trading history behind the ABN or company carries as much weight as the rate itself.
How residential lenders treat a day rate, and which contractors they accept it from, is covered in our PSI and home loans insight. For commercial lending, plan on the lender working from your last lodged year or two, and on a rate rise only counting once it appears in those figures.
How do IT contractors buy commercial or investment property through a company or trust?
IT contractors buy commercial or investment property through a company or trust by making that entity the borrower, with the directors or the trustee's directors giving personal guarantees and the lender testing serviceability across every related entity. The property entity often has little income of its own at the start, so the lender looks through it to the contracting company and to you.
- Pick the borrowing entity. A company, a trust with a corporate trustee, or you personally. Which one should hold the property is a question for your accountant.
- Expect guarantees. Each director usually signs a directors guarantee, and our directors guarantee guide explains what that commits you to.
- Show group serviceability. Rent from the property, profit from the contracting company and your personal income are combined, and existing debts across all entities are counted against them.
- Match the loan to the property. An owner occupied premises for a side business is read differently from a tenanted investment, and the steps from offer to settlement are set out in how commercial property loans work, including how much deposit to plan for.
Where this commonly trips contractors up is the gap between the entity that earns and the entity that borrows. If the company that holds your contracts is not the borrower or a guarantor, its profit may not be counted at all. A broker who sees the whole group can structure the serviceability case before the application, rather than after a lender has read it the wrong way. More options sit on our Property Lending Hub, and the types of loan available are explained under commercial property loan.
Why do lenders decline or cut commercial loans for IT contractors?
Lenders decline or cut commercial loans for IT contractors when the income looks less durable than the loan term, and the two things they weigh first are concentration and continuity. The common reasons are rarely about the rate you charge.
- One client. A single client paying most of the income reads as a single point of failure, even after years of renewals.
- Short or unrenewed contracts. A contract ending soon with no extension in writing weakens the forward case.
- Gaps. Breaks between contracts show up in bank statements and BAS, and lenders ask about them.
- A new ABN or company. A fresh entity after years in the trade can look like a new business unless the history is explained, and our ABN glossary entry covers how its age is read.
- Entity mismatch. Income in one entity, the loan in another, and no guarantee linking them.
Most of these are matching problems rather than credit problems, and the same file can be read very differently by a lender whose policy fits it. Our insight on why business loan declines are often a matching problem covers that in more depth, and the way lenders compare contractor and employee income is set out in our subcontractor versus employee income insight. If you want to know where your file sits before a lender sees it, check eligibility first.
IT contractors borrow for commercial and investment property on the strength of the structure that holds the contract. A company contractor is read on company and personal returns together, a sole trader on returns, BAS and contracts, and an agency contractor on the contract and its renewal history. Retained company profit helps only when the company is on the loan, day rates are rarely annualised for commercial lending, and single-client reliance or an entity mismatch cuts the figure more often than the rate does.
Key takeaway: put the entity that earns the income on the loan, as borrower or guarantor, and have your accountant confirm the PSI position before you apply.Frequently Asked Questions
IT contractors can get commercial loans, including business term loans and loans secured on commercial property, when the lender can see a stable income through the entity that holds the contract. A company contractor is usually assessed on company and personal returns together, and a sole trader on returns, BAS and current contracts. The business loans page covers the main options.
An IT contractor can get an investment loan for residential or commercial property, held personally or through a company or trust. The lender combines expected rent with the contractor's assessed income and tests repayments across every related entity. Options for commercial investment property are set out on the commercial property loans page.
IT contractors applying for a commercial loan usually need tax returns for every entity involved, company financial statements, recent BAS, business bank statements and a copy of the current contract. Agency contractors also provide remittances and evidence of renewals. Exact lists vary by lender and by loan size.
Relying on one client can affect a business loan, because lenders treat a single client paying most of the income as concentration risk. A long renewal record, a contract with time left to run and savings behind the business can offset it, depending on the lender. Our insight on business loan declines as a matching problem explains why a different lender may read the same file differently.
A Pty Ltd can borrow to buy a commercial property, with the company as borrower and its directors usually giving a directors guarantee. The lender assesses the company's profit, the rent or rent saved and the directors' own position together. Whether the company is the right owner for the property is a question for your accountant.
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