You walk into a bank, provide your pay stubs and a T4, check your credit, fill out the Personal Net Worth form, and you get Approved or Denied right away.
That’s the typical process for most people. Self-employed individuals face unique challenges as their finances, cash flow, and net worth are tied up in their business.
Is there a better way?
We are pleased to have guest contributor Kai Lu, an expert in private lending who runs Pulsar Enterprises. Our founder Kaz interviewed Kai to share his expertise and strategies for our Finalyze readers.
Finalyze Team: Tell us about your track record in helping self-employed individuals obtain financing.
Kai Lu: As a self-employed mortgage broker with incorporated businesses, I’ve successfully obtained residential mortgages using these programs. There are a number of options for self-employed professional mortgage available in the marketplace today.
The Self-Employed Professional Mortgage Challenge
One benefit of being self-employed is tax flexibility. Business owners commonly pay themselves dividends or salaries rather than claiming all income personally, avoiding higher tax rates and deferring taxes. Corporate tax rates are generally lower than personal tax rates for small businesses.
Finalyze: What are some popular strategies used to help self-employed business owners qualify for mortgages?
Kai Lu: As of September 2025, here are two examples of popular self-employed professional mortgage programs:
1. Self Employed Professional Mortgage: Stated Income with A Lenders
How It Works: Mortgage brokers STATE your income on applications, even when you haven’t declared that amount personally.
Example: Joe’s corporation earns $200,000 gross revenue. After tax planning, he declares $105,000 personal income. Corporate expenses are $25,000.
On his mortgage application, we can state $175,000 personal income ($200,000 – $25,000), though he only declared $105,000 in salaries. The rationale: Joe clearly can earn $175,000 – he declared less for tax deferral planning.
Surprising Fact: A lender can approve stated income applications, even for insured mortgages (where the downpayment is less than 20%).
Requirements:
- Compilation financial statements with profitable financials and strong retained earnings
- 720+ credit score with perfect payment history
- Down payment from your own sources
- Liquid investments are a bonus
Reality Check: Expect significant resistance and questions, especially for insured mortgages. Both banks and insurers scrutinize these applications heavily. Approval rates aren’t high, which is why many don’t know that major lenders accept stated income.
2. Self Employed Mortgage with B Lenders
When A lenders decline, B lenders offer much higher approval rates. B lenders typically allow using business financials OR 6-12 months of bank statements as stated income.
Bank Statement Example: 6 months of activity shows $120,000 in revenue, $10,000 expenses at a $110,000 net profit. Annualized income becomes $220,000.
Advantages:
- No Compilation Financial Statements required
- 30 to 35 year loan amortization available making your payments lower
Costs:
- Interest rates are typically 1-1.5% higher than A lenders (spread)
- Typically a 1% lender fee
- Broker fees can apply
Bottom Line: Despite higher rates, longer amortization keeps monthly payments comparable to A lender mortgages. Total interest is higher, but you can refinance to A lenders when your situation improves.
Remember: You don’t need to plan 25-35 years ahead – focus on your current 1-5 year term.
Interested in your financing options?
Reach out to our team at Finalyze to explore how we can help you get your finances in order to improve your chances of mortgage approval. We have an extensive network of capital providers who can help you navigate your situation including Kai Lu from Pulsar Enterprises. Be sure to book a complimentary consultation here.
About Kai Lu
In 2012, Kai Lu became a young landlord after his parents sold their business and bought him a property in China. After immigrating to Canada in 2014, Kai tried different ways of investing, being a landlord, flipping, private lending, stocks & bonds. He now focuses on real estate investments, namely private lending and commercial real estate. When you cannot see Kai in the office, you can likely find him on a jobsite, wearing a hard hat and green tag boots. Outside work, Kai likes to golf (although not very good at it) and he enjoys travelling, seeing friends and trying new foods.
This article was created in collaboration with Finalyze.