Why self-employed borrowers deserve another look
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Brokers think they know the self-employed client, but do they really? The segment is larger and more financially stable than many realise
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ASK A broker what a self-employed application looks like and you’ll likely still hear words like complicated, risky or paperwork-heavy. That reputation has not kept pace with reality.
“The biggest misconception is that self-employed borrowers are automatically more complex and harder to get approvals for,” says Aaron Taylor, head of sales strategy and performance at Bluestone Home Loans.
“While every self-employed application requires an understanding of the customer’s business and income structure, many borrowers are financially strong and can be assessed efficiently when the right lending solution is applied,” says Taylor.
Bluestone Home Loans has been helping brokers find a way forward for over 25 years. As one of Australia’s leading non-bank lenders, we specialise in supporting self-employed clients, those with complex income and borrowers who might not fit the traditional mould. We look beyond the obvious, working closely with brokers to uncover solutions that help more clients move forward. Our approach is simple, flexible and built on strong relationships. It’s about backing your expertise with a team that’s ready to dig deeper, move faster and help you grow. Helping you turn more scenarios into settled deals is a Bluestone thing.
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“The self-employed segment has evolved significantly and is now a much larger and more mainstream part of the lending market than it was even a few years ago”
Aaron Taylor, Bluestone Home Loans
A tradesperson invoicing through an ABN, a marketing consultant running a side business on weekends and a rideshare driver topping up a PAYG salary have little in common on paper, yet all three now sit under the same broad label of self-employed borrower.
Even labelling the self-employed as niche doesn’t really stack up. ABS figures for August 2025 show 1.1 million independent contractors, or 7.6% of all employed, a figure that has circulated widely, but that only tells part of the story. A further 1.05 million people are classified as other business operators, showing that a much larger group is working outside a standard employee arrangement.
“The self-employed segment has evolved significantly and is now a much larger and more mainstream part of the lending market than it was even a few years ago,” says Taylor.
Bluestone is urging brokers to take another look at these people and realise their potential significance.
Self-employment not that rare
Behind the shift sits a change in how Australians choose to work in the first place. Side hustles, contracting and gig platforms have stopped being a stopgap and started looking more like a career path in their own right.
“One of the biggest drivers has been the changing nature of work. Every year, we’re seeing more Australians start their own businesses, launch side hustles or participate in the growing gig economy,” Taylor explains. “What was once considered an alternative career path has become increasingly common, creating a broader and more diverse pool of self-employed borrowers.”
Running a business has not become any simpler in the years since the pandemic, and that complexity has followed self-employed applicants straight into the loan application.
“Coming out of COVID, many businesses have faced rising operating costs, inflationary pressures and changes in the way the ATO manages tax obligations,” says Taylor. “As a result, we’ve seen a substantial increase in business and tax debt across the market, creating both challenges and opportunities for borrowers seeking finance solutions.”
The changing face of self-employment
Self-employment has an image straight out of the 1990s – young, casual and temporary. Think pocket money from mowing lawns or a market stall selling homemade candles.
But the granular detail is far more nuanced. The population of these groups is not spread evenly across the age range, and the pattern tells its own story about who brokers are likely to meet across the desk.
Among 15- to 19-year-olds, independent contractors make up just 0.8% of the employed cohort and other business operators comprise 0.2%. Both climb steadily with age: independent contractors reach 7.9% of employed 35- to 44-year-olds and other business operators 7.5%, rising to 8.5% and 9.5%, respectively, among 45- to 54-year-olds. Among those aged 65 and over who are still working, independent contractors make up 18.4% and other business operators constitute 21.6%. But the largest number in both groups sits in the 35 to 54 bracket, not the years after retirement.
Either way, self-employment tends to arrive later in a working life, after PAYG employment has built the savings, skills or client base needed to go out alone.
Household status tells a similar story about financial stability. Working married or partnered people show higher rates of self-employment in both categories, as 8.7% are independent contractors and 9.5% are other business operators, compared with national rates of 7.6% and 7.3%. Dependent students sit at just 1.6% for independent contractors and 0.1% for other business operators, while adult children who still live in the family home but are not full-time students rise to 3.5% and 2.1% respectively, a reminder that self-employment tends to follow financial independence rather than precede it.
The self-employed borrower a broker is most likely to encounter is not a young entrepreneur fresh out of study. It is someone in their forties or older, often partnered, with an established household and history built up over years rather than months. This is a group that understands money and is accustomed to making ends meet.
Tax debt creates an unexpected opportunity
That same maturity, an established business with years of trading behind it, often comes with accumulated liabilities as well as accumulated stability. While debt is unwelcome for the client, it can open a clear lane for brokers willing to work in it.
“One of the biggest opportunities is helping business owners consolidate existing debts, particularly tax debt accumulated over recent years,” says Taylor.
The clients carrying that debt are often in far better shape than the liability alone would suggest, which is exactly where a broker’s judgement adds the most value.
“Many self-employed borrowers are in strong positions from a cash flow and asset perspective but may be carrying business liabilities that impact their ability to grow or invest,” Taylor adds. “Brokers who understand lender appetite in this area can help clients simplify their finances and create a more sustainable long-term position.”
“Every year, we’re seeing more Australians start their own businesses, launch side hustles or participate in the growing gig economy”
Side hustles blur the lines with PAYG income
Debt consolidation is not the only growth area.
“We’re also seeing growing opportunities among borrowers who have established side businesses alongside their PAYG employment,” says Taylor. “Whether it’s consulting, contracting, e-commerce or other entrepreneurial ventures, many Australians are building meaningful secondary income streams that don’t always fit neatly within traditional lending assessments.”
Spotting that income early, before a client has even framed themselves as self-employed, is where a broker’s experience can outpace a standard checklist.
“For brokers, there is real value in identifying these opportunities early and understanding how different lenders can view and assess those income sources,” Taylor explains.
Documentation catches up with how business really works
Those blurred income streams are exactly why income verification itself is changing, too.
“We’re seeing increased awareness and adoption of alternative documentation, or Alt Doc, solutions across the broker market,” says Taylor. Tax returns and financial statements remain part of the picture, but on their own, they were never built to capture how a modern business actually runs.
“Historically, self-employed borrowers were often assessed primarily through tax returns and financial statements,” Taylor explains. “While those documents remain important, lenders like Bluestone are increasingly recognising that they don’t always tell the complete story of a business, particularly when business owners are reinvesting profits, managing seasonal income or operating under different business structures.”
That is exactly what is driving lenders to look further afield for a fuller picture of the business behind the numbers.
“As a result, more brokers are exploring alternative ways to verify income and demonstrate serviceability where appropriate,” says Taylor. “This evolution is being driven by the growing number of self-employed Australians and the need for lending assessments to better reflect how modern businesses operate.”
Who still struggles to get finance
None of this means every self-employed applicant now has an easy path to approval. Some groups will always face obstacles.
“Borrowers with short-term ABNs continue to face challenges in some parts of the market,” says Taylor.
A strong business today is no guarantee of an easy approval if there is not yet a track record to back it up.
“Even when a business is performing well, limited trading history can make it difficult for lenders to establish consistency and confidence around future income,” Taylor explains. “This is particularly relevant given the growing number of people transitioning into self-employment, consulting and gig economy roles.”
Debt remains the other sticking point, even for businesses that are otherwise sound.
“We’re also seeing challenges among business owners looking to consolidate significant business debt or tax debt,” says Taylor. “While these customers may have strong underlying businesses, the presence of outstanding liabilities can restrict lender options and require more specialised solutions.”
For Taylor, the answer is not to write these borrowers off but to look for a lender prepared to assess them properly.
“In many cases, it’s not that these borrowers are unsuitable,” says Taylor. “Rather, they require lenders like Bluestone, who can look beyond standard assessment criteria and understand the broader context of the customer’s financial position.”
Building the right team around the client
With a segment this varied, the brokers who do best are the ones prepared to ask more questions rather than fewer.
“The most important thing brokers can do is continue asking questions and taking the time to understand the client’s complete financial story,” says Taylor. Sometimes, there are more people involved than the client and the broker alone.
“Self-employed borrowers often have more moving parts than a standard PAYG customer,” Taylor explains. “Understanding how the business operates, where income is generated, what debts exist and what the client’s long-term goals are can make a significant difference to structuring the right solution. Brokers should look to build a collaborative relationship between themselves, the client and the client’s accountant. Accountants can provide valuable context around business performance, cash flow, tax obligations and future plans, helping brokers present a clearer and more complete picture to lenders.”
The lender’s own team has a part to play, too, particularly when a deal does not fit a standard template.
“It’s also critical for brokers to work closely with their lender BDMs and workshop deals early in the process,” says Taylor. “Having upfront conversations about policy interpretation, supporting documentation and potential challenges can help identify pathways that may not be immediately obvious.”
Brokers don’t have to reinvent how they work to cater to the self-employed better – it simply takes a willingness to look again at a segment that has quietly shifted and to bring in the right people to cut through the weeds that often hide strong applications.
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Published 28 Sep 2026
Aaron Taylor, Bluestone Home Loans
Self-employed and other business operators by age
Source: ABS Working arrangements data (Aug 2025)
6.4
36.2
199.5
264.3
235.7
127.1
90.1
138
1,097.4
15–19 years
20–24 years
25–34 years
35–44 years
45–54 years
55–59 years
60–64 years
65 years and over
Total
Independent Contractors (‘000)
Age Group
0.8%
2.7%
5.9%
7.9%
8.5%
11%
10.1%
18.4%
7.6%
Independent Contractors % of Age Group
1.3
14.9
138.9
249.9
263.4
111.5
107.9
161.8
1,049.6
Other Business Operators (‘000)
0.2%
1.1%
4.1%
7.5%
9.5%
9.6%
12.1%
21.6%
7.3%
Other Business Operators % of Age Group
806.3
1,357.9
3,358.3
3,329.4
2,761.5
1,157
892.4
750
14,412.6
Total Employed (‘000)
Source: ABS Working arrangements data (Aug 2025)
7.6%
7.3%
Proportion of overall working population
Independent contractors
Other business operators
Working married or partnered people more likely to be self-employed
8.7%
9.5%
Proportion of working married or partnered people