Notices of Assessment
Usually the last two years. The NOA is the CRA's summary of your return, and the income on it is where most lenders start.
For sole proprietors, incorporated owners, owner-operators and trades
Your business pays you. Here's how lenders read it.
When you work for yourself, a lender can't call your HR department. They read your tax returns and your business paperwork instead. Here's what they usually ask for, and why.
01What lenders look at
The paperwork lenders usually ask self-employed people for.
Your full T1 returns
With the Statement of Business or Professional Activities (T2125) if you're a sole proprietor. Lenders read revenue and expenses, not just the bottom line.
Proof the business exists
A business registration, articles of incorporation, or for owner-operators, your contract with the carrier you drive for.
Business bank statements
Often three to six months, so a lender can see money coming in steadily, not just once.
Taxes up to date
Some lenders ask for your CRA statement of account to show nothing is owing, or that a payment plan is on track.
Corporate financial statements
For incorporated owners: usually two years, prepared by your accountant, alongside your personal returns.
02Write-offs and income
A good year for your taxes can look like a slow year to a lender.
When you claim business expenses, your taxable income goes down, and that's the number many lenders start from. It doesn't mean you should claim less. That's a question for your accountant, and we send it to them.
What it does mean is that lenders read the same return in different ways. Some start from net income and add back costs that weren't cash out of your pocket, such as capital cost allowance on a truck or equipment. Some average two years, some take the lower one. Alternative lenders may look at deposits in your business account instead, often with a larger down payment.
General information only. Lender policies differ and change, and your accountant decides what you claim.
| Line | Amount |
|---|---|
| Revenue from hauling | $186,000 |
| Expenses claimed: fuel, repairs, insurance, truck CCA | −$141,000 |
| Net business income on the return | $45,000 |
| Of the expenses, CCA on the truck | $18,000 |
| Net income plus CCA, as some lenders read it | $63,000 |
Not every lender adds anything back. We tell you which ones do, and what each one asks for in return.
03Your checklist
What to start gathering, by how your business is set up.
Sole proprietors
- Two years of Notices of Assessment
- Two years of T1 returns, with the T2125
- Business registration or licence
- Business bank statements (three to six months)
- CRA statement of account
- Down payment statements (last 90 days)
- Government photo ID
Incorporated owners
- Two years of personal Notices of Assessment
- Two years of corporate financial statements
- Articles of incorporation
- T4 or T5 slips for what you pay yourself
- Corporate bank statements (three to six months)
- CRA statements, personal and corporate
- Down payment statements (last 90 days)
Owner-operators and trades: add your contract with the carrier or the general contractors you work for, and any truck or equipment lease. Don't have everything? Call anyway; the list above is where people finish, not where they start.
Tax or bookkeeping questions go to your accountant. Mortgage questions, bring them to us.