Non-standard profiles
Mortgage for self-employed professionals: ensuring your financial statements are assessed at their true value
Line-by-line adjustment of the profit, double counting of the business loan, current account, SELARL, takeover: what increases your income taken into account.
For self-employed professionals, the bank takes into account neither the turnover nor the personal withdrawals: it starts from the taxable profit of the most recent financial years and adjusts it line by line, reintegrating items that do not represent a genuine outflow of cash and deducting items that will not recur. No legislation sets out this method: each bank applies its own criteria, and two assessments of the same set of accounts may differ.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- The bank takes into account neither the turnover nor the personal withdrawals, but a taxable profit adjusted line by line.
- Depreciation and exceptional expenses are reintegrated or deducted depending on whether they represent a genuine, recurring cash outflow.
- The business loan must not be counted twice, in the profit and then in the debt-to-income ratio: correcting this double counting can free up borrowing capacity.
- In a professional practice company, the personal income taken into account is the remuneration and dividends paid, not the profit of the entity.
- No legislation sets out the method for adjusting a balance sheet: each bank applies its own criteria, and two assessments of the same set of accounts may differ.
A self-employed application is won on a single figure: the income that the analyst retains after having reviewed your most recent financial statements. Know every addition and every deduction, and defend every line. Entry point: atypical profiles.
What does the bank do with your last two or three financial statements?
It reviews them line by line, then looks for a readable trend.
The number of financial statements required: self-employed individuals and young structures.
What income does the bank retain on a BNC or BIC?
The recurring and available income: the taxable profit, plus what does not actually leave the business, minus what will not come back.
The restatement of the profit, line by line
| Income statement line | Usual direction of the restatement | Why | What changes it |
|---|---|---|---|
| Taxable profit (net income) | Starting point | It is the declared and verifiable figure | Nothing: it is the base |
| Depreciation provisions | Added back, in whole or in part | It is not a cash outflow | Equipment renewed every year: not everything comes back |
| Exceptional expenses | Added back if non-recurring | A dispute, an accident, or a departure indemnity will not recur | Written proof of the exceptional nature |
| Exceptional income | Deducted | A capital gain on disposal or an indemnity inflates a financial year without saying anything about the activity | Nothing: they are almost always deducted |
| One-off grants and subsidies | Deducted | Same reason: they do not recur | A documented multi-year scheme |
| Voluntary pension or provident fund contributions | Often added back | It is a voluntary savings decision, not an operating expense | The mandatory nature of a scheme |
| Remuneration of the collaborating spouse | Left as an expense | It is a genuine expense, but it supports the same household | The presence of the spouse as a co-borrower |
| Rents paid to a civil company that you own | Neutralised or added back | The expense leaves the business but the income returns to the household | The actual ownership of the shares, and the treatment of the company's profit |
| Interest on business loans | Left as an expense | They finance the working tools | See below: the risk of double counting |
| Personal withdrawals by the operator | Ignored | Neither an expense nor income: it is a transfer | Nothing. Confusing them with remuneration is the most frequent error |
- Depreciation does not always come back: yes for computers, less so for a heavy technical platform.
- An exceptional income is seen immediately: explain it at the time of submission.
- The past standard of living passed as expenses illuminates your remaining disposable income.
Manager’s remuneration, dividends, current account of a partner
- Remuneration is the most favourably treated flow: the backbone.
- Dividends require several successive distributions: managers of SASU and EURL.
- The current account is not income. If you are a creditor, it can serve as a contribution; if you are a debtor, correct it before submission.
The double counting of a professional loan: recover your capacity
Its interest is already deducted from the profit, and then its instalment is counted again in the debt-to-income ratio.
La norme encadre le rapport entre charges de crédit et revenus. Elle ne dit rien de la façon dont le revenu d'un travailleur non salarié est reconstitué : c'est la politique de chaque établissement qui le fixe.
- En vigueur depuis le
- Source
- Décision D-HCSF-2021-7, art. 1er — Légifrance
Show this, supported by an amortisation schedule.
A final declining financial year
The bank then most often retains the final financial year, not the average. A decline without cause is a trend: attach a certificate from the chartered accountant and an interim statement.
Recent establishment or purchase of a practice: what does the bank look at?
What you have purchased, at what price, and what remains after the buy-back instalment. A buy-back is easier to defend than a new creation.
The bank starts from the accounts of the seller, applies a discount, and then deducts the instalment. What causes concern: an unjustified price, a professional loan that consumes all the capacity.
SELARL or SEL: Aligning the Two Levels of Income
The lender reviews the company accounts, then your personal income. The two must be consistent.
Regarding the profit retained within the structure? Present both levels. Pay attention to the share and the withdrawal rules, the personal guarantees already provided, and a holding company above. Real estate in a civil company: financing in a civil company.
Business Loan and Mortgage: In What Order to Prepare Them?
Together, never one hidden from the other: a business loan discovered during the processing resets everything.
- Dated and certain establishment: calculate the two together.
- Hypothetical establishment: the mortgage first, project announced.
- Business loan already in place: its schedule from the first meeting.
Compare the total cost, even when facing the bank of your firm.
What Documents to Gather for a Self-Employed Application?
- The signed tax returns, with the proof of electronic filing.
- The corresponding tax notices.
- An interim statement if the year-end is recent.
- The amortisation schedule for each business loan.
- The compliance certificates and those from your pension fund.
- The articles of association, the minutes of allocation and the shareholders' agreement.
- The practice contract and the professional lease.
- The statements of the professional account.
- A certificate from the chartered accountant regarding the current financial year: the one that unblocks the most applications.
The common documents: the loan application file.
Why do two banks not read your financial statement in the same way?
The regulations do not specify how to reconstruct the income of a self-employed person: each bank has its own grid.
The competition therefore concerns the figure retained. A single application deprives you of this margin: the income retained by the bank, why two banks respond differently, the specialised lenders.
Six checks before the application
- The tax return, tax assessment and statements are consistent.
- A decrease is explained before the question is raised.
- The dual account is neutralised, with a table in the file.
- The overdraft is settled.
- The disposable income is real, including household expenses.
- The upcoming professional commitments are known.
Healthcare professional? The article dedicated to doctors. Then the formula for the instalment.
Tax returns in hand? Create your file or have your financial statement assessed against the grid by telephone.
Sources
Read next
- Mortgage in Lyon: frequently asked questions
- Mortgage for doctors: resident, locum, self-employed or partner, building the right application Resident, locum, newly self-employed or partner in a practice: what the lender requires at each career stage, and how to present a strong application.
- Mortgage for self-employed professionals or micro-entrepreneurs: two or three financial statements to borrow? Years in business, micro-business deduction, salary or dividends, irregular income: what the bank actually considers, and how to prepare your file.
- Company director or manager: making your income legible for a mortgage Company director: the lender reviews your personal file and the company’s. The documents that make your income legible, and the commitments to declare.
- Financing a purchase through an SCI, under IR or IS: what the bank truly requires Mortgage through an SCI: partners’ joint guarantee, debt-to-income ratio, current-account contribution, security. What secures the deal, under IR or IS.
All articles on this topic: Non-standard profiles
Passer au calcul : Borrowing capacity