Yes. Private lenders assess the property and your equity rather than your notice of assessment, so business-for-self borrowers who write down income can often qualify where a bank declines. It is short-term, higher-cost borrowing, and it only makes sense if you have a realistic route back to an A-lender.
Why banks decline self-employed borrowers who are doing well
The problem is not that you earn too little. It is that your tax return is designed to show you earned as little as legally possible. Deducting aggressively is sound tax planning and terrible mortgage evidence, and the two goals pull against each other every year.
A-lenders qualify you on line 15000 of your return, or on a two-year average of it. If your business nets well but your declared income is modest, a conventional adjudicator sees the modest number and stops there.
How a private lender looks at the same file
Differently, and more simply. A private lender is asking three questions: how much is the property worth, how much equity sits behind the loan, and is the property marketable if things go wrong. Your income matters mostly as evidence you can service the payment.
That is why these files can close in days rather than weeks, and also why they cost more. You are paying for speed and for a lender willing to take property risk instead of income risk.
What it costs, honestly
More than a bank, in more places than the rate. Expect an interest rate well above conventional pricing, a lender fee and usually a broker fee each as a percentage of the loan, both sides’ legal fees, and an appraisal. Ask for the all-in cost in dollars over the actual term, not just the rate.
The exit is the whole point
A private mortgage for a self-employed borrower is a bridge to a documented tax year. The plan is usually: take the loan, file a return that supports conventional qualifying, then refinance to an A-lender. Start that conversation at month six of a twelve-month term.
If you have no plan to change what your return shows, you do not have an exit, and a private mortgage will not fix anything. We will tell you that directly.
What to do next
Before considering private, exhaust the alternatives. Some lenders accept business-for-self income with bank statements or a stated-income approach, and B-lenders sit between the banks and the private market. A good broker checks those first.
Read the full guide for your province: Private Mortgage Lending in Ontario or Private Mortgage Lending in Alberta. Also worth reading: how to get a mortgage when you write off most of your income, which covers the conventional routes first.
Typical ranges for rates, lender fees, broker fees, loan-to-value, and term are set out in full in the Ontario guide and the Alberta guide. Every figure varies by file and none of them is a quote.
Frequently asked questions
Do private lenders need my tax returns?
Usually they will ask, but the decision rests on the property and your equity. Some will proceed with limited income documentation where a bank could not.
How long can I stay in a private mortgage?
Terms are short, commonly around twelve months. Staying longer means repeated renewal fees, which is why the exit plan matters more than the rate.
Will this hurt my credit?
Not inherently. Paying it on time builds exactly the clean history an A-lender wants to see later. Missing payments does the opposite and removes your best evidence.
Is a B-lender better than private?
Usually, if you qualify. B-lenders price between banks and private lenders and often accept self-employed income structures banks will not. Ask your broker to try that tier first.
