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In BC, what should I know about self-employed borrowers for car loans?
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Car Loan Glossary • bc

In BC, what should I know about self-employed borrowers for car loans?

For self-employed borrowers seeking a car loan in British Columbia, lenders require a more extensive financial history to accurately assess income stability and repayment capacity, differentiating from traditionally employed individuals. You will typically need to provide your T1 General Income Tax and Benefit Returns (for sole proprietors/partnerships) or T2 Corporation Income Tax Returns (for incorporated businesses), along with corresponding Notices of Assessment (NOAs) for the past two to three years. Lenders will also scrutinize both business and personal bank statements to verify consistent cash flow and profitability, as well as proof of business registration. Given the perceived variability of self-employment income, lenders often view these applications with higher risk, which, especially in the tighter credit market expected in 2025, can translate into higher interest rates, larger required down payments, or shorter loan terms. This detailed documentation allows lenders to mitigate their risk and helps you understand why preparing thoroughly with clear, consistent financial records and a strong credit history is essential to secure the most favourable financing terms available.

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