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Business-for-self (BFS) describes a borrower who is self-employed or owns a controlling interest in their business, and whose qualifying income is typically established from Notices of Assessment and financial statements rather than an employer pay stub.
There is no employer to issue a letter of employment, so a BFS borrower’s income is verified through Notices of Assessment, T1 Generals, and financial statements, generally averaged over more than one year to establish a reliable pattern rather than relying on a single strong year.
BFS borrowers may use add-backs to adjust their reported net income upward, or in some cases move to a stated-income program at a B lender or other alternative lender, depending on how well the file can be documented.
Two-plus years typical: lenders generally want two or more years of self-employment history and NOAs to establish an income pattern.
No employer letter: NOAs and financial statements carry more weight in verifying income since a letter of employment isn’t available.
Add-backs may apply: non-cash or one-time expenses can be added back to the reported net income figure, subject to lender discretion.
Alternative-lending overlap: borrowers who don’t fit a mainstream lender’s BFS documentation requirements sometimes move to B lenders or stated-income programs.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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