Sole traders: net profit
If you are a sole trader, lenders work from your net profit as it appears on your tax calculations, not your turnover and not what you drew out of the business.
Most want two years. Some average the two, some use the most recent year. If your profit is growing, that difference alone can change what you can borrow considerably, and it is decided entirely by which lender you approach.
Company directors: salary and dividends, or something better
The common approach for a limited company director is salary plus dividends. It is simple, and it works badly for anyone who deliberately leaves money in the business.
A smaller group of lenders will instead use your share of the company's net profit, before or after corporation tax depending on the lender. If you draw a modest salary and small dividends while the company is profitable, this can transform what is available to you. It is one of the clearest examples of a broker earning their keep.
Contractors: the day rate
If you contract on a day rate, many lenders will ignore your accounts entirely and work from the rate itself, typically the day rate times five days times somewhere in the region of 46 weeks.
That is frequently far more generous than the accounts route, and plenty of contractors never find out because the first lender they asked did not offer it.
A bad year is not the end of it
If your latest year is down on the one before, some lenders will average, some will use the latest figure, and some will listen to an explanation for a one-off cost or a deliberate investment in the business.
The important thing is to explain it up front rather than letting an underwriter discover it and draw their own conclusion. A short covering note with the application prevents a good number of declines.
What to have ready
Two years of finalised accounts, your SA302 tax calculations and matching tax year overviews, and around three months of business and personal bank statements. If you have only one full year, say so rather than assuming it rules you out, because for some lenders it does not.