Aug 9, 2022

Applying for finance? Here we discuss how to prepare some of the documents you’ll require to successfully obtain business or personal finance. Incomplete finance applications will not be assessed by institutions. 

The supporting documentation you will require as a minimum are:

1. Income Tax Returns for you and any associated individuals and/or entities.  PDF copies or links to documents should not include your tax file number

2. Financial statements for you and any associated entity

3. Notice of Assessments

4. ATO – Income Tax Account history for the last 3 years

5. ATO – Integrated Client Account history for the last 3 years

6. If you are an office holder of any organisations, ASIC searches provide public information, you may need documentation to verify the assets and liabilities and business viability.

7. Accountants Letter

As a registered Tax Agent, we are exempt from licensing provision to the extent that we are providing statements and we are not providing an opinion on whether you can meet the repayments.  (For example, items 1 and 3 to 6 above).

By signing any letter, we are verifying to the financial regulatory that we have a clear and complete understanding of your financial circumstances.  As a member of a profession, we must ensure that we act in accordance with our member regulations and the National Consumer Credit Protection Act 2009 (National Credit Act).  

Our obligation is to verify the borrower’s ability to repay and service a loan. There are certain instances where an Accountant CAN NOT provide such letters, specifically a Capacity to Repay Certificate unless we hold an Australian Credit Licence (ACL).   We do not hold such a licence and as such are unable to provide verification of reports not prepared by our practice or for which figures cannot be externally verified.   

Such letters expose us to potential risk and as such the activity may not be covered by our public indemnity insurance – therefore we can only verify factual information, which is generally only historical information, not predications or projections.

We must undertake rigorous enquiries about your personal and financial circumstances, failure to do so could result in a break of APEA 110 Code of Ethics for Professional Accountants and legal ramifications. 

8. Cashflow Projections

If you are a small business that has operated for more than 2 years, you might be able to provide future estimates to help support your claim of your income earning capacity.  Xero or other software can be used as a basis for these types of reports.   Unless we prepare this for you, as an Accounting engagement we can not sign off on these reports.

9. Bank Statements

When you are applying for finance with one institution, you will need to provide all other institutions information. Ensure you hide bank account numbers and other personal information to protect your privacy.

10. Identification

Passport, Drivers Licences, Medicare Card or Student Identification card.  Where possible you should protect your personal data.  Many institutions will have an electronic identification process. 

11. Business Activity Statements

If you are a business, you will have to lodge either quarterly or monthly Business Activity Statements (BAS).  Copies of the lodged activity statements will help verify your regular income if providing at least the last 2 years.

12. Statement of Financial Position

Listing your assets and any liabilities secured against the assets, and personal liabilities including credit cards, store cards, short term finance or lending.

13. Business Plan

If your seeking finance to commence a business, you might be asked to submit a business plan outlining what your business is, how you plan to make money, and what your projected expenses will include.

14. Trust Deeds/Legal Deeds

If your business structure includes a Trust, a signed and/or certified copy of the Trust deed might be requested.       A common issue here is that a signed copy might not be easily located or recovered.  Be especially careful with the legal entity that is obtaining the finance, as it could be the Trustee or a Trustee company as its unlikely to be the Trust that has the loan obligation.