Most business owners I work with have already had this conversation twice. Good business, real deposit, and a lender who keeps asking for the same three documents in a slightly different order. Nobody has told them what the actual problem is.
It’s usually not the income. It’s that your income is spread across a company, sometimes a trust, and a personal return, and the person assessing it has a policy manual and about forty minutes. If the file doesn’t make the income obvious, nobody goes hunting for it.
My job is to make it obvious. Before anything goes to a lender you’ll have the income figure I’m using, where each number came from, and the policy I’m relying on.
What usually brings someone to this page
- You’d rather buy the premises than renew the lease, and you’re not sure whether to borrow personally, through the company or through a trust.
- You need working capital for stock, equipment, or a hire who starts six months before the cash shows up.
- Someone has told you your last financial year “doesn’t read well” and hasn’t said which line did it.
- You’re refinancing a facility that was set up when the business was half this size.
- You’ve been asked for a director’s guarantee and you want to know what you’re signing before you sign it.
What a lender is actually looking at
None of this is secret. It’s just rarely written down for the person it’s being applied to.
- Two years of numbers, read together
- Company financial statements, company tax returns and your personal returns, side by side. An assessor reads for the trend, and for whether the three agree with each other. A one-off dip is usually survivable. It just has to be explained in the file before anyone has to ask.
- Add-backs, and whether they’ll be accepted
- Depreciation, one-off expenses, non-cash items, super above the minimum, interest on debt you’re refinancing. Some lenders take these. Some want a letter from your accountant first, and some won’t have them at all. Which lender suits your file often comes down to that one question.
- Your ATO position
- Any payment arrangement, anything lodged late. It’s the most common reason a business file stalls right at the end, and it’s almost always fixable if we deal with it at the start.
- Business bank statements
- Usually six to twelve months of them. They’re looking for dishonours, for the shape of a normal month, and for whether the trading in your accounts matches the money that actually moved.
- Security and structure
- What the loan sits against, and whose name is on it. The tax and asset-protection side of that belongs to your accountant, not to me. What I can do is tell you what each structure does to your borrowing capacity, so you walk into that conversation with real numbers.
What I’ll ask you for
- Two years of company financial statements and tax returns
- Two years of personal tax returns and notices of assessment
- Business transaction account statements, usually six to twelve months
- A current ATO integrated client account, or a copy of any payment arrangement
- A short note on anything you’d explain to me in person: a bad year, a one-off cost, a client you lost
What you get back from me
- The income figure I’m using and exactly how I got there, in writing, before anything goes in anywhere.
- The lenders I considered, the ones I ruled out, and the policy point that ruled each one out.
- The one I’d take your file to, and why. In writing, so you can send it to your accountant and let them argue with it.
- A plain list of what the lender will ask for, in the order they’ll ask, so the file goes in complete.
- What I’m paid on this file and by whom, before you commit to anything.
Questions worth asking any broker
Including me. If you’re comparing brokers, these five separate a file somebody has read from a file somebody has forwarded.
- Which lenders did you rule out for my file, and on what policy point?
- What income figure are you using, and can I see the calculation?
- Have you checked my ATO position before we submit, or are we finding out afterwards?
- Who pays you on this loan, and does the amount change depending on which lender I end up with?
- If this gets declined, what’s the second option, and does going to the first one first cost me anything?
If you’ve been given an answer without a reason, that’s the thing to fix first. Send me the file and I’ll tell you what I see in it, before either of us talks about applying.
A 30-minute call, no fee and no obligation. Commercial and specialist files may attract a fee, and I’ll tell you before any work starts.