Most rejections come down to how lenders read your income. They usually rely on your last one or two years of tax returns and notices of assessment — so if your accountant minimised taxable income, lenders see a smaller borrower. Short ABN history, tax debts and unclear financials are the other common causes. Specialist and alt-doc lenders exist, usually at higher rates.
What it depends on
The full answer depends on your specific circumstances. Here’s what matters.
Your taxable income
Lenders may add back some items (such as depreciation or one-off expenses), but policies differ. Low taxable income is the single biggest cause of reduced borrowing capacity.
Trading history
Many lenders want two years of ABN and GST history; some accept one. Changes of structure can reset the clock with some lenders.
Tax and credit position
Outstanding ATO debt, unlodged returns or credit defaults are red flags. Payment arrangements with the ATO are viewed better than unmanaged debt.
The last 10%
What a qualified professional can add
The answer above covers the general position. Here’s where professional judgement — applied to YOUR specific situation — makes the difference.
- Matching your income profile to lenders whose policy suits it, before applying
- Avoiding multiple credit enquiries that damage your file
- Coordinating with your accountant on timing of tax returns and add-backs
Questions to ask before you engage one
If you decide to engage a professional, these questions help you evaluate whether they’re right for your situation.
Which lenders accept one year of financials, and at what cost?
What add-backs will this lender allow on my returns?
How many credit enquiries will this process create?
Should I lodge my latest return before applying?
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General Advice Warning
The information on this page is general in nature and does not take into account your personal objectives, financial situation or needs. It is provided by Global Mutual Funds Pty Ltd (ABN 20 090 555 436, AFSL 222640) and should not be relied upon as a substitute for professional advice. Consider whether the information is appropriate before acting on it. Read our Financial Services Guide.