Business loans with accountant-prepared financials: what they unlock

“Full financials” is a phrase you’ll hear early in many loan conversations. It means a set of financial statements prepared by your accountant for each completed financial year — the formal record behind your tax return. Having them ready, current and consistent with your other documents opens more lending options and makes assessment smoother. This page explains what they contain, what lenders read in them and which loans they unlock.

What accountant-prepared financials include

A typical small business set includes:

• Profit and loss statement — sales, costs, gross and net profit for the year
• Balance sheet — assets, liabilities and equity at year end
• Notes — accounting policies and details of items such as loans, related parties and depreciation
• Compilation report — the accountant’s statement on how the financials were prepared

Business.gov.au lists financial reports among the documents lenders may ask for, along with ID, forecasts and personal financial information.

What lenders read in them

Section	What the lender is checking
P&L — sales	Size and trend of the business
P&L — gross margin	Pricing power and cost control
P&L — net profit	Capacity to service new debt
Balance sheet — current assets and liabilities	Working capital position
Balance sheet — loans	Existing debts and who they’re owed to
Balance sheet — director and related-party loans	Money moving between owners and business
Balance sheet — equity	Whether the business has a positive net position
Notes	Anything unusual — one-offs, policy changes

Our page on how the P&L links to servicing explains the profit side in more detail.

Which loans they unlock

Full financials are most often required for:

• Larger unsecured term loans — where servicing is assessed carefully
• Many property-secured facilities — especially longer-term or larger ones
• Refinancing existing debt — to show the business can carry the new structure
• Bank lending — banks typically want full financials as standard

They’re less critical for smaller unsecured cash flow loans (often assessed on bank statements and BAS) and for some low-documentation secured products (which may accept an accountant’s letter instead).

Pairing financials with other documents

Financials are strongest alongside:

• Tax returns and notices of assessment — confirming what was lodged and processed (how lenders use them)
• Year-to-date management accounts — showing current trading (format guide)
• BAS — confirming turnover period by period
• Bank statements — confirming cash actually flows as described

Lenders cross-check these. Sales in the financials should broadly reconcile with BAS; profit in the financials should match the tax return; loans on the balance sheet should match lender statements. Differences aren’t fatal, but they need explaining.

Keeping financials current

The ATO requires most business records to be kept for five years, so historical financials should always be available. The challenge is usually currency. If your last completed year ended more than about nine months ago, expect a lender to ask for year-to-date figures. If the latest year’s financials aren’t finished, our guide to interim financials before the tax return explains how to bridge the gap.

Add-backs and notes from your accountant

Your accountant can make the financials far easier to read with a short covering note:

• Depreciation and other non-cash items
• One-off costs that won’t recur
• Interest on debt being refinanced
• Owner costs run through the business
• Any structural change during the year

Listed separately, these help a lender calculate adjusted profit fairly.

Group structures

If your business operates through several entities — say, a trading company, a trust that owns equipment and a property-holding entity — provide financials for each relevant entity and a one-page diagram showing ownership and inter-entity loans. See company and trust documents for what else lenders typically ask.

Red flags lenders notice in financials

Some items in a set of financials prompt questions almost every time. Knowing them in advance lets your accountant explain before being asked:

• Negative equity — liabilities exceed assets. Often caused by past losses or large drawings; explain the cause and current direction.
• Large director loan accounts — money owed to or by directors. Lenders want to know whether it’s repayable on demand and whether it will be subordinated to the new loan.
• ATO liabilities on the balance sheet — check they match the ATO account statement and note any plan.
• Big movements in stock or debtors — can signal growth, or a build-up of slow-moving items.
• Related-party transactions — rent paid to a related trust, management fees between entities; explain what they are.
• Changes in accounting policy — any change that makes the years harder to compare.

None of these automatically counts against you. Unexplained, they slow the file and make lenders cautious.

Compiled, reviewed or audited?

Most small businesses have compiled financials — prepared by the accountant from the business’s records without independent verification. Lenders generally accept these for small business lending. Some larger facilities, or certain lenders, may ask for reviewed or audited financials, which involve more independent testing and cost more to prepare. It’s worth asking early which the lender expects, so your accountant can plan the work and quote for it.

An illustrative example

A hypothetical engineering services company wants a $400,000 unsecured term loan to fund a contract expansion. Its accountant sends compiled financials for two years, both tax returns and NOAs, a year-to-date P&L and balance sheet, and a one-page note listing depreciation and a one-off legal cost as add-backs and explaining a director loan account. Sales in the financials reconcile with BAS, and loans on the balance sheet match lender statements. The lender can assess servicing quickly because nothing needs chasing. The scenario is illustrative.

Put your financials in front of the right lender

Up-to-date, accountant-prepared financials make your business easier to lend to. Start a 60-second enquiry and mention that full financials are available. We don’t run a credit check when you enquire, your details are matched to one suitable lender instead of being shared around, and a real specialist will call you — and your accountant, if you’d like. Accurate answers on the form help us pick the right lender first time. See what your financials could support.