Quick answer · Q.B08
Not always. Many business loans can be assessed on recent business bank statements, BAS or property security rather than the latest tax returns. Banks and longer-term loans usually want returns and financials that are current. If your returns are behind, lenders will want to know the true tax position — often through an accountant's letter or estimate — and to see a plan to catch up.
Key points
- Unsecured and property-secured lenders can often work from bank statements or equity instead of recent returns.
- Banks and long-term facilities usually require current returns and financials.
- Overdue lodgements must still be disclosed; an accountant's letter often bridges the gap.
- Catching up BAS first often matters more than catching up every return at once.
- Quarterly BAS due
- 28 Oct, 28 Feb, 28 Apr, 28 Jul
- Monthly BAS due
- 21st of the next month
- Our approach
- Case by case
Why do some lenders need tax returns and others don’t?
It comes down to how each lender measures your ability to repay.
- Banks and long-term facilities generally test serviceability using profit from tax returns and financial statements. Without recent returns, they can’t run their test.
- Unsecured and cash-flow lenders often measure turnover and conduct directly from recent bank statements, sometimes backed by BAS.
- Property-secured lenders focus heavily on the property’s equity and the exit plan, so they may need less income documentation.
That’s why a business with overdue returns can be declined by a bank and approved elsewhere in the same month. It’s not that the rules are looser; the measuring stick is different.
What can be used instead of recent tax returns?
| Alternative evidence | What it shows |
|---|---|
| 6–12 months of business bank statements | Actual turnover, conduct, existing repayments |
| Recent BAS | Quarterly turnover and GST reporting |
| Management accounts | Year-to-date profit and loss and balance sheet |
| Accountant’s letter | Confirms income, position and lodgement plan |
| ATO statement of account | The true tax balance, including any debt |
| Property documents | Equity, for property-secured loans |
Not every lender accepts every item. The right mix depends on the amount, term and route — see what documents you need.
What does “low doc” actually mean?
“Low doc” is a loose industry term for loans that need fewer financial documents. In practice it usually means the lender relies on bank statements, BAS or a declaration of income rather than full returns. It isn’t “no doc” — you’ll still provide ID and business details, and the lender will still check that the loan makes sense.
Low doc can be a sensible bridge while lodgements are being caught up. It’s not a way around disclosure: lenders still want the real picture.
I’m behind. What order should I catch up in?
If lodgements have slipped, a clear order helps both the ATO and any lender:
- Talk to your accountant about the full list of what’s outstanding.
- Lodge overdue BAS first, starting with the most recent quarters. BAS is the evidence many lenders read alongside statements.
- Prepare management accounts for the current year, so you can show where things stand today.
- Work through overdue income tax returns, oldest to newest or as your accountant advises.
- Get an estimate of any tax that will be payable once everything’s lodged.
Step five matters. If catching up will reveal a debt, it’s better to know now and include it in your plans. Our page on ATO debt and business loans covers how lenders view it.
Can I borrow while I’m catching up?
Often, yes. What makes it work:
- Transparency. State what’s overdue and your plan to lodge it.
- An accountant’s letter, if possible, confirming the position and timeline.
- Clean recent bank statements showing the business is trading well.
- Security, if the amount or history calls for it.
If you’re unsure whether your situation is workable, send a short enquiry. There’s no credit check when you first enquire, and a real person will tell you honestly what’s realistic.
What are the BAS dates to plan around?
The ATO’s standard quarterly BAS due dates are:
| Quarter | Due |
|---|---|
| July – September | 28 October |
| October – December | 28 February |
| January – March | 28 April |
| April – June | 28 July |
Monthly lodgers have until the 21st of the next month. Businesses with a GST turnover of $20 million or more lodge monthly, as do those the ATO has directed to. Knowing these dates also helps you time an application — see when to apply for business finance.
Why do lodgements fall behind in the first place?
It helps to name the cause, because lenders will ask and because the fix depends on it. The most common reasons we see are ordinary ones:
- A busy period that pushed bookkeeping aside, then snowballed.
- A change of accountant, with records stuck in transition.
- Illness, a family matter or a natural disaster that took the owner away from the business for a while.
- Fear of what the numbers will show, especially if a tax bill is expected.
- Rapid growth, where the business outgrew a simple bookkeeping set-up.
None of these is unusual, and none of them rules out finance. What lenders want to see is that the cause has been dealt with — a new bookkeeper, a catch-up schedule agreed with the accountant, lodgements already moving. A single sentence explaining the cause and the fix, included with your enquiry, does a surprising amount of work. It turns an open question into a closed one.
What does a catch-up plan look like? (Illustrative example)
Illustrative only — invented business.
A Hobart builder hasn’t lodged income tax returns for two years after a period of family illness. BAS is current. The business needs $90,000 for materials on two new jobs.
- A bank declines because the last lodged return is three years old.
- A lender assessing twelve months of bank statements and current BAS can see steady turnover.
- The accountant provides a letter confirming both returns will be lodged within three months and estimating a modest tax bill.
- The loan is sized to include the estimated tax, so lodging doesn’t create a new problem.
Behind on lodgements? Let’s look at it together
Plenty of good businesses fall behind on paperwork. Asking what’s possible involves no credit check, your details go to one team instead of a list of lenders, and a real person works with what you have. Be upfront on the form about what’s overdue and roughly what you expect to owe — accurate answers get you matched correctly first time.
Frequently asked questions
What does 'low doc' mean for a business loan?
It generally means the lender relies on fewer financial documents — often bank statements, BAS or a declaration — instead of full tax returns and financial statements. Low doc isn't no doc: you still need ID, business details and usually some evidence of income.
Will a lender find out if my returns are overdue?
Very likely. Lenders often ask for an ATO statement or check lodgement status, and overdue lodgements tend to surface during assessment. Disclosing upfront avoids delays and awkward questions.
Can an accountant's letter replace tax returns?
Sometimes. An accountant's letter confirming the business's income and tax position can support an application while returns are being finalised. Lenders set their own requirements, so ask what they'll accept.
Do I need BAS up to date too?
It helps a lot. BAS is quarterly evidence of turnover and shows your GST reporting is current. The ATO's quarterly due dates are 28 October, 28 February, 28 April and 28 July.
Can a loan pay the tax that will be owed once I catch up?
It can be part of the plan. If catching up will reveal a tax bill, factoring that into the loan can be sensible. See our page on using a business loan to pay tax or BAS.