IN SHORT
- Income is verified with BAS, business bank statements or an accountant’s letter.
- Maximum LVRs are usually lower and rates slightly higher than full doc loans.
- Many self-employed borrowers can qualify for a full doc loan with the right lender.
Who low doc loans suit
- Business owners whose latest tax returns have not been lodged yet.
- Businesses whose income is growing faster than their last tax return shows.
- Recently restructured businesses, or people who have moved from employment to running their own business.
What lenders accept instead of tax returns
Depending on the lender, income can be verified with one or more of these.
- Business activity statements (BAS) for the last 6 to 12 months.
- Business bank statements showing regular income.
- A letter from your accountant confirming your income.
- A signed declaration of income, alongside other evidence.
Typical requirements
- ABN: usually held for at least 12 months, often with GST registration. Some lenders accept less.
- LVR: usually lower than full doc loans, commonly 60% to 80%.
- Rate: usually a little higher than a full doc loan.
Most low doc lending is offered by non-bank lenders, though some banks accept alternative documents in limited cases.
Check full doc options first
Some lenders accept one year of tax returns instead of two, or add back expenses such as depreciation, interest and one-off costs. With the right lender, many self-employed borrowers qualify for a standard loan at a lower rate.
This article is general information only and does not take into account your objectives, financial situation or needs. It is not credit, tax or financial advice. Lender criteria and government schemes change, so check current details and seek advice before acting.