What is an accountant's letter for a low doc loan, and is it still accepted?

Lenders have their own template or minimum wording. Typically the accountant confirms their qualification and membership body, how long they have acted for you, the trading entity and ABN, that the business is trading and solvent, and that the income you have declared on the application is consistent with the records they have seen for a stated period. Some lenders require the accountant to state the actual figure; others accept confirmation of the borrower's declaration. Wording that hedges, such as "to the best of my knowledge", is often rejected.

A member of CPA Australia, Chartered Accountants Australia and New Zealand, or the Institute of Public Accountants, holding a current practising certificate, who is independent of the borrower. A bookkeeper, a BAS agent without accounting membership, or a family member who happens to be an accountant will not be accepted. Lenders may call the accountant to verify the letter.

Old low doc lending let borrowers state an income and have it rubber stamped. That produced loans that could not be repaid, and lenders now have obligations to verify income properly. The accountant's letter still has a place as corroboration, but lenders want something that comes from an independent source such as the ATO's BAS system or the bank's own statements. A specialist will tell you which lenders still lean on the letter and which treat it as supporting only.

It is most useful when the last tax return is not yet lodged and the BAS shows a business in growth, when there are large one-off items in the accounts that need explaining, or when the accountant can confirm a figure the BAS understates because of timing. It is least useful for a business with no BAS history at all, where lenders will ask why the accountant is comfortable and you will need bank statements anyway.