Needing Finance? Plan Ahead
With the banking review performed in March 2018 Lending rules have tightened. As part of this if any of you are considering applying for finance keep the below in mind:
- Finance applications are not being approved as quickly as they have been historically;
- Current financial information is required, this means current year tax returns and current year Financials;
- In some cases year to date Financials ie July18-November18 information have also been requested;
- Banks may ask us as Tax Agents to advise if all lodgements are up to date and to supply ATO portal reports to prove your ATO debt value;
- Copies of Business Activity Statements for the last 12 months are usually requested.
We as tax agents are also being asked to provide letters to confirm information. An example from last week
- We had advised that the 2018 Financials were not prepared so we supplied the Draft figures.
- Less than 24 hours later the bank then asked us to provide a letter that the year end Financials would not materially differ from the Draft figures.
We could not sign this letter as the 2018 Tax work had not even been supplied to our office.
- Luckily for the client in this case the bank was willing to accept 12 months of BAS’s (as lodged with the ATO) as together with the Draft Financials the income figures reconciled perfectly.
- This all happened within the space of 24 hours.
Tips:
- Have a good relationship with your Bank or a good Broker.
- Your credit report if good, will make you attractive to potential lenders, so make sure you pay all of your bills on time. www.creditsimple.com.au is one of many websites you can use to check your score.
- Keep your Tax Returns and Financials up to date.
- Be consistent with savings and paying your bills, it builds a solid history.
If you will be needing Finance approved in the future make sure you prepare for it. If you so need some help please feel free to give us a call on 5437 9990.