Low doc loans explained: BAS, accountant’s letter or bank statements?

Low doc (or alt doc) loans exist for borrowers whose income is real but whose tax returns are not ready, not recent, or not representative. Instead of full financials, you verify income another way. The three main methods are not interchangeable, and choosing the right one changes your approval odds and your rate.

Method 1: BAS (business activity statements)

Your last two to four quarters of BAS, lodged with the ATO, show your turnover. Lenders typically apply an industry margin to turnover to estimate income. Best for: businesses with clean, GST-registered revenue and healthy quarters. Strengths: hard ATO-lodged data reads as credible. Weakness: turnover is not profit, and margin assumptions can undercook a high-margin business.

Method 2: accountant’s declaration

Your accountant signs a letter declaring your income position. Best for: complex structures (companies, trusts, multiple entities) where an accountant’s whole-of-position view says more than any single document. Strengths: fast, and captures income the raw paperwork obscures. Weakness: lenders weigh it against the accountant’s standing, and some want it supported by another method anyway.

Method 3: business bank statements

Three to six months of business account statements showing actual cash flowing through. Best for: trades and services businesses with steady deposits. Strengths: shows the real pulse of the business right now. Weakness: lumpy months and personal expenses mixed through hurt the read.

How they differ in practice

• Many lenders want two of the three, and each lender prices differently by combination.
• Rates run above full doc, typically by 0.3 to 1%, falling as you verify more.
• LVRs usually cap at 80%, sometimes lower.
• The refinance path matters: alt doc is a bridge, and once returns catch up you move to full doc pricing.

Nathan matches your verification method to the lender that reads it best, which is the whole game in alt doc lending.