The income declaration in a low doc business loan: what it is and what backs it

An income declaration for a low doc business loan is a signed statement of what your business turns over and earns, given in place of tax returns. It doesn’t replace the evidence. A lender tests every figure on it against your lodged BAS, business bank statements, ATO records or an accountant’s letter, so a declaration only works when those sources agree with it.

That’s the part most owners don’t realise until a lender comes back with questions. The form looks like a shortcut: one page, a few boxes, a signature. In practice it’s the document every other piece of your file is measured against.

What is an income declaration, and why do low doc lenders use one?

A full doc business loan sizes your borrowing from two years of tax returns and financial statements. When those are missing or out of date, the lender still needs an income figure to work with. The self-declared income is that figure, and the declaration is your signed confirmation that it’s true.

It’s one of the three documents that define a low doc file. Our low doc business loans page covers the full set; the short version is that the declaration supplies the number, and BAS, statements or an accountant’s letter prove it.

Don’t confuse it with the business purpose declaration, which is a separate form that often sits in the same pack. The business purpose declaration confirms the money is for business use, which takes the loan outside consumer credit rules. The income declaration is about how much the business earns. Lenders want both, and they read them together.

What’s actually on the form?

Every lender uses its own wording, but most income declarations ask for some version of the same things:

Section	What you fill in	What the lender checks it against
Business details	Entity name, ABN, ACN if a company, start date	ABN Lookup, ASIC register, GST registration date
Gross turnover	Sales for the last 12 months or last financial year	BAS label G1, business bank deposits
Net income	Profit before tax, or the income you draw	Accountant’s letter, prior-year return or NOA if one exists
Tax position	Lodgements up to date or not, any ATO debt and payment plan	ATO account statement and lodgement history
Existing debts	Business loans, leases, cards, director loans	Credit file and bank statement repayments
Signature	Each borrower and guarantor, usually dated	Identity checks

Some lenders add a box for your accountant’s name and practice so they can confirm the figures directly. If that’s there, fill it in properly. A lender that can ring your accountant has one less reason to hesitate.

Which figure should you declare: turnover or net income?

This is where most declarations go wrong, and it’s usually a definition problem rather than dishonesty.

Gross turnover. Use the figure your BAS supports. G1 on your BAS is total sales including GST, as the ATO’s BAS guidance explains. If you add up four quarters of G1 and declare that, write “including GST” beside it. If you declare the ex-GST figure from your accounting software, say that instead. A lender who sees $440,000 on the declaration and $400,000 worth of deposits will assume something’s wrong until you explain that the $40,000 difference is GST.

Net income. This is the harder one, because there’s no BAS label for profit. Declare a figure your accountant would recognise: last year’s net profit if a return was lodged, or a year-to-date profit from reconciled software reports if not. If last year’s profit was depressed by depreciation or one-off costs, don’t quietly inflate the figure. Declare the true number and explain the add-backs separately (our page on when your tax return shows a loss covers how lenders treat them).

The rule of thumb: declare the number you could prove tomorrow if the lender asked, not the number you think the business will hit this year.

How does a lender test what you’ve declared?

A credit analyst reads the declaration as a set of claims and checks each one against something you didn’t write yourself.

1. BAS turnover. Four lodged quarters of G1 should roughly add up to your declared annual turnover. Our guide to reading your BAS like a lender shows what else they look at on each statement.
2. Bank deposits. Six to twelve months of business bank statements show whether the cash actually lands. Transfers between your own accounts, loan drawdowns and GST refunds get stripped out first.
3. ATO records. Your ATO account statement shows whether BAS was lodged on time and whether a debt is building. If you declared “no ATO debt” and the account statement says otherwise, the file usually stops there. See ATO records you can download.
4. The accountant’s letter. Where a lender asks for one, it confirms the income figure independently. A well-written accountant’s letter sticks to what the accountant can verify.
5. Plausibility. Does the income make sense for the industry, the business’s age and the size of the premises? A two-person café declaring $2 million in turnover will get questions whatever the BAS says.

Lenders are asking more of these questions than they used to, and there’s a reason. In April 2025 the Federal Court found that a business lender and its loan introducer could not simply rely on the business purpose declarations they’d collected, because they hadn’t made reasonable inquiries. The two companies were later ordered to pay penalties totalling $515,000. That case was about the purpose of the loan, not income, but the lesson has spread across low doc lending: a signature on a form is where the checking starts, not where it ends.

If you’re not sure which of these you can produce, our what can I use instead? checker maps your missing paperwork to what lenders accept. Once you know what you’ve got, check your options with a quick enquiry.

Which mismatches stop a low doc file?

Most declined declarations fail on one of a handful of patterns.

• Turnover above $75,000 with no GST registration. The ATO requires a business to register for GST once its turnover reaches $75,000. Declare more than that while unregistered and the lender sees either an overstated income or an unregistered GST liability. Neither helps.
• Declared turnover well above the BAS. Small differences from timing are normal. A declaration 30% higher than four quarters of G1 is not.
• Deposits that don’t support the figure. If the statements show half the declared turnover, the lender will size the loan on the statements, if it proceeds at all.
• “No tax debt” when there is one. An undisclosed ATO debt damages trust far more than the debt itself would have. Disclose it, and show the payment plan if you have one.
• Personal income counted twice. Declaring the business’s net profit and then adding your own drawings on top overstates what the business can service.

The fix for nearly all of these is the same: check the declaration against your own BAS, statements and ATO account before you sign, the way the lender will after.

Illustrative example: a declaration that matched on the second attempt

Illustrative only; not a real business.

A landscaping company’s 2025–26 return hasn’t been lodged yet, and the director wants $120,000 to buy a second truck and fund wages through spring. The first draft of the declaration shows turnover of $610,000, which is the figure the director remembers from the software dashboard.

Before signing, they line it up with the evidence:

• Four BAS quarters: G1 adds to $583,000, including GST.
• Twelve months of statements: customer deposits come to about $570,000 once transfers from the director’s personal account are removed.
• ATO account statement: all BAS lodged, a small payment plan on one quarter’s GST, up to date.

The $610,000 turns out to include quotes the software counted as invoices but which were never accepted. The director declares $583,000 including GST, discloses the payment plan, and asks the accountant to confirm net income in a one-page letter. Every number on the declaration now has a document behind it, and the analyst has nothing to reconcile except a sensible gap between G1 and deposits that the cash-at-hand jobs explain.

When is an income declaration not enough?

Be realistic about what a declaration can carry.

• Very new businesses with only one or two BAS lodged have little to test the figure against, so unsecured limits tend to be small. Our guide to proving income in your first year covers what helps.
• Larger amounts usually need security. Property-secured lending from $20,000 to $5,000,000 relies mainly on the equity, so the declared income matters less to the decision, though it still needs to be honest and repayments still need to be affordable.
• Unsecured lending is typically $5,000 to $500,000 and sized on turnover and bank statements, so the declared figure only helps if the statements back it.

If your evidence is thin and the need isn’t pressing, waiting one more BAS quarter can be the better move. It gives the declaration one more independent number to stand on.

Before you sign: a five-minute check

• Add up your last four BAS G1 figures and note whether you’re quoting turnover with or without GST.
• Compare that with business deposits over the same months.
• Open your ATO account and confirm the tax debt figure, if any.
• Make sure net income is a number your accountant would sign off on.
• Keep a copy of the declaration exactly as signed. The ATO expects business records to be kept for five years, and the lender will keep theirs too.

Ready to put your figures in front of the right lender?

A declaration that matches your BAS and statements is one of the simplest low doc files to place. We read these every day, and we know which lenders want an accountant’s letter beside it, which work mainly from statements and which care most about the property.

Starting is a 60-second enquiry, and asking the question doesn’t put a mark on your credit file, because there’s no credit check at that stage. Your details stay with our team rather than being handed to a queue of lenders, so your phone stays quiet. A real person reads what you’ve told us and calls you to talk through the numbers.

Please fill in the form the way you’d fill in the declaration: accurately. Use the turnover your BAS supports, say whether you own property, and tell us which paperwork is behind. That’s what lets us match you to a lender who’ll accept your evidence first time.

Let’s see what your numbers support →