Key Takeaways
- A commercial loan application is built around eight core categories: business financials, BAS, tax returns, leases, entity documents, security details, deposit, and purpose of funds.
- Most application delays come from missing or inconsistent documents, not from the credit policy itself.
- Lenders look for consistency across financials, BAS, and ATO records, so reconciliations matter as much as the individual numbers.
- Preparing the full pack upfront, before lodging anything, typically shortens settlement by weeks.
Why a Proper Checklist Matters Before You Apply
Commercial lenders assess applications in layers: the borrower, the business, the security, the transaction, and the wider financial position. Each layer has its own document requirements, and each one carries its own potential for delay. Borrowers who turn up with the full pack assembled, organised, and cross-checked usually find the assessment moves smoothly. Those who provide documents piece by piece often watch the file drift down the credit queue.
The other reason a structured checklist matters is consistency. Lenders compare numbers across tax returns, BAS, management accounts, and ATO portal statements. Any material gap or contradiction raises a question, and unanswered questions slow approvals. Preparing the documentation properly upfront removes most of these flashpoints before the credit team ever sees the file.
This guide sets out the full borrower checklist for a commercial loan application in Australia, what each document is used for, and how lenders weigh it. If you would prefer to walk through the requirements for your situation before assembling the pack, our Loanworx commercial lending specialists can confirm exactly what each lender expects.
Business Financial Statements
Business financials are the spine of any commercial loan application. They show whether the business is genuinely profitable, how earnings have trended, and how much surplus cash flow is available to service the loan after tax and owner drawings.
Profit and Loss Statements
Lenders typically request one to two years of profit and loss (P&L) statements. They are looking for consistent revenue, healthy gross margins, and a reasonable net profit after all costs. Year-on-year movements are reviewed for context: growth supports the application, while sharp declines usually require explanation.
Balance Sheets
One to two years of balance sheets show the underlying financial health of the business: working capital position, current assets versus liabilities, retained earnings, and related-party loans. A strong balance sheet supports a higher debt service coverage ratio (DSCR) and gives the lender confidence that the business can absorb short-term setbacks.
Year-to-Date Management Accounts
Lenders also want current-year-to-date management accounts prepared within the last 30 to 60 days. These show how the current year is tracking against prior years and against any forecast included in the application. Older management accounts often trigger an updated request, which delays the assessment.
Forecasts and Projections
For new ventures, business acquisitions, or major expansions, a forward-looking financial forecast is usually required. The forecast should align with historical performance, fund usage, and any included business plan. Lenders accept that forecasts are estimates, but they expect the assumptions behind them to be reasonable and defensible.
Business Activity Statements (BAS)
Business Activity Statements are one of the most powerful documents in a commercial application. They cross-check the financials and give lenders a recent, government-verified picture of the business’s trading position.
How Many Quarters to Provide
The standard request is the last four quarters of BAS, which represents a full trading year. For larger or specialised deals, lenders may ask for eight quarters. Lodgement should be up to date; missing or overdue BAS lodgements are a common reason for application delays.
What Lenders Check on BAS
Lenders compare BAS turnover with the revenue reported in the financials. They also check that GST collected matches what would be expected from reported sales, that PAYG withholding aligns with wages, and that BAS payments have been made on time. Consistency across these data points builds credibility.
BAS and the ATO Position
BAS lodgement and payment history feeds into the broader ATO portal review. A clean lodgement history with no outstanding amounts is treated favourably. Payment plans are acceptable in many cases, but need to be documented clearly, with evidence that the plan is being honoured.
Tax Returns
Tax returns are the formal record of the business and its owners’ financial position. They are usually the first document a credit team reviews because they are independently verifiable.
Business Tax Returns
Lenders ask for one to two years of tax returns for the company, trust, or partnership, depending on the borrower’s structure. The returns should reconcile to the provided financials, and any meaningful differences should be explained in advance. Lodged returns are preferred over draft returns wherever possible.
Personal Tax Returns
Two years of personal tax returns are requested for all directors, partners, and guarantors. These confirm personal income, capture rental property income, and identify any other commitments not visible in the business documents. For self-employed borrowers, personal tax returns are particularly important because they show how business profits flow through to personal income.
Notice of Assessmeny
Lenders usually also request the Notice of Assessment (NOA) for the last two year’s tax returns. The NOA confirms that the return has been lodged and accepted by the ATO, and that any tax payable has been finalised. It is a small document with disproportionate credibility behind it.
Add-Backs and Adjustments
Lenders accept reasonable add-backs to calculated profitability, such as one-off costs, related-party rent at above-market rates, or above-market owner salaries. These should be documented clearly with supporting evidence. Well-prepared add-back schedules from the accountant make the assessment significantly faster.
Leases and Tenancy Documents
For commercial property loans, the lease is one of the most important documents in the file. It tells the lender how stable the rental income is, who is paying it, and on what terms.
Current Lease Agreements
Lenders require the current signed lease for each tenant and any rent review documents. For multi-tenanted properties, a tenancy schedule consolidating all leases is usually sufficient as a summary, with the underlying leases provided in full. The schedule should list the tenant, lease commencement, expiry, options, rent, outgoings, and any incentives.
Lease Terms that Affect Lending
Several lease terms directly affect lending decisions: the remaining lease term, the tenant’s credit profile, whether the lease is net or gross, annual rent reviews, market review mechanisms, and any renewal options. Long leases to strong tenants on commercial terms support higher LVRs and sharper pricing; short leases to weaker tenants tighten both.
Make-Good and End-of-Lease Clauses
Lease wording around make-good obligations also matters more than borrowers often realise. Make-good provisions set out the conditions under which a tenant must return the premises at lease end, and they can shift high costs between landlord and tenant. Our guide to make-good clauses in commercial leases covers how these clauses affect investor returns and what lenders look for when reviewing them.
Heads of Agreement and Pending Leases
Where a lease is being negotiated rather than signed, heads of agreement or a binding offer to lease may be accepted by some lenders as evidence of tenant interest. The lender will usually require the executed lease before final settlement, since the deal economics depend on it.
Entity and Ownership Documents
When the borrower is not a sole trader, lenders need to understand the ownership structure, the people behind it, and any related-party arrangements. The documents required depend on the entity type.
Company Borrowers
For companies, lenders require an ASIC company extract, the constitution (or memorandum and articles of association for older companies), and a list of directors and shareholders. A clear chart of beneficial ownership is also useful, especially for groups where the operating company sits beneath a holding entity.
Trust Borrowers
For trusts, lenders require the full trust deed (including any amendments), evidence of the trustee’s and main beneficiaries’ identity, and a list of beneficiaries. Both discretionary and unit trusts are accepted by most commercial lenders, although assessments focus on the trustee and the underlying beneficiaries rather than the trust itself.
Partnership Borrowers
For partnerships, lenders request the partnership agreement, evidence of all partners’ identities and standing, and confirmation of profit-sharing arrangements. Each partner usually signs as a co-borrower or provides a personal guarantee.
Self Managed Super Fund Borrowers
For self managed super fund (SMSF) lending, the requirements expand to include the SMSF trust deed, the bare trust deed (for limited recourse borrowing arrangements), the fund’s investment strategy, and evidence that the loan is consistent with the sole purpose test. Specialist advice is usually required to set up the structure correctly.
Security Details
Security is what the lender falls back on if the borrower defaults, so the documentation around it is examined closely. Different security types require different evidence.
Commercial Property Security
For commercial property, lenders require the title certificate, the most recent rates notice, building plans where available, and any current building or pest reports. For mixed-use or industrial properties, environmental information may also be requested. Lenders order their own independent valuation rather than relying on the borrower’s view of value.
Residential Property Used as Additional Security
When residential property is offered as additional security to support a commercial loan, lenders require the same documents (title, rates notice, and recent valuation evidence). Where the residential property is owner-occupied, the borrower’s home, the implications of pledging it as commercial security need to be understood carefully.
Business Asset Security
For business assets registered through the Personal Property Securities Register (PPSR), lenders request an asset register, recent depreciation schedules, and (for major plant and machinery) maintenance and ownership records. Asset finance against specific equipment usually relies on the supplier’s invoice plus a serial number record.
Debtor and Invoice Security
For debtor finance or invoice finance, lenders need a current-aged receivables ledger, a debtor concentration analysis, and (often) a sample of customer contracts. The quality and spread of debtors directly affect the borrowing base.
Deposit and Equity Contribution
Commercial lenders expect a meaningful equity contribution from the borrower. The deposit signals commitment, reduces lender risk, and creates a buffer against valuation surprises. The documentation around it is straightforward but specific.
Evidence of Funds
Lenders require evidence that the deposit funds are available and sourced legitimately. Acceptable forms include bank statements showing the funds held, documentation of sale proceeds, retained earnings supported by financials, or a contract showing the equity from another transaction. Recently received funds usually need additional explanation.
Source of Deposit
Genuine savings, retained earnings, or sale proceeds are treated favourably. Borrowed deposits, related-party loans, and funds received very recently attract more scrutiny because they may indicate that the borrower is stretching the deal. Where the deposit involves a gift from a family member, a statutory declaration is usually required.
Transaction Costs
Beyond the headline deposit, lenders want to see funds available to cover transaction costs: stamp duty, legal fees, valuation fees, lender establishment fee, and any due diligence costs. The total upfront cash position is therefore usually higher than the deposit percentage alone suggests.
Equity in Existing Property
Where the deposit is funded through equity in another property rather than cash, the lender will want a current valuation (or recent comparable evidence), the latest loan statement showing the existing debt, and confirmation that any second-mortgage arrangements are acceptable to the existing lenders.
Purpose of Funds and Transaction Documents
The purpose of the loan shapes the product, term, pricing, and security. Lenders document the purpose carefully because it drives almost every other decision.
Property Purchase
For property purchases, the signed contract of sale is the primary document, supported by section 32 (vendor’s statement) in Victoria or the equivalent in other states, building and inspection reports, and any leases or tenancy schedules that come with the property.
Business Acquisition
For business acquisitions, lenders need the heads of agreement or sale and purchase contract, the target business’s last two to three years of financials, BAS, tax returns, and a description of the buyer’s experience in the industry. Where available, due diligence reports and copies of existing customer or supplier contracts strengthen the file.
Working Capital and Cash Flow Lending
For working capital and cash flow lending, the purpose is documented through a clear use-of-funds statement: how much is needed, what it will cover (inventory, payroll, supplier payments), and how it will be repaid through future cash flow. Lenders also review aged receivables, aged payables, and seasonal patterns in the business.
Equipment and Vehicle Finance
For equipment and vehicle finance, the supplier’s tax invoice or signed quote is the core transaction document. For larger or used assets, a statement of position from the asset’s current owner, registration details, and (sometimes) an independent inspection report are also requested.
Development Finance
For development finance, the requirements expand significantly: a development feasibility study, a fixed-price construction contract, builder credentials and insurance, council approvals, presale contracts (for larger projects), quantity surveyor cost reports, and a clear exit strategy.
A Final Pre-Application Check
Before lodging, most borrowers benefit from a final cross-check of the document pack. A few minutes of review at this stage prevents days of back-and-forth during assessment.
- One to two years of business and personal tax returns lodged and reconciled to financials.
- Year-to-date management accounts within 30 to 60 days of the application date.
- Four quarters of BAS are up to date with no outstanding lodgements.
- ATO portal statement confirming current tax obligations, or a documented payment plan.
- Current personal statement of position for all directors and guarantors.
- Entity documents (ASIC extract, trust deed, partnership agreement) up to date.
- Signed lease agreements and tenancy schedules for any commercial property.
- Title certificate, rates notice, and any building or pest reports for security property.
- Evidence of deposit funds available, plus transaction costs.
- Signed contract of sale, supplier invoice, or other transaction document confirming the purpose of funds.
Where to Start When You Are Preparing the Pack
Most borrowers benefit from spending a few weeks assembling the documentation before approaching a lender. Working with the accountant to bring management accounts up to date, confirming the ATO position is clean, and double-checking that BAS and tax lodgements are current usually pays back many times over in the speed and quality of the application.
The Australian Taxation Office’s overview of business activity statements (BAS) at ato.gov.au is a useful reference for understanding what BAS records lenders will be reviewing and how to confirm your lodgements are current.
Frequently Asked Questions (FAQs)
1. How recent do my financials need to be for a commercial loan application?
Most lenders want year-to-date management accounts within the last 30 to 60 days of the application. Tax returns should be the most recent lodged year, ideally no more than 12 to 18 months old. BAS should be up to date with no overdue lodgements. If financials are older than these windows, expect a request for updates before assessment progresses.
2. Do I need a business plan to apply for a commercial loan?
For established businesses with two or more years of trading history, a formal business plan is not always required, though clear use-of-funds documentation is always helpful. For new ventures, business acquisitions, or major expansions, lenders almost always request a written business plan including financial projections, market analysis, and management background.
3. What if my BAS lodgements are behind?
Bringing BAS up to date is usually the first step before applying. Lenders treat overdue lodgements as a significant warning sign because they suggest either cash flow problems or poor administration. If outstanding BAS is associated with a tax debt, expect the lender to require a documented payment plan and evidence of consistent compliance with it.
4. Can I apply with a payment plan in place for ATO debt?
In many cases, yes, but the application becomes more complex. Lenders want to see the payment plan agreement, evidence that payments are being made on time, and an explanation of how the debt arose. Where tax debt has been ongoing or large relative to turnover, some lenders may decline regardless of the plan. Specialist lender support is usually needed in these situations.
5. What documents do I need for an SMSF commercial property loan?
SMSF lending requires additional documentation on top of the standard commercial pack: the SMSF trust deed, the bare trust deed for the limited recourse borrowing arrangement (LRBA), the fund’s investment strategy, the most recent SMSF annual return and financial statements, and evidence that the loan is consistent with the sole purpose test. Specialist advice is usually involved in preparing this material.
6. Do I need to provide a deposit even if I am offering property as security?
Generally yes. Even where additional property is offered as security to support the loan, lenders usually want to see some cash or equity contribution from the borrower. The exception is in some equipment finance and asset-backed lending products, where 100% financing of the specific asset is possible. For commercial property, expect a 25% to 35% contribution as the norm.
7. How long does it take to put together a complete document pack?
For an established business with current financials and clean tax lodgements, the pack can usually be assembled in one to two weeks. For businesses with overdue tax returns, missing BAS, or complex entity structures, the work can stretch to four to eight weeks. Starting the pack early, rather than after a contract is signed, prevents settlement timelines from being compromised.
The Bottom Line
A successful commercial loan application is built on documentation as much as it is on the deal itself. The borrowers who find the assessment process smooth are the ones who arrive with a complete pack: clean financials, current BAS, lodged tax returns, organised entity documents, well-defined leases, clear security details, evidence of deposit, and a documented purpose of funds.
Most preventable delays in commercial lending stem from gaps in this checklist. Spending time upfront to assemble the documentation, cross-check it for consistency, and address any tax or compliance issues usually saves weeks during the assessment and produces a better outcome in the end.w
