What an accountant's letter for a low-doc loan actually needs to say
On a low-doc or alt-doc application, the accountant’s letter is not supporting evidence. It is the income evidence. Which makes it striking how often it gets rejected for reasons that have nothing to do with the client’s income.
What the letter must contain
- The accountant’s professional body — CPA, CA, IPA or equivalent. Some lenders restrict the accountant-declaration route to particular bodies, and a membership that falls outside the accepted list disqualifies the letter regardless of its content. Check the destination lender’s list before drafting.
- Proper letterhead, with ABN and business address. A bare or unbranded letter gets bounced.
- How long the accountant has acted for the client.
- The declared annual income figure, attributed to a specific entity and a specific financial year.
- A statement that the income is reasonable and sustainable.
The three errors that cause a redraft
1. The wrong financial year
An accountant cannot attest to an income figure for a financial year whose tax return has already been finalised and shows a different number. Always specify the current, not-yet-lodged financial year.
This is a routine correction — one letter had to be revised from an already-finalised year to the current year once it was flagged — and it is entirely avoidable at the drafting stage.
2. The wrong entity
Where a client trades through a group of related entities, an accountant’s letter describing the family group rather than the specific applicant entity will be flagged by credit.
Where a group spans several vehicles, expect the lender to require a separate letter per entity confirming trading or non-trading status. Where a director or guarantor is linked to numerous companies and trusts, expect a conditional-approval requirement for a single consolidated letter that individually names and addresses every related entity — confirming each is either trading profitably, not trading with no outstanding liabilities, or a self-funding vehicle not reliant on contributions.
Get that consolidated letter proactively, before submission. Chased as a post-approval condition it is slow, and it holds up everything behind it.
3. Director but not shareholder
Several lenders will only rely on self-employed or company income where the applicant is both a director and a shareholder of the entity generating it. Directorship alone is not enough. Confirm this before the letter is drafted — it is the single most common trigger for a self-employed income rejection.
Where turnover is below the GST threshold
Where a self-employed applicant’s annual turnover sits below the GST-registration threshold, no BAS statements are lodged and none can be provided. That is not a problem to be worked around; it is a fact to be explained.
A written accountant’s letter comparing two financial years’ revenue, expenses and profit — and explaining any year-on-year variance above roughly 20% — has been confirmed in writing as an acceptable substitute. Supply it proactively rather than waiting for an assessor to query the missing BAS.
The verification call
Accountant verification calls are standard practice, not a red flag. Multiple low-doc lenders independently contact the client’s accountant to confirm the declared figure at a high level.
The three questions asked are consistent:
- How long have you acted for this client?
- Is the declared income reasonable to service the proposed loan?
- Has the business had recent cash-flow problems?
What stalls files is not the call. It is the call being unexpected. Some lenders independently verify the accountant via a search plus a phone call in the same week the letter is received — so tell the accountant a call is coming, roughly when, and give them the exact figures and business description the underwriter will ask about.
Where a live call cannot be arranged, several lenders have accepted written confirmation, six months of BAS with a calculator, or six months of business bank statements as a documentary fallback. Ask for the alternative rather than letting the file sit.
Shelf life
Treat any accountant’s letter already on file as having roughly a six-month shelf life. Refresh it proactively rather than waiting for a credit analyst to flag it as stale — which will happen at the least convenient moment.
Also reconfirm the accepted document vintage before each application. Requirements shift: one low-doc product moved from accepting the prior year’s accountant-prepared financials to requiring the current year as standard, with the older year accepted only on exception and with the current year’s BAS as backup.
Get the figure right before the letter is drafted
The most common cause of a redrafted letter is a number that does not clear serviceability.
Standard practice on low-doc deals is to calculate the income figure the loan actually needs to service first, then take that figure to the accountant for professional sign-off — rather than starting from the client’s stated income and hoping it clears the bar.
Two disciplines go with that:
- Confirm the client and accountant are genuinely comfortable with the number. A declared figure the accountant will not stand behind is worse than no letter.
- Sense-check the whole picture. A referral was returned for exactly this: implausibly low declared living expenses, an unexplained personal loan, and declared income of $101,400 against roughly $200,000 actually needed. A mismatch discovered by the credit team later stalls or kills the deal.
Where a figure is being revised from a previous application to the same lender, walk the accountant through the reason by phone before sending the revised letter — and expect the lender to follow up with them directly to verify the change.
If the accountant will not sign
Treat that as information rather than an obstacle. An accountant who will not attest to a figure is telling you something about the figure.
The genuine alternatives: check whether the client’s existing primary bank can verify income from banking history alone; use the two most recent BAS statements, with income commonly taken at a discounted percentage of sales depending on industry; or supply six months of business bank statements.
General information only. It is not credit assistance, tax advice, financial product advice, or an offer of finance, and it does not take account of your objectives, financial situation or needs. Requirements vary by lender and are indicative observations over 2024–2026.